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Workforce: Tax Incentives that Consider Labour Costs

Education: Attainment Faculty Division Customized Incentives Training

Co-op Education and Apprenticeship Tax Credits

• Co-operative Education Tax Credit --  Employers who provide work placements for students enrolled in post-secondary co-operative education programs may claim a 10% credit against Manitoba corporate income tax of up to $1,000 for each student work placement.

• Co-operative Graduates Hiring Incentive – Employers who hire and retain in full-time employment, students who graduate from a recognized post-secondary co-operative education program, may claim 5% of wages and salaries paid to the graduate in each of the first two full years of employment, to a maximum of $2,500 for each year, where the employment commences within 18 months of graduation.

• Journeypersons Hiring Incentive – Employers may earn a refundable income tax credit equal to 5 per cent, up to $2,500, of wages and salaries paid to a journeyperson (net of other government assistance) for each of the first two twelve-month periods of permanent, full-time employment for work in their certified trade in Manitoba. There is no limit on the number of journeypersons an employer may hire to earn the credit.

• Advanced-Level Apprentices Hiring Incentive – Employers may earn a refundable income tax credit equal to 5% of wages paid to an advanced-level apprentice for work performed in Manitoba, (net of other government assistance). The maximum credit for one apprentice completing one level is $2,500. There is no limit on the number of apprentices in respect of whom the employer can apply.

• Early-Level Apprentices Hiring Incentive – A new component, the Early-Level Apprentices Hiring Incentive (ELA-HI), is added to the existing family of programs, effective in 2011. This new component is designed to encourage those employers who are not eligible for the federal Apprenticeship Job Creation Tax Credit (AJCTC) to hire:

  • high school students who are taking apprenticeship training as part of their schooling and
  • post-secondary Level 1 and 2 apprentices

The benefits available under ELA-HI mirror those of AJCTC: 10% of net wages to a maximum credit of $2,000 per year per employee. However, ELA-HI is fully refundable.

Manitoba Research and Development Tax Credit – A non-refundable tax credit of up to 20% of qualified R&D expenditures (including R&D labour costs) against Manitoba corporate income tax payable. The Manitoba R&D Tax Credit is administered by the Canada Revenue Agency, and firms eligible for the provincial credit will also be eligible for the federal Scientific Research and Experimental Development Tax Credit, which may be refundable in certain circumstances. For eligible expenses incurred after 2009, related to R&D undertaken under contract with a qualifying Manitoba research institute, the provincial credit is refundable. The 2010 Budget extended the refundability of this tax credit to include credits earned on in-house R&D expenditures (i.e., R&D not undertaken under contract with an institute in Manitoba) as follows:

• starting 2011, one quarter of the credit for in-house R&D will be refundable; and
• starting 2012, one half if the credit for in-house R&D will be refundable.

Manitoba Film and Video Production Tax Credit -- A refundable corporate income tax credit of 45% of wages paid to Manitoba residents and deemed residents. Deemed residents must supervise the training of at least one Manitoba resident. In combination with incentives to encourage frequent filming in Manitoba and filming in rural and Northern locations, as well as a 5% Manitoba producer bonus, a film project may be eligible for up to a 65% credit on eligible salaries.

Starting with productions that commence principal photography after March 2010, production companies are able to elect to claim either the film tax credit based on up to 65% of eligible labour costs (described above), or a new 30% tax credit based on production costs incurred and paid, for labour, goods, and services provided in Manitoba that are directly attributable to the production of an eligible film.

Interactive Digital Media Tax Credit -- a refundable corporate income tax credit for companies that develop and produce interactive digital media projects in Manitoba. The tax credit is equal to 40% of remuneration paid to Manitobans on eligible projects to a maximum of $500,000. Projects that begin prototyping and product development after April 9, 2008 and before 2014 will qualify for the credit. A qualifying company must be a taxable Canadian corporation with a permanent establishment in Manitoba.

Book Publishing Tax Credit -- equal to 40% of eligible Manitoba labour costs: non-refundable author advances and remuneration for eligible activities carried out in Manitoba. The maximum tax credit claimable by a publisher is $100,000 per year. An eligible publisher must be engaged primarily in the business of publishing books, with a permanent establishment in Manitoba, must pay at least 25% of its wages and salaries to Manitoba residents, and must have recently published at least two qualifying books. An additional bonus up to 15% of the Manitoba printing costs can be earned by the publisher if an eligible book is printed on paper with a minimum of 30% recycled content.

Cultural Industries Printing Tax Credit -- Commencing April 13, 2011, Manitoba printers will be eligible for a 15% refundable tax credit on eligible printing costs incurred in the production of eligible books. Qualifying costs are amounts invoiced by the Manitoba printer to the publisher of a book for printing, assembly and binding services, performed in Manitoba on a hardcover or paperback Canadian-authored non-periodical publication categorized as fiction, non-fiction, poetry, drama, biography, or children’s book. A qualifying publisher must not be related to the Manitoba printer and may be carrying on business anywhere in Canada.

For more information on the above tax credit programs, contact Federal-Provincial Relations and Research Division, Manitoba Department of Finance.