Business Costs

Locating in Manitoba gives your business a low-cost advantage.

Business climate | Strategic Incentives | Business Facts - Costs

Affordable industrial land and office rents, the least expensive electricity in North America, and productive, skilled workers give Manitoba businesses an edge.

Manitoba has some of the most affordable industrial properties in Canada. Industrial properties are available in Winnipeg and many other cities and towns throughout the province. Winnipeg’s industrial parks are conveniently located near major transport facilities and properties in other Manitoba cities and towns have convenient highway access. Land costs in Manitoba’s industrial parks can range from $5,000 per acre to over $100,000 per acre, depending on location and available improvements. Prices may be negotiable. Rental costs for industrial real estate in Winnipeg averages $5.20/square foot.

Office space is similarly varied and affordable. An estimated one million square feet of space is available in Winnipeg – from modern class A towers to beautiful historic buildings. Average net rental rates for class A office in central Winnipeg, at $15.25/square foot, is lower than in Ottawa, Toronto, Calgary, Montreal, Edmonton, Halifax or Vancouver.

The mighty rivers that flow north and east into Hudson Bay provide Manitoba with ample, clean, and inexpensive hydroelectricity. In fact, Manitoba Hydro, the provincial electric utility, has the lowest published electric rates in North America. Manitoba Hydro also provides high system reliability: its power outage frequency and average outage time continue to be substantially lower than the respective composite average of other utilities. Manitoba Hydro’s customer service was rated the highest in 2007 among all Canadian electric utilities (J.D. Power and Associates).

These features make Manitoba one of the most attractive locations for investment in Canada. According to a 2006 study by KPMG, Canada is the least expensive location among all G7 nations for business in aerospace manufacturing, chemicals, electronics, medical devices, pharmaceutical manufacturing, precision manufacturing, telecommunications equipment manufacturing, biotechnology R&D, clinical trials, software design, web and multimedia and corporate services.

Gathering data in 128 cities around the world, KPMG found that Canada is the overall cost leader for the G7 nations for 2006, and that Canadian costs are 5.5% below the U.S. average. Because of Canada’s national health care program, employee benefits (as a percentage of wages paid) in Canada are lower than in the U.S., where many employers pay expensive health and hospitalization premiums.

KPMG found that Canadian costs are 5.5% below the U.S. average. (KPMG 2006)

Business climate– sunny and warm

Manitoba’s business climate encourages innovation and hard work and gives companies a competitive cost advantage.

KPMG’s 2006 study showed Winnipeg to be the third lowest cost city in the North American Midwest, with an overall cost advantage of 5.9% relative to the US average. Winnipeg had an overall cost advantage of 9.7% relative to Minneapolis, 6.7% relative to Chicago and 7.1% relative to Dallas-Fort Worth. According to the study, Winnipeg’s most cost-effective industries were in the R&D sector (Biotechnology, Clinical trials, Electronic Product Testing). Additionally, Winnipeg received the best ranking for overall cost competitiveness in the North American Midwest for both Aerospace Manufacturing and Precision Manufacturing.

Manitoba’s favourable business climate isn’t just a matter of low costs. It’s also a result of open doors and high expectations.

• The Manitoba government works to open doors for investors through a variety of tax credits, streamlined permitting processes for mining investors, new initiatives to streamline interactions between government and citizens through the adoption of online service delivery, and government-industry initiatives that market the province within targeted industry sectors.

• Strong consumer confidence is driving growth in everything from new housing starts to retail expansion. That confidence stems from job growth in Manitoba’s capital city, and also from the booming smaller cities of Brandon, Winkler, Morden and Steinbach.

"Part of the reason we've been able to grow at such rates in the time we have is because of the favourable environment, labour market and business climate in Manitoba,"

Ken Howling, VP Finance, Biovail Corporation

Strategic Incentives

• General corporate income tax rate reduced to 13% as of July 1, 2008

• Small business income tax rate reduced by 63% since 1999, dropping to 2% in 2008; Small business income threshold doubled to $400,000

• Manufacturing Investment Tax Credit broadened to include new & used buildings, machinery & equipment; and is now 50% refundable

• Improved capital cost allowance rates for manufacturers

• Research and development tax credit increased to 20%

• Corporation capital tax rates reduced, with deduction increased to $10 million; commitment to eliminate the tax for most corporations before 2011.

• Green Energy Manufacturing Tax Credit promotes the production and purchase of new equipment for generating renewable energy.

• Co-operative Education Tax Credit and Co-op Graduates Hiring Incentive.

• Manitoba Film and Video Production Tax Credit

• Manitoba Tuition Fee Income Tax Rebate: up to 60% of eligible tuition fees paid since 2004, regardless of location of institution

See also Business Facts: Manitoba Economy