Corporate Tax Credits

• Manitoba Manufacturing Investment Tax Credit
  
  
• Co-op Education and Apprenticeship Tax Credits
  
  • Co-operative Education Tax Credit
  • Co-op Graduates Hiring Incentive
  • Journeypersons Hiring Incentive
    
    
• Manitoba Film and Video Production Tax Credit
  
  
• Interactive Digital Media Credit
  
  
• Book Publishers Tax Credit
  
  
• Odour Control Tax Credit
  
  
• Manitoba Research and Development Tax Credit
  
  
• Federal Scientific Research and Experimental Development (SR&ED) Tax Incentives Program

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Manitoba Manufacturing Investment Tax Credit

Manitoba has a Manufacturing Investment Tax Credit. This program targets new manufacturing plant and equipment purchased for first-time use in manufacturing or processing in Manitoba. Qualified investments must be made after March 11, 1992 and before July 1, 2009. Corporations earn a 10% non-refundable tax credit which can be applied against Manitoba corporate income tax payable in the year earned, with unused credits available for a ten-year carry-forward and a three-year carry-back (to taxation years ending after March 11, 1992 or after April 22, 2003 for class 43.1 property). This program is administered by Canada Customs and Revenue Agency on behalf of Manitoba.

Effective March 9, 2005, the Manufacturing Investment Tax Credit extends the definition of qualified property to include used building, machinery and equipment.

The Manufacturing Investment Tax Credit extends the definition of qualified property to include new equipment under class 43.1 purchased between April 22, 2003 and December 31, 2011.   Class 43.1 includes (for a firm's own consumption) equipment used to produce energy from renewable sources and equipment that uses energy more efficiently. Class 43.2 Assets will also qualify for the credit.

The 2005 budget announced that a portion of the Manufacturing Investment Tax Credit would be converted to a refundable credit. (See table below to determine timing and the refundable portion rate.) The November 2007 Speech from the Throne increased the refundable portion from 50% to 70% in 2008.

Effective Date	Refundable Portion
March 9, 2005	20%
March 7, 2006	35%
January 1, 2008	70%

For more information on the Temporary Manufacturing Investment Tax Credit, contact Federal-Provincial Relations and Research Division, Manitoba Department of Finance.

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Manitoba Film and Video Production Tax Credit

Effective between January 1, 1997 and March 1, 2011, a refundable tax credit for film and video productions is available, equal to 35% of eligible salaries paid to Manitoba residents and qualifying non-resident employees ("deemed residents") for work performed on an eligible film or video produced in Manitoba. 

Salary associated with a deemed resident who trains two or more Manitoba residents cannot exceed 20% of eligible salaries paid to Manitoba residents; or 10% if only one Manitoba resident is trained.

A 5% frequent filming incentive will now be provided. A corporation that produces three eligible films in two years will earn a 5% additional credit on eligible salaries paid with respect to the third qualifying production. To be eligible for the incentive, principal photography for the third production must commence after April 19, 2004 and principal photography on the previous two eligible films must not have been substantially completed before April 20, 2003.

A 5% rural and northern incentive is introduced on eligible salaries paid for work performed in Manitoba on productions where a permanent establishment of the applicant corporation is located, and 50% of principal photography days take place 40km from Winnipeg. Principal photography on an eligible film must commence after April 19, 2004.

The restriction that a corporation cannot hold or be associated with a corporation that holds a CRTC broadcast license is removed. This change is in effect for applications received after April 19, 2004.

Effective March 9, 2005, the basic rate of the credit is increased to 45%.

For productions commencing principal photography after 2007 the frequent film bonus is increased from 5% to 10% and the percentage of eligible salaries associated with deemed residents is increased from 20% to 30%.

A 5% Manitoba producer bonus is introduced based on eligible salaries where a Manitoba resident receives credit as a producer on an eligible film.

With the frequent filming incentive, the rural and northern incentive and Manitoba producer bonus, a film that meets all program criteria may earn a 65% credit on eligible salaries.

For more information on the Film and Video Production Tax Credit contact:

The Manitoba Film & Sound Recording Development Corporation
#410 - 93 Lombard Avenue
Winnipeg MB R3B 3B1

Telephone:  (204) 947-2040
Fax:  (204) 956-5261

Email: explore@mbfilmsound.mb.ca

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Interactive Digital Media Tax Credit

A new refundable corporation income tax credit for companies that develop and produce interactive digital media projects in Manitoba is introduced. The tax credit will be equal to 40% of the remuneration paid to Manitobans on eligible projects approved by the Department of Science, Technology, Energy and Mines. The maximum tax credit on an eligible project is $500,000. Projects that begin prototyping and product development after April 9, 2008 and before 2011 will qualify for the credit.

A qualifying company must be a taxable Canadian corporation with a permanent establishment in Manitoba. The tax credit will be processed as part of a qualifying company’s annual income tax return and administered by the Canada Revenue Agency. This tax credit replaces the Manitoba New Media Production Grant, which is available for projects developed and produced prior to April 10, 2008. Project eligibility under the tax credit builds upon the criteria under the Grant.

For more information on the Interactive Digital Media Tax Credit contact:

Knowledge Enterprise Branch
Manitoba Science, Technology, Energy and Mines
1030-259 Portage Avenue
Winnipeg, MB R3B 3P4

Telephone: 204-945-0589
Fax: 204-945-3977
Email: newmediainquiries@gov.mb.ca

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Book Publishing Tax Credit

To assist the development of the book publishing industry in Manitoba, the Book Publishing Tax Credit is introduced, equal to 40% of eligible Manitoba labour costs. Eligible labour costs include non-refundable author advances; and remuneration for activities carried out in Manitoba, including: salaries for editing, design and project management; fees to freelancers for editing, design and research; artwork; development of prototype; and set-up and typesetting. 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, must have a permanent establishment or be resident in Manitoba, must pay at least 25% of its wages and salaries to employees who are Manitoba residents, and must have recently published at least two qualifying books.

A qualifying book is a new, non-periodical publication that is Canadian-authored and is categorized as fiction, non-fiction, poetry, biography or children’s. A book eligible for a Book Publishing Tax Credit must be a qualifying book for which contracts were entered into after April 9, 2008, and which is published before 2012.

Eligible labour costs must be incurred and paid in Manitoba by the publisher after April 9, 2008 and before 2012.

To promote environmental sustainability in this industry, an additional bonus equal to 10% 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. Eligible printing costs must be incurred and paid within one year of publication of the eligible book.

For more information on the Book Publishing Tax Credit contact:

Arts Branch
Culture, Heritage and Recreation Programs
Manitoba Culture, Heritage, Tourism and Sport
Telephone: 204-945-3847
Fax: 204-948-1684

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Odour Control Tax Credit

Effective April 20, 2004, the Odour Control Tax Credit was established. It is a 10% nonrefundable corporation income tax credit for businesses that invest in capital to control nuisance odours that arise or may arise from the use or production of organic waste.  Eligible expenditures include capital property acquired for the purpose of preventing, reducing, or eliminating nuisance odours.

The credit applies to expenditures made after April 19, 2004 and before 2010. Credits earned but unused in a given year may be carried back three years to taxation years that end after April 19, 2004 and carried forward for 10 years.

Agricultural corporations are eligible for a new refundable part of the Odour Control Tax Credit. The maximum refund that a corporation can claim is the lesser of the tax credit that exceeds the credit claimed in the current year and the property tax (for the calendar year that ended in the tax year after March 6, 2006), net of government assisstance received or receivable on Manitoba farmland used by a corporation for farming.

The Odour Control Tax Credit is broadened by prescribing anaerobic digesters as eligible capital investments.  Also, approval is made easier for an investment where odour control is a significant, but not necessarily the primary purpose.

For more information on the Odour Control Tax Credit, contact the Federal-Provincial Relations and Research Division, Manitoba Department of Finance at (204) 945-3757. 

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Manitoba Research and Development Tax Credit

This program targets scientific research and experimental development (as defined for federal purposes) carried on in Manitoba. Qualified expenditures must be incurred after March 11, 1992. Corporations earn a 15% non-refundable tax credit which can be applied against Manitoba corporate income tax payable in the year earned, with unused credits available for a ten-year carry-forward and a three-year carry-back (to taxation years ending after March 11, 1992). This program is administered by Canada Customs and Revenue Agency on behalf of Manitoba.

For qualified expenditures incurred after March 8, 2005 the rate of the credit is 20%.

For more information on the Manitoba Research and Development Tax Credit, contact the Federal-Provincial Relations and Research Division, Manitoba Department of Finance at (204) 945-3757.

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Federal Scientific Research and Experimental Development (SR&ED) Tax Incentives Program

The federal Income Tax Act permits a 100% deduction of SR&ED qualified expenditures from income. All qualifying expenditures form a "pool" which is increased by SR&ED expenditures and diminished by government or non-government assistance received in relation to these activities. Current and capital expenditures incurred in Canada, and current expenditures incurred outside Canada, are added to the pool.

Expenditures incurred in Canada may be deducted in the year incurred or carried forward indefinitely. Current expenditures incurred outside Canada can only be deducted in the year incurred. For purposes of calculating the amount of the SR&ED deduction in a given year, the "pool" of qualified expenditures is adjusted yearly and includes all prior years and current year expenses, less all assistance received or receivable for current or previous years in that year, less all research and development related tax credits claimed in previous years.

Provincial research and development ("R&D") credits reduce the SR&ED pool in the year received while federal tax credits reduce the pool in the following year. If the balance of the SR&ED pool is negative, the excess is treated as income for the year.

Unused tax credits are eligible for a carry-forward of up to seven years and a carry-back of up to three years.

When a corporation is not taxable in a given year and wishes to maximize the refundable federal tax credit, it may choose to renounce its right to the provincial tax credit.

For more information about the federal SR&ED tax incentives program, contact the Canada Revenue Agency, 325 Broadway, Winnipeg, at (204)983-3918 or visit The Canada Revenue Agency Web site.

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