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Government: Recent Strategic Tax Incentives


Tax Incentives: Gov't Home | Recent | Manufacturing | R & D | Film & Video | Education | Mining | Federal

Summary of Strategic Tax Incentives announced in the last Manitoba budgets.

For details about tax incentives, please visit the Manitoba Finance website.

2017

  • Manufacturing Investment Tax Credit: Effective for qualifying property acquired after April 11, 2017, the non-refundable portion of the Credit is reduced from 2% to 1%.  This change does not impact eligibility for unused credits on qualifying property acquired before April 11, 2017. In addition, the 8% refundable Credit is not impacted by this change.  This Credit, scheduled to expire on December 31, 2017, is extended to December 31, 2020
  • Paid Work Experience Tax Credit: Effective starting with the 2017 tax year, Crown corporations and other provincial government entities are no longer eligible for this Credit.  This does not impact the eligibility of all other qualified entities.
  • Co-operative Development Tax Credit: This Credit is eliminated for contributions made after April 11, 2017.  This does not impact unused credits on eligible financial contributions previously made by co-operatives and credit unions towards co-operative development in Manitoba before April 12, 2017, which are available to be carried forward.
  • Odour Control Tax Credit: This Credit is eliminated for expenditures made after April 11, 2017.  This does not impact unused credits on eligible expenditures made by businesses before April 12, 2017 that invested in capital property to control nuisance odours from the use or production of organic waste, which are available to be carried forward.
  • Nutrient Management Tax Credit:  Unincorporated individuals resident in Manitoba and engaged in farming, as well as agricultural operations owned by a partnership, may claim this credit for eligible expenditures on or before April 11th, 2017.  This Credit is eliminated for expenditures made after April 11, 2017.  This does not impact unused credits on eligible expenditures made by agricultural producers that invested in capital property to enhance water quality protection before April 12, 2017, which are available to be carried forward.
  • Small Business Income Limit: Canadian-controlled private corporations that qualify for the small business deduction pay a 0% rate of Manitoba Corporation Income Tax. This Budget increases Manitoba’s small business income limit eligible for the small business deduction from $425,000 to $450,000 on January 1, 2016.
  • Paid Work Experience Tax Credits (formerly Co-op Education and Apprenticeship Tax Credits):  The Paid Work Experience family of tax credits provides qualified employers with a percentage of the wages and salaries paid to certain types of trainee employees and recent graduates working in Manitoba. These wages and salaries are calculated net of other government funding for that remuneration. Eligible employers include taxable corporations and exempt corporate entities (such as not-for-profit agencies, Manitoba Crown entities, municipalities, universities, schools, and hospitals), which must claim the fully refundable credit in the company financial year in which it is earned. In addition, unincorporated employers can claim the refundable credit on their individual income tax return in the tax year in which it is earned. All components of this tax credit are fully refundable for all types of eligible employers. For the 2017 and subsequent tax years, Crown corporations and other provincial government entities are not eligible for this Credit.  The Co-op Student Hiring Incentive and high school apprentice component has been significantly enhanced and expanded to help promote more paid work and on-the-job training opportunities for students. Eligibility now includes employers who hire a student in a wide range of registered high school vocational programs that are not connected with the apprenticeship system. These include programs in areas such as health care, child care, business and hospitality. The new stream of support for high-school co-op students provides a refundable tax credit worth 25% of eligible wages and salaries, up to a lifetime maximum of $5,000 per student.

    The benefit for high-school apprentices has been enhanced to 25% from 15% of wages and salaries, to a cap of $5,000 per apprentice per year.

    The benefit rate for post-secondary co-op students has been enhanced from 10% to 15%of wages and salaries, up to a maximum of $5,000 per student. The benefit rate for co-op graduates has been enhanced from 5% to 15% of wages and salaries, up to a maximum of $2,500 per graduate for the first two years of employment.

    Components of the Co-op Education and Apprenticeship Tax Credits allows each employer a 25%.  The Paid Work Experience Tax Credit includes two components to promote co-operative education, administered by Education and Advanced Learning, by means of credits to employers hiring students or recent graduates of a recognized post-secondary program of co-operative education anywhere in Canada or the world.
  • Co-op Students Hiring Incentive: for placement of co-op education students into employment in Manitoba, lasting ten weeks or more, and linked to their studies. The credit equals 10% of net wages and salaries, up to a maximum credit of $1,000 per placement, with a lifetime maximum of five placements per student, but with no limit on the number of placements for which an employer may be credited. The credit is earned when the student completes a placement.
  • Co-op Graduates Hiring Incentive: for hiring recent co-op education graduates into permanent employment in Manitoba, linked to their area of study. The credit equals 5% of net wages and salaries, earned on completion of each of the first two consecutive years of full-time employment, to a maximum credit per year of $2,500 per graduate. There is no limit on the number of co-op graduates for which an employer may be credited
  • Corporation Capital Tax on Banks, Trust Corporations and Loan Corporations: The Corporation Capital Tax on banks, trust corporations and loan corporations is changed from 5% to 6%, commencing for taxation years ending after April 30, 2015.
  • Small Business Venture Capital Tax Credit: The Small Business Venture Capital Tax Credit is being enhanced to stimulate economic growth and promote job creation by increasing the tax credit from 30% to 45% and increasing the lifetime limit in tax creditable shares an approved corporation can issue from $5 million to $10 million.  The maximum annual tax credit claimable by an investor is increased by 50%, from $45,000 to $67,500; and an existing shareholder who has less than 35% equity in a company, increased from less than 10%, is eligible to purchase tax creditable shares.
  • Research & Development Tax Credit: The credit will become refundable after 2009 for qualifying Manitoba corporations that conduct eligible R&D with research institutes in Manitoba on new technologies in biotechnology, medical science, the environment, agriculture, information, communications and computers, as prescribed. Eligible R&D expenses must be incurred in Manitoba under an eligible contract with a qualifying research institute, which will include post-secondary institutions and research institutes in Manitoba, as prescribed. Effective for eligible expenditures made after April 11, 2017, the R & D Tax Credit is reduced from 20% to 15%.
    This change does not impact eligibility for unused credits on qualifying scientific research and development expenditures made by corporations before April 12, 2017.

2015

  • Small Business Income Limit: Canadian-controlled private corporations that qualify for the small business deduction pay a 0% rate of Manitoba Corporation Income Tax. This Budget increases Manitoba’s small business income limit eligible for the small business deduction from $425,000 to $450,000 on January 1, 2016.
  • Co-op Education and Apprenticeship Tax Credits:  Components of the Co-op Education and Apprenticeship Tax Credits allows each employer a 25% credit on wages and salaries to a maximum of $5,000 per apprentice per year per level will be applied to the hiring for work in Manitoba of all levels of apprentices and the hiring of journeypersons for their first two years. The rural and northern bonus for Level 1 and Level 2 apprentices will continue to provide a 25% credit on wages and salaries, with an increased cap of $5,000 per apprenticeship per level. All hiring incentives are net of other government assistance received or receivable.
  • Corporation Capital Tax on Banks, Trust Corporations and Loan Corporations: The Corporation Capital Tax on banks, trust corporations and loan corporations is changed from 5% to 6%, commencing for taxation years ending after April 30, 2015.
  • Small Business Venture Capital Tax Credit: The Small Business Venture Capital Tax Credit is being enhanced to stimulate economic growth and promote job creation by increasing the tax credit from 30% to 45% and increasing the lifetime limit in tax creditable shares an approved corporation can issue from $5 million to $10 million.  The maximum annual tax credit claimable by an investor is increased by 50%, from $45,000 to $67,500; and an existing shareholder who has less than 35% equity in a company, increased from less than 10%, is eligible to purchase tax creditable shares.
  • Odour Control Tax Credit: The Odour Control Tax Credit, scheduled to expire on December 31, 2014, will be extended to December 31, 2017.
  • Research & Development Tax Credit: The credit will become refundable after 2009 for qualifying Manitoba corporations that conduct eligible R&D with research institutes in Manitoba on new technologies in biotechnology, medical science, the environment, agriculture, information, communications and computers, as prescribed. Eligible R&D expenses must be incurred in Manitoba under an eligible contract with a qualifying research institute, which will include post-secondary institutions and research institutes in Manitoba, as prescribed.
  • Data Processing Investment Tax Credit: The Data Processing Centre Investment Tax Credit will be broadened to include new data processing centres built in Manitoba and leased to another Manitoba company that is not affiliated with the lessor. In addition, taxpayers eligible for the credit will be broadened to include data processing centres built using a business structure other than a corporation.  Budget 2012 introduced the Data Processing Centre Investment Tax Credit to position Manitoba as a high technology data processing location of choice. The refundable income tax credit is equal to 4.5% of the capital cost of new qualified property that is a building, and 8.0% of the cost of qualified machinery or equipment.  The Data Processing Tax Credits, scheduled to expire December 31, 2015, will be extended for three years to the end of 2018.

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