Finance
 

Corporate Tax Credits


Manitoba Manufacturing Investment Tax Credit

The Manufacturing Investment Tax Credit, scheduled to expire on December 31, 2020, is made permanent.  This credit supports businesses by provided an eight per cent tax credit (seven per cent refundable and a one per cent non-refundable) that acquire qualified plant, machinery and equipment for first-time use in manufacturing or processing in Manitoba.   

Corporations earn a nine per cent tax credit (for eligible property acquired on or after April 12th, 2017 but before July 1 2019) or an eight per cent tax credit (for eligible property acquired on or after July 1st, 2019) which can be applied against Manitoba corporate income tax payable in the year earned, with unused credits available for a ten-year carry-forward.  This credit is 7/8 refundable and 1/8 non-refundable with respect to qualified property acquired on or after July 1st, 2019. This credit is 8/9 refundable and 1/9 non-refundable with respect to qualified property acquired on or after April 12, 2017 but before July 1, 2019. This program is administered by Canada Revenue Agency on behalf of Manitoba. 

In addition to the above, the Manufacturing Investment Tax Credit includes equipment under class 43.1. 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 also qualify for the credit.

An income tax election allowing taxpayers to renounce, in whole or in part, the Manufacturing Investment Tax Credit is provided. 

For more information on the Manufacturing Investment Tax Credit, contact the Manitoba Tax Assistance Office, Manitoba Department of Finance. 


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Manitoba Film and Video Production Tax Credit

A refundable tax credit for film and video productions is available, based on eligible salaries paid to Manitoba residents and qualifying non-resident employees for work performed on an eligible film or video produced in Manitoba. The basic rate of the credit has been 45%.

Salary associated with non-resident employees cannot exceed 30% of eligible salaries paid to Manitoba residents when two or more Manitoba residents are trained for each non-resident employee; or 10% if only one Manitoba resident is trained.

A corporation that produces three eligible films in two years earns an additional 10% frequent-filming bonus on eligible salaries paid with respect to the third qualifying production.

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

A 5% rural and northern bonus applies 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 took place, at least 35km from Winnipeg.

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

Production companies are able to elect to claim either the film tax credit based on eligible labour costs (described above), or a 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. Such production costs can also include accommodation costs incurred and paid up to $250 per night per unit, as eligible tangible property expenditures.

In addition :

  • Production companies may file Form T2029, Waiver in Respect of the Normal Reassessment Period, to extend their application deadline by 18 months; and
  • Federal limitation periods are adopted for filing a Manitoba film tax credit certificate with the Canada Revenue Agency.

The tax credit is processed as part of a qualifying company's annual income tax return and administered by the Canada Revenue Agency. Tax certificates are provided by Manitoba Film and Music who ensure the production is an eligible film, the applicant is an eligible corporation, and that the applicant's estimate of the tax credit is reasonable.

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

Manitoba Film & Music
#410 - 93 Lombard Avenue
Winnipeg MB R3B 3B1

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

Email: explore@mbfilmmusic.mb.ca

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Book Publishing Tax Credit

Budget 2019 extended the Manitoba Book Publishing Tax Credit to December 31, 2024.

To assist the development of the book publishing industry in Manitoba, the refundable Book Publishing Tax Credit is 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 which is published before 2025. Eligible labour costs must also be incurred and paid in Manitoba by the publisher on or before December 31st, 2024.

To promote environmental sustainability in this industry, an additional bonus equal 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. Eligible printing costs must be incurred and paid in the year of publication of the eligible book or in the immediately following year.

This income tax credit is administered by the Canada Revenue Agency on behalf of Manitoba.

For more information on the Book Publishing Tax Credit contact:

Arts Branch
Sport, Culture and Heritage
Telephone: 204-945-7581

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Cultural Industries Printing Tax Credit

Manitoba printers are eligible for a 35% refundable Cultural Industries Printing Tax Credit on salary or wages to its employees who were resident in Manitoba on December 31 of that tax year for their employment in the printer’s book printing division.  Budget 2020 extended the Cultural Industries Printing Tax Credit to December 31, 2021.

The maximum revenue is capped at $200,000 per book title, at least 90% of the book must be new material that has not already been published, if the book contains pictures and is not a children’s book, at least 65% must be text, and the printer must demonstrate that the book is for sale through an established distributor.

The publisher of the eligible book may be carrying on business anywhere in Canada but must not be related to the Manitoba printer.

A worksheet which will assist a printer in determining the eligibility of a book is available.

For more information, contact the Finance Research Division, Manitoba Department of Finance.

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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. Corporations may earn a tax credit which can be applied against Manitoba corporate income tax payable in the year earned, with unused credits available for a 20-year carry-forward (previously 10 years) and a three-year carry-back. This income tax credit is administered by the Canada Revenue Agency on behalf of Manitoba. The tax credit rate is 20% for eligible expenditures made before April 12, 2017 and 15% for eligible expenditures made after April 11, 2017.

The credit is refundable for eligible expenditures incurred after 2009 by a corporation with a permanent establishment in Manitoba and where the research and experimental development is carried on in Manitoba under an eligible contract with a qualifying research institute.

Manitoba Budget 2010 extended refundability of this tax credit to 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 is refundable; and
  • starting 2012, one half if the credit for in-house R & D is refundable.

The 2013 federal budget removed capital expenditures from the federal investment tax credit base, but Manitoba Budget 2013 protected the Manitoba credit from this federal tax cutting measure. The federal budget also reduced to 80% the claimable portion of contract payments; Manitoba retained full eligibility for contract payments to eligible institutes only. Manitoba reflected the further federal change reducing the prescribed proxy amount to recognize overhead costs attributable to eligible projects, from 65% to 60% of direct labour costs in 2013, and to 55% starting in 2014.

Educational Institutions Potentially Eligible for Participation in SR&ED Refundable Manitoba R&D Tax Credit Program (pdf - 15kb)

An income tax election allowing taxpayers to renounce, in whole or in part, the Research and Development Tax Credit is provided.

Notice, regarding Manitoba Research and Development Tax Credit as per section 7.3 of the Income Tax Act (Manitoba). (pdf - 156kb)

For more information on the Manitoba Research and Development Tax Credit,contact the Finance Research Division, Manitoba Department of Finance.

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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.

SUMMARY OF FEDERAL SR&ED TAX CREDITS
  Rates (%) Refundability
    Current Capital
Individuals & Unincorporated Businesses 15% None None
Canadian Controlled Private Corporations:

  • Taxable Income less than $500,000

    • Expenditures under $3 million

    • Expenditures over $3 million

  • Taxable Income over $500,000
 
 
 
 
 
35%
 
15%
 
 
15%
 
 
 
 
 
100%
 
40%
 
 
None
 
 
 
 
 
None
 
None
 
 
None
 
Large Corporations 15% None None
 

Unused tax credits are eligible for a carry-forward of up to twenty 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 at 1-800-959-8281 or visit The Canada Revenue Agency Web site.

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Paid Work Experience Tax Credits (PWETC) - (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.

For general information on the Paid Work Experience family of tax credits, contact:

Manitoba Tax Assistance Office
110A - 401 York Avenue
Winnipeg, MB R3C 0P8

Phone: 204-948-2115 or 1-800-782-0771 (in Manitoba) 

Fax: 204-948-2263

E-mail: tao@gov.mb.ca
Website: www.gov.mb.ca/finance/tao/index.html

New High-School Vocational Component

For information, contact:

tve@gov.mb.ca
www.edu.gov.mb.ca/k12/cur/teched/tax_credit/index.html

 

Co-operative Education Components

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 is 15% of salaries and wages to a lifetime maximum of $5,000 for the 2016 and subsequent tax years.   For tax years ending in 2015 or earlier, 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.
  • 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 15% of net wages and salaries, earned on completion of each of the first two consecutive years of full-time employment, to a maximum credit of $2,500 per year per graduate. The credit is 5% of wages and salaries paid for tax years ending in 2015 or earlier. There is no limit on the number of co-op graduates for which an employer may be credited.

For more information on the co-operative education components of PWETC, please go to the Co-operative Education page. If you are a co-op education provider, contact:

Post-secondary Institutions Branch

Advanced Education Division

400-800 Portage Avenue Winnipeg MB R3G 0N4

Phone: 204- 945-1833

Fax: 204-945-1841

Email: PSI@gov.mb.ca

Website: www.edu.gov.mb.ca/ald/tax_credit/index.html

 

Apprenticeship Components

PWETC includes three components to promote apprenticeship, administered by the Apprenticeship Branch of Jobs and the Economy. These components provide employers with credits for hiring apprentices or recently certified journeypersons for work performed in Manitoba. The credit is claimed on the income tax return in the company financial year in which it was earned. Eligible trades include both Red Seal and non-Red-Seal trades. Budgets 2012 and 2014 announced significant enhancements of the tax credit rates and maximums for these three components, and their duration has been extended indefinitely. Please see the table below for the existing and newly announced rates and conditions.

Effective with each employer’s financial year ending after December 31, 2014, a common 15% credit on wages and salaries to a maximum of $5,000 per apprentice per year will be available for hiring apprentices through all levels of apprenticeship and for hiring journeypersons for the first two years. The rural and northern bonus for hiring Level 1 and 2 apprentices will continue to provide a total 20% credit on wages and salaries, with a cap of $5,000 per year per apprentice. Starting January 1, 2016 the High School Apprentice Incentive is 25% of wages paid to a maximum of $5,000 per apprentice per year (up from 15% in 2015 and prior tax years). All hiring incentives are net of other government assistance received or payable, including, where applicable, the federal Apprenticeship Job Creation Tax Credit.

 

Improvements to Apprenticeship and Journeyperson Tax Credits
        High School Apprentices
Level 1 & 2
Apprentices:
Winnipeg
 
Level 1 & 2
Apprentices:
Outside Winnipeg
Level 3, 4, & 5
Apprentices
Newly
Certified
Journey-persons
Completed level or certification before 2015 Tax Credit 15%
15%
20%
10%
10%
Maximum $3,000
$3,000
$4,000
$5,000
$5,500
Effective January 1, 2015 Tax Credit 15%
15%
20%
15%
15%
Maximum $3,000
$5,000
$5,000
$5,000
$5,000
Effective January 1, 2016 Tax Credit 25%
15%
20%
15%
15%
Maximum $5,000
$5,000
$5,000
$5,000
$5,000

 

Employers will continue to receive their refundable tax credit when they file their personal or corporate income tax return. A pre-approval process will no longer be required.

The total maximum tax credit is $35,000 for an employer who hires an apprentice through five levels and for two years after certification as a journeyperson.

For more information on the apprenticeship components of PWETC and other aspects of apprenticeship financing, please go to the Financial Supports for Apprentices and Employers page, or contact:

Apprenticeship Manitoba
1010-401 York Avenue
Winnipeg, MB R3C 0P8

Phone: 204-945-3337
Fax: 204-948-2539
Toll-Free: 1-877-978-7233 (1-877-97-TRADE)

Email: apprenticeship@gov.mb.ca
Website: www.gov.mb.ca/wd/apprenticeship/generalinfo/grantstax.html

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Green Energy Equipment Tax Credit - for manufacturers and other businesses

This refundable tax credit promotes the production and purchase of machinery and equipment used to generate renewable energy in Manitoba. Geothermal heating equipment is eligible for a maximum 15% credit and solar thermal heating equipment is eligible for a 10% credit. Biomass fuel energy equipment, installed in Manitoba and used in a business, has become eligible for a 15% credit.

For details, please go to the Green Energy Equipment Tax Credit page.

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Child Care Centre Development Tax Credit

Budget 2018 introduced the refundable Child Care Centre Development Tax Credit to stimulate the creation of licensed child care centres in work places. 

The tax credit will be available for corporations that create new child care centres for a total benefit of $10,000 per new infant or preschool space created, claimable over five years. The credit would be available for licensed spaces created by a taxable corporation that is not primarily engaged in child care services, effective after Budget day and before 2021. The total number of spaces will initially be limited to 200 under this program, but may be increased over time.

For more information of the Child Care Centre Development Tax Credit, contact:

Early Learning and Child Care Program
Manitoba Families
Telephone 204-945-0776 in Winnipeg
Toll-free 1-888-213-4754
E-mail cdcinfo@gov.mb.ca

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