Tax Credits and Programs: Manitoba Works Capital Incentive

Authors: Maria Penner, Robley Goff

On May 16, 2020, the Province of Manitoba announced a new tax increment financing program called the Manitoba Works Capital Incentive (the “MWCI”).

The MWCI will offer rebates of incremental education-related taxes on a specifically identified property, calculated by assessing the difference between the amount of property tax revenue generated pre-development to the amount of property tax revenue generated post-development. These rebates are intended to encourage advances in economic growth and development, assist with post COVID-19 economic recovery and adaptation and drive further development and job creation.

Eligibility Requirements

A new or existing business interested in expanding within the Province of Manitoba may apply for MWCI if:

  • the business will make a minimum capital investment of $10 million to a specific property;
  • a minimum of 65% of the project’s costs are private (non-government) sources; and
  • there is demonstrable potential to (i) create or maintain a minimum of 10 jobs in the Province of Manitoba, or (ii) the new business activity will have a substantial and measurable net economic benefit for Province of Manitoba.

Key Factors to Consider Before Applying

In addition to satisfying the above criteria, the Province of Manitoba has advised that interested businesses should consider the following five key factors before applying for the MWCI:

  • Only those projects at or above the $10 million dollar threshold will be considered.
  • At least 65% of the project’s costs must come from non-government funding sources.
  • You must be able to demonstrate how the project will create and maintain at least 10 jobs or how a substantial and measurable net economic benefit will result from new business activity.
  • You must also be able to demonstrate a link to Manitoba’s Economic Growth Action Plan.
  • Manitoba provides guidelines for the economic growth action plan which can be reviewed.
  • Construction on the property (if required) should commence within the next six to 24 months to allow the Treasury Board to make a meaningful estimate during the approval process.

How Long will the MWCI Program be in Place?

If a business meets all of the required criteria, the Province of Manitoba may grant its MWCI application. Tax rebates of the incremental education-related property taxes that are generated as a result of the capital investment on the property may be in place for a period of up to 20 years or until the education property tax itself is eliminated (whichever ends first).

Concluding Remarks

If you are interested in establishing or expanding your business in the Province of Manitoba, you may wish to consider applying for the MWCI. Our firm’s business lawyers have extensive experience with all aspects of corporate commercial real estate deals, including drafting offers to purchase and tailoring commercial deals to meet your specific needs, and we would be pleased to assist you with your commercial property investment.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.