Entertainment and Media Tax Clip: Manitoba's Film and Video Production Tax Credit extended and enhanced (August 10, 2010)

Manitoba Bill 31, which received royal assent on June 17, 2010, enhances the province's Film and Video Production Tax Credit by:

  • extending the credit by three years to March 1, 2014;
  • allowing production companies to:
    • claim either the maximum 65% tax credit (based on eligible labour costs) or a new 30% tax credit (based on production costs); and
    • extend their tax credit certificate application deadline by 18 months; and
  • providing greater flexibility for Manitoba to respond to external changes.

In addition, federal limitation periods will also apply when filing a Manitoba film tax credit certificate with the Canada Revenue Agency.

The Manitoba Film and Video Production Tax Credit is a refundable tax credit available to taxable Canadian corporations with a permanent establishment in Manitoba whose primary business is the production of films or videos. Manitoba Bill 31, The Budget Implementation and Tax Statutes Amendment Act, 2010:

  • extends the credit by three years, so that eligible Manitoba salaries and/or production costs incurred and paid before March 1, 2014, will qualify for the credit; and
  • allows production companies, for productions with principal photography commencing after March 31, 2010, to claim either:
    • the maximum 65% tax credit based on eligible labour costs; or
    • a new 30% tax credit based on production costs incurred and paid for labour, goods and services provided in Manitoba that are directly attributable to the eligible film.

The maximum 65% tax credit based on eligible labour costs is composed of:

  • Basic tax credit: 45% of eligible Manitoba salaries for an eligible film;
  • Regional tax credit: 5% of eligible Manitoba salaries if 50% or more of the principal photography of an eligible film is shot 35 km or more outside of Winnipeg;
  • Frequent filming bonus: 10% of eligible Manitoba salaries on a third eligible film produced within two years (or a first film if co-produced with a Manitoba company that claimed the bonus); and
  • Producer bonus: 5% of eligible Manitoba salaries if a Manitoba resident is credited as a producer, co-producer or executive producer.

Bill 31 also implements the following changes commencing April 1, 2010:

  • production companies can file federal Form T2029, “Waiver in Respect of the Normal Reassessment Period,” to extend their application deadline by 18 months; and
  • Manitoba will have greater flexibility to respond to external changes.

In addition, the 2010 Manitoba budget announced that federal limitation periods will apply when filing a Manitoba film tax credit certificate with the Canada Revenue Agency.

PwC Comments

These changes will be welcomed by Manitoba film and video producers. They are intended to help the province's film industry remain competitive.

For more film incentives, see PwC's The Big Table of Film and Video Incentives.