The Manitoba government on Friday said it will increase the cost-of-production tax credit to 38%, from 30%, in a bid to lure more post-production, VFX and animation work to the province.

The increase is based on advice given by the working group formed in 2018 to review the provincial tax credit.

“With these changes, we hope to see more post-production spending in Manitoba, increased employment opportunities for Manitoba VFX artists, editors and animators, and attract animation post-production and visual effects companies to open new facilities,” said Sport, Culture and Heritage Minister Cathy Cox in a statement.

The cost-of-production tax credit – a fully refundable corporate income tax credit based on all eligible Manitoba expenditures including labour – is one of two main tax credits used in the province. The other is the cost-of-salaries tax credit, a 45% refundable labour-based credit, which can be stacked with a 10% frequent-filmer bonus, a 5% local-producer bonus and a 5% rural and northern Manitoba bonus, equaling a total 65% cost-of-salaries tax credit.

The news comes on the back of a string of record-setting years for the province in terms of production spending. In fiscal year 2018/19, Manitoba hit an overall production spend of $269.4 million.  That’s compared to $210 million in 2017/18 and $173 million in 2016/17.

With the increase, the current in-year forecast for the tax credit has climbed to $42.5 million, compared to $31.5 million last year. The sharp increase is further proof that the province’s tax credit program is working. It comes a year after the province removed the sunset clause on the tax credit, which had previously been due to expire on Dec. 31, 2019.

“The Manitoba Production Company Bonus of 8% will attract investment to the province and encourage Manitoba entrepreneurs and creators to continue to establish businesses, generate jobs and create great content, here in Manitoba,” said Rob Rowan, chair of On Screen Manitoba’s board of directors, in a statement.

Elsewhere in the 2020 budget, the Manitoba government also proposed a change to the The Highway Traffic Act that will allow certified flag persons to temporarily control traffic, rather than relying on local law enforcement. Currently, traffic control on the roads in Manitoba is solely in the hands of police, RCMP and firefighters.

In the past three years, union member earnings have more than tripled to $32 million for 2019 from $10 million in 2016, according to IATSE 856, the largest media production industry union in the province.

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