Manitoba Small Business Venture Capital Tax Credit Program (SBVCTC)

The Small Business Venture Capital Tax Credit is available to corporations that meet specific criteria related to their operations and structure.

• The corporation must be a Canadian Controlled Private Corporation (CCPC) with a permanent establishment in Manitoba.
• Assets must be used in active business.
• Revenue must be generated from active business.
• There must be at least $25,000 cash equity already invested.
• The corporation must qualify as a small business with either annual revenue less than $15 million or less than 100 full-time equivalent employees.
• At least 25% of the employees must reside in Manitoba.
• The corporation must not be a Reporting Issuer.

Who is eligible?

Who is not eligible

Yes, certain types of companies are not eligible for this grant.

An applicant whose principal business activity falls into any one of specific activities will not be considered eligible to participate in the SBVC program:

• Professional services that are regulated by a governing body which is established under an Act of the Legislature
• Providing management, administrative, financial or other similar services
• Leasing, developing or selling real property
• Exploring for, developing or processing mineral, oil or gas resources
• Farming, except for commercial crop production in a climate controlled environment, fishing, hunting, or similar activity but NOT processing products from these activities
• Holding, operating or granting franchises
• Operating a restaurant, lounge, bar or similar establishment, except for brewpubs
• Performing arts, amusement or gaming activities
• Providing educational, health care, social or other similar service

Eligible expenses

The SBVC share proceeds must be used within the holding period (three years from the date shares issued) for the purposes approved in the application. The SBVC share proceeds cannot be used for any of the following purposes:

• To invest outside Manitoba
• To lend to others
• To pay for a business re-organization
• To pay a dividend or return capital to a shareholder
• To pay an amount owing to a shareholder, an affiliate, or a person related to a shareholder or affiliate
• To purchase, develop or maintain land or equipment for sports
• To support an ineligible activity
• To support an activity that does not promote economic development or is contrary to public policy

Eligible geographic areas

This program is targeted at companies in Manitoba. All companies must have a permanent establishment in Manitoba to be eligible.

• Companies with a physical location in Manitoba.

There are no explicit evaluation and selection criteria outlined for the Small Business Venture Capital Tax Credit program. However, applicants must meet several eligibility requirements to issue shares under the program.

• A Canadian Controlled Private Corporation (CCPC) with a permanent establishment in Manitoba;
• All or substantially all assets used in active business;
• All or substantially all revenue generated from active business;
• At least $25,000 cash equity already invested;
• An annual revenue of less than $15 million or less than 100 full-time equivalent employees;
• At least 25% of employees reside in Manitoba;
• Not a Reporting Issuer as defined in The Securities Act (Manitoba);
• Previously issued less than $10 million in eligible shares either on its own or combined with an affiliated company.

The program's information includes details about required submissions, eligibility criteria, and penalties for non-compliance.

• Applications for the SBVC tax credit program can be submitted online or via email.
• An application must include recent annual financial statements, income tax return, notice of assessment, terms and conditions for shares, and a description of proposed use of proceeds.
• The program requires a minimum investment of $10,000 per investor while the maximum investment eligible for the tax credit is $500,000 per company.
• The tax credit is non-refundable and can be carried forward for up to ten years or back for three years.
• Shares must be held for a minimum of three years, during which prohibited uses include investing outside Manitoba or paying dividends to shareholders.
• Certain business activities such as professional services, leasing, and farming are ineligible for the program.
• Approved applicants must file an annual information return including financial statements and a questionnaire for program effectiveness evaluation.