What Makes Manitoba an Appealing Destination for Filmmakers?
Manitoba has a strong film tax credit program. With base tax credit percentages of 45% and 30% for its cost-of-salaries (“MBCOS”) and cost-of-production (“MBCOP”) programs, respectively, the province has become one of the most appealing and cost-effective locations to film in Canada.
How Can Manitoba’s Film Tax Credits Be Increased Further?
What may not be known is that both of Manitoba’s primary tax credit options can be increased further when a production utilizes tax credit bonuses.
The MBCOS tax credit can be increased from its base 45% to a total of 65% when all three of its available bonuses are applied and the MBCOP tax credit can increase from 30% to 38% when its singular available bonus is applied.
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What is the MBCOS Frequent Filming Bonus and How to Qualify?
A production will be eligible for the frequent filming bonus of 10% where the subject production is the third film that the applicant production company has shot in Manitoba within a two-year period.
This can become a rolling bonus as long as the ratio of three film projects in two years is maintained. For series, projects will earn one frequent filming credit for every two hours of airtime. Therefore, after the first four hours, the series will have the required credits to qualify for the frequent filming bonus and the bonus can be applied to the remainder of the series.
In order for the production to be eligible, ownership of the production must be identified to confirm that each of the three films in the two-year period are owned by the same entity (referred to as the Principal Owner). This bonus is applied for via the Frequent Filming Bonus Eligibility Form that can be found here.
How Can Manitoba Producers Benefit from the MBCOS Producer Bonus?
A production can receive a 5% bonus where the applicant production company has a Manitoba resident fill the role of Producer, Co-Producer or Executive Producer.
To qualify, the Manitoba resident must receive a screen credit for any of these three roles in the production. This bonus is applied for within the MBCOS application form in both the Part A – Registration Certificate and the Part B – Completion Certificate.
What is the MBCOS Rural and Northern Bonus and How to Qualify?
A production can increase its refundable credit amount by another 5% via the rural and northern bonus. A production is eligible for this bonus where at least 50% of its Manitoba shooting days occur at least 35 km / 22 miles from Winnipeg’s center (a “rural day”), which is measured by the most direct driving distance from the intersection of Portage Avenue and Main Street in the city.
A rural day is defined as 7.5 hours of principal photography occurring in the rural location. To calculate the number of rural days, take the total number of hours spent on principal photography in the rural area and divide that number by 7.5.
In addition to the shooting requirement, at any time during principal photography, the applicant production company must have a permanent establishment in Manitoba that is located at least 35 km / 22 miles from Winnipeg’s center. Like the Producer Bonus, this bonus is applied for within the MBCOS application form in both the Part A – Registration Certificate and the Part B – Completion Certificate.
Can Federal Programs be Combined with MBCOS?
One additional production tax credit bonus that isn’t technically a “Manitoba tax credit bonus” is the availability to utilize the federal Canadian Film or Video Production Services Tax Credit (PSTC) on top of the MBCOS tax credit.
The MCBOS tax credit will reduce the production costs on which the PSTC is applied. Where a production is also eligible for the PSTC, the 65% tax credit (where all three former bonuses are applied) is increased to a total 70.6% refundable credit on eligible Manitoba labour!
What is the MBCOP Production Company Bonus and How Does it Benefit Productions?
The only bonus available for the MBCOP tax credit is one that most productions will utilize. This is an 8% tax credit bonus for eligible productions that co-produce with an eligible Manitoba production company increasing the base credit for 30% to 38%.
This production tax credit bonus is applicable to eligible productions where principal photography commences after May 31, 2020.
How Can You Successfully Navigate Manitoba Film Tax Credits for Your Production?
Like all film tax credit programs, Manitoba’s available tax credits and added bonuses provide substantial benefits to productions that film in the province.
However, the programs and their various regulations and processes often can be difficult to navigate to determine which tax credit routes are the most beneficial to your production. Being aware of the available bonuses and how they operate, as discussed in this blog, and determining which tax credits and bonuses are the most beneficial to your production, is just one piece of the picture to help you plan for your production’s success.
For further information about Manitoba’s tax credit programs, we encourage you to visit our first blog entitled Tax Credit Overview – Filming in Manitoba Series: Part 1.
© 2023 Edwards Creative Law, LLP – Updated to June 21, 2023
Edwards Creative Law is Canada’s Entertainment Law Boutique™, providing legal services to Canadians, and international clients who partner with Canadians, in the Film & Television, Music, Video Games and Apps, Publishing and Literary industries.
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* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.
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