The Government of Manitoba is hoping an $8-million increase to its venture capital tax credit cap will spur private investment and accelerate growth in the prairie province’s burgeoning startup scene.
Late last month, Manitoba announced it would raise the Small Business Venture Capital Tax Credit program’s annual cap from $22 million to $30 million. The tax credit allows investors in Manitoba-based small businesses to receive tax credits equal to a percentage of their investment. By increasing that annual cap rate, the Province will be able to dole out more credits to more investors each year.
The increase is intended to coincide with an uptick in investment in Manitoba companies.
Announced by innovation and new technology minister Mike Moroz, the increase is intended to coincide with an uptick in investment in Manitoba companies. In 2025, investment in Manitoba jumped to $127 million, compared to just $4 million in 2024, according to the Canadian Venture Capital Private Equity Association’s recent report.
“With increased economic growth and development in Manitoba, this important tax credit change will increase investment to meet market demand,” Moroz said in a statement on Feb. 26.
That $127 million spike in investment looks huge on its face, but in context, it’s important to note that the bulk of that figure stems from just a few large deals with Taiv and Conquest Planning, both out of Winnipeg. It’s also worth noting that 2024 was a particularly thin year for venture capital investment in Manitoba, with investment rates plummeting to $4 million in 2024 from $46 million in 2023.
Beyond changes to the tax credit program’s annual cap, other revisions were announced. Manitoba will now formally recognize simple agreements for future equity (SAFEs) as eligible investment instruments under the tax credit program. SAFEs are a financing instrument that allows startups to raise early-stage capital without immediately issuing company stock shares.
By including SAFEs under its tax credit, Manitoba joins other provinces, such as British Columbia and Saskatchewan, which have formally recognized SAFEs’ eligibility under similar tax credit programs.
Other changes to the tax credit program’s investment rules include lowering the minimum investment threshold from $10,000 to $5,000 and expanding eligibility to include limited partnership organizations.
BetaKit’s Prairies reporting is funded in part by YEGAF, a not-for-profit dedicated to amplifying business stories in Alberta.
Image courtesy Unsplash. Photo by Mahesh Gupta.