March 15, 2023
Budget 2023 Provides $50 Million in New Capital for Manitoba First Fund
– – –Interest in Venture Capital Fund Leads Province to Boost Investment to Support Opportunities for Growth for Manitoba Businesses: Stefanson, Wharton
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As part of Budget 2023, Historic Help for Manitobans, and the Manitoba government’s focused efforts on economic opportunities, an additional $50 million is now available to help Manitoba businesses access capital at all stages of business growth through the Manitoba First Fund (MFF), Premier Heather Stefanson and Economic Development, Investment and Trade Minister Jeff Wharton announced today.
“Our government is listening and we continue to take action to help Manitoba entrepreneurs succeed right here at home,” said Stefanson. “Our initial capital investment of $50 million last fall has already generated more than $100 million of private sector interest and we are using that momentum to inject another $50-million allocation to this fund to continue to support early stage businesses so that they can hire, invest and grow in Manitoba.”
The Manitoba government first announced the Venture Capital Fund in spring 2022 and established a steering committee toward the incorporation of the fund. The fund signals that Manitoba is open for business at all stages, said the premier.
“We have heard loud and clear from the business community that this program works,” said Wharton. “That’s why our government is doubling its investment in the program to make sure it reaches more Manitoba businesses and helps drive our economy forward.”
The Manitoba First Fund is serving as a catalyst to create a much larger venture and growth capital ecosystem for Manitoba businesses, the minister added.
The first fund manager to receive capital under the Manitoba First Fund is Westcap Mgt. Ltd., a private equity fund manager with assets under management of approximately $1 billion, having successfully completed transactions with more than 200 companies in multiple sectors including agriculture, health care, manufacturing, infrastructure and innovation. Westcap will be establishing offices in Manitoba to manage its fund as provided through MFF.
“We are very excited to bring our 25 years of industry expertise, alongside our local Manitoba credit union partners to help build the capital ecosystem,” said Grant Kook, president and chief executive officer, Westcap Mgt. Ltd. “The lead investment by MFF was the catalyst in the formation of the Connect Manitoba Growth Fund that will provide valuable patient growth capital to Manitoba companies.”
“The Manitoba Business Council has advocated to the Manitoba government for decades to establish a source of equity capital for growing businesses in Manitoba. As a province, we need to ensure businesses do not need to leave to source capital needed to fuel their futures. The Manitoba government agreed with our premise and established the Manitoba First Fund to draw other equity providers into the province,” said Mike Pyle, chair, Manitoba First Fund. “The response from the market has exceeded our most optimistic projections. We are just getting started but are pleased to commit $25 million in capital to the Connect Manitoba Growth Fund. This represents 25 per cent of the funds provided from the Manitoba government. Active discussions are underway with several other funds looking at establishing a presence in Manitoba and we look forward to more exciting announcements in the future.”
The creation and capitalization of the MFF is one of many ways the Manitoba government is supporting business. Budget 2023 makes investments to spur economic development opportunities, generate well-paying jobs and strengthen the Manitoba government’s fiscal resilience, all of which will support Manitobans through challenging times, Stefanson noted.
Supports for the business community announced in Budget 2023 include:
- $15-million investment in the Community Economic Development Fund;
- $20-million investment to support economic development and investment attraction;
- $2-million funding increase to support regional and strategic economic development;
- collaboration with the Assembly of Manitoba Chiefs to offer non-traditional lending options through the First Peoples Economic Growth Fund;
- $2.3-million increase to the payroll tax exemption to $2.25 million from $2 million and to the threshold below which businesses pay a reduced effective rate to $4.5 million from $4 million; and
- $10.1-million investment to support the Sector Council Program.
Last fall, the Manitoba government announced a new advisory committee to support small businesses called the Premier’s Economic Advisory Council on Competitiveness. The council is guiding work to modernize the tax system, making it more affordable and competitive with neighbouring jurisdictions. In 2023-24, payroll tax thresholds will increase, ensuring employers with less than $2.25 million will no longer pay payroll tax.
The Manitoba government also announced the launch of the Small Business Minimum Wage Adjustment Program last fall, following feedback from the businesses community. Small businesses with up to 20 employees, including those in private, non-profit and charitable sectors, are eligible to receive a prorated wage subsidy of up to 50 cents per hour for the six-month period from Oct. 1, 2022, to March 31, 2023, for each employee earning the new minimum wage of $13.50 per hour for up to 40 hours per week.
“Manitoba continues to have among the lowest unemployment rates in the country,” said Stefanson. “In these times of high inflation and interest rates and supply chain distributions, our government has taken unprecedented action to steer the province toward an economic rebound that is even outperforming last year’s projections.”
For more information on the MFF and other supports for small businesses, visit https://www.manitoba.ca/business.
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