The Manitoba government is trying to help businesses grow and is spending $50 million to do it.
It is using the money to establish a venture capital fund that will be partnered with private capital to boost Manitoba-focused investment funds, the province said in a news release.
The intent to create a VCF was announced last year but now the process is in motion with the money to be made available later this year.
“This fund will lead to the creation of new entrepreneur-led businesses … and fuel provincewide economic growth to support the rural, urban and northern Manitoba economies,” Premier Heather Stefanson said at a news conference inside Torque Brewing in Winnipeg.
“Manitoba’s business leaders are the engine of our economy, the creators of jobs and prosperity. They have told us that access to capital is critical for the development and expansion of Manitoba businesses.”
The Manitoba Technology Accelerator will manage the funding earmarked for the venture capital fund on an interim basis.
MTA will create a steering committee with representation from industry and community and the provincial government to establish the initial governance structure, Stefanson said.
“The plan announced today … is ambitious and aims not to bring just one fund to Manitoba, but the approach is to leverage this capital to develop a community of venture capital funds in our province,” said Marshall Ring, MTA’s CEO.
“This approach will enable Manitoba to grow new companies faster, more successfully, and help our entrepreneurs build the future of Manitoba’s economy.”
Additionally, the Small Business Venture Capital Tax Credit, set to expire later this year, is being made permanent, Stefanson said.
It provides non-refundable Manitoba tax credit of up to 45 per cent to individuals and corporations that acquire equity capital in eligible Manitoba enterprises.
It was through that tax credit that the founders of Torque Brewing were able to get their business started, said co-owner Adam Olson.
“Anybody who decided that they wanted to invest in us was able to take advantage of that credit and get 45 per cent back of their investment, which is important for people that are investing in a start-up business because you never know what’s going to happen,” he said.
“They’re putting their blind faith in us that we’re going to be able to make it. And in return, the government is giving them some credit to allow them to do that and provide us with the money. That money was very important.”
Brewing is a very cost-intensive business and having the ability to access more venture capital tax credit and now venture capital will enable Torque to expand into markets outside of Manitoba, Olson said.