Tourism Winnipeg

INCENTIVES The Province of Manitoba and the City of Winnipeg are prepared to consider the following suite of incentives should Amazon select Winnipeg as the location for its HQ2. Recognizing the limited information that both the Province of Manitoba and the City of Winnipeg have regarding Amazon's HQ2 development plans, the following presents a framework of financial incentives that the Province and the City may consider in discussion with Amazon, should Winnipeg be short-listed for the HQ2 site selection. A development timeline of 16 years has been assumed for the full HQ2 buildout. Other general assumptions are cited in the following program descriptions. Incentive values indicated are notional, with actual values subject to confirmation of details of Amazon's plans and the requisite due diligence, and will be subject to individual program terms as indicated in the following program descriptions. • Manitoba Research & Development (R&D) Tax Credit This program targets scientific research and experimental development (as defined for federal purposes) carried on in Manitoba. Corporations may earn a 15 per cent tax credit which can be applied against Manitoba corporate income tax payable in the year earned. The credit is 100 per cent refundable for R&D performed under contract with a prescribed Manitoba institution, including post-secondary institutions, and 50 per cent refundable otherwise. Unused credits can be carried forward 20 years or carried back three-years. This program is administered by Canada Revenue Agency on behalf of Manitoba. Assuming Amazon HQ2 makes annual expenditures for eligible R&D at a rate equivalent to its current corporate average rate, and that the amount of eligible R&D spending at Amazon HQ2 grows in proportion to the overall project's growth, the notional value of tax credits earned could be over $6 M in Year 1 and could reach over $100 M in Year 16, for a notional cumulative value of $918 M over a 16–year buildout. Actual value will be dependent on actual eligible R&D expenditures. • Paid Work Experience Tax Credits The Paid Work Experience family of tax credits provides qualified employers with income tax credits for the wages and salaries paid to certain types of trainee employees and recent graduates working in Manitoba. All components of this program are fully refundable SUMMARY Program Notional Total Value (over 16 years, cumulative, unless otherwise noted) Province of Manitoba: Tax Credits: Manitoba Research & Development Tax Credit $918.0 M Paid Work Experience Tax Credits 10.0 M Green Energy Equipment Tax Credit 16.0 M Manitoba Interactive Digital Media Tax Credit (over 5 years, cum.) 5.3 M Subtotal Manitoba Tax Credits up to $949.3 M Manitoba Training Support (over 6 years, cum.) up to 30.0 M Province of Manitoba up to $979.3 M Government of Canada SR&ED Tax Credits $780.3 M Subtotal Government of Canada $780.3 M TOTAL $1.76 B A M A Z O N P R O P O S A L 49

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