Financial consulting company KPMG has recommended that the Manitoba provincial government either cut or eliminate its Book Publishing and Cultural Industries Printing tax credits.
In a commissioned two-phase report assessing the province’s fiscal performance, KPMG refers to several “boutique tax credits.” The report suggests it is “unclear whether a number of tax credits are achieving desired outcomes for the high total cost and in some cases, significantly increasing annual costs.”
The Book Publishing Tax Credit was established in 2008 to assist the province’s publishers with labour costs such as author advances and editorial salaries, up to $100,000 per year. An additional bonus equal to 15 per cent of Manitoba-based printing costs can be earned by publishers if eligible books are printed on paper with a minimum of 30 per cent recycled content. The Cultural Industries Printing Tax Credit provides Manitoba printing companies with a 35 per cent refund on salaries or wages of employees in their book divisions, up to $200,000 per title.
In an interview with CBC, Gregg Shilliday, co-owner of Great Plains Publications, says that the book publishing tax credit has “made the difference some years between it being a profitable year or not.”
There is no word yet as to how the provincial government will act on specific recommendations. In an Oct. 3 release, finance minister Cameron Friesen said, “The KPMG report on fiscal performance allowed our government to quickly analyze a range of options and opportunities available to achieve better value for money, and has helped advance our transformation of government. Ultimately, we are accountable to the citizens of Manitoba and will only act on recommendations that are in the best interest of Manitobans.”
Other tax credits recommended for review are Film and Video Production, Interactive Digital Media, and Children’s Arts and Cultural Activity.