2022 Manitoba Budget announced
The provincial government introduced its 2022 Budget on Apr. 12. Finance Minister Cameron Friesen stated the budget was focused on five key areas: health care, affordability, the economy, community investment and the environment. The budget included $19.9 billion in spending, projecting a deficit of $548 million. Among the business-related highlights:
In response to high inflation, the Bank of Canada increased the key interest rate by half a percentage point to a total of one per cent on Apr. 13. The increase affects Canadian business and consumers by influencing the rates of mortgages, bank accounts, and the Global Industry Classification Standard.
- the Small Business Venture Capital Tax Credit (a non-refundable tax credit of up to 45 percent for investments in eligible Manitoba enterprises) will be made permanent and expanded to support venture capital funding,
- the Community Enterprise Development Tax Credit (a refundable tax credit of up to 45 percent for investments in community-based Manitoba enterprises) will be made permanent.
- the launch of a new $50 million Venture Capital Fund, and
- $5 million to attract newcomers to Manitoba.
With inflation reaching its highest level in decades due to COVID-19 variants, supply chain disruptions, Russia’s ongoing invasion of Ukraine, price spikes in energy commodities the bank stated, “These factors are the primary drivers of a substantial upward revision to the Bank’s outlook for inflation in Canada.”
“First, the Canadian economy is strong overall. The economy has fully recovered from the pandemic and is now moving into excess demand,” Bank of Canada governor Tiff Macklem said at the opening of a press conference.
“Second, inflation is too high. It is higher than we expected and it’s going to elevated for longer than we previously thought. And third, we need higher interest rates. Our policy interest rate is our primary tool to keep the economy in balance and bring inflation back to the two per cent target.”
The increase is the first back-to-back rate hike since 2017 and is the single biggest one-time increase since 2000.
Fire & Flower and Delta 9 make agreements with Manitoba Liquor & Lotteries
On Apr. 14, Fire & Flower Holdings Corp. announced its subsidiary, Open Fields Distribution, has reached a deal for a one-year cannabis distribution agreement with Manitoba Liquor & Lotteries (MBLL). Open Fields will offer distribution of recreational cannabis products from licensed producers to retailers in Manitoba, directed by MBLL.
“Open Fields was selected as part of a competitive RFP process to provide cross docking services in the province of Manitoba and we are delighted that MBLL has trusted our business to provide these services. Open Fields and Pineapple Express Delivery have significant experience in servicing retail customers in the provinces of Saskatchewan and Ontario and extending these services into an additional province creates scale and efficiency for the wholesale business segment,” said Trevor Fencott, CEO at Fire & Flower. “We will look to continue to pursue business opportunities and acquisitions that drive additional revenue by adding value to existing business segments.”
The same day, Delta 9 Cannabis Inc. announced a deal with MBLL through its own subsidiary Delta 9 Logistics Inc. Under the deal, Delta 9 “intends to work with authorized cannabis suppliers to provide cross-docking and distribution services, fulfilling delivery of orders to licensed cannabis retailers” in Manitoba.
“We see Delta 9’s entry into the distribution services space to be the logical next step in the Company’s vertical integration strategy,” said John Arbuthnot, Delta 9’s CEO. “Delta 9’s existing relationships with the Canadian cannabis industry’s leading suppliers and centralized warehouse presence in Winnipeg make us the ideal provider of these market services.”
The North West Company Inc. reports Q4 and annual earnings
The North West Company Inc. (North West) announced its Q4 earnings (ending Jan. 31, 2022) and released its 2021 annual report. Among the highlights, annual net earnings increased 9.7 per cent ($13.9 million) from 2020 and gross profit decreased 4.8 per cent to $737.8 million compared to $774.6 million last year. Q4 sales increased 2.4 per cent to $579.0 million.
Company chairman of the board Sandy Riley will retire on June 8, 2022. Riley was first elected to the board in 2003 and has held the role of chairman since 2008. “Mr. Riley is a highly-regarded business leader who has served on many Boards and we have been fortunate to benefit from his knowledge and experience on our Board over the past 19 years. I would like to thank Sandy for his leadership and commitment to North West,” said Dan McConnell, president and CEO at North West.
Brock Bulbuck will replace Riley as chairman. Bulbuck has been on the board since 2018 and was the CEO at Boyd Group Services Inc. from 2010 to 2019. “I’m delighted that Brock Bulbuck has agreed to assume the role of Chairman,” said Riley. “Brock’s leadership will complement an experienced team of Directors that will work closely with the senior management team in the years ahead.”
Purolator launches 2022 True North Small Business Grant Contest
Purolator has launched its True North Small Business Grant Contest that will award grants to four winners to support small businesses and community partners. Four Canadian small businesses can receive $20,000 in cash and $500 in free Purolator shipping credits, and a “pay-it-forward” $5,000 cash prize for their community.
“We’ve seen small business accounts grow dramatically over the last two years, with many taking advantage of new opportunities to expand, like moving to e-commerce service models,” said Stacey Cummings, director, marketing at Purolator. “Last year, we received nominations from coast to coast, in a wide variety of industries including tech, hospitality, online retailers, non-profits and many more. This year, we expect to further our reach, with nominations that continue to reflect all of the communities we serve.”
The contest is open from April 13 to May 31, 2022.
Manitoba earns top marks from CFIB
The province of Manitoba earned a “A” rating in the Canadian Federation of Independent Business (CFIB) annual Red Tape Report Card. The report, released on Apr. 11, gave Manitoba an ‘A’ on regulatory accountability and ‘B+’ on regulatory burden for a total score of 9.4 and ‘A’ grade, the highest among the provinces.
“Manitoba is an established leader in regulatory accountability and has the most comprehensive measure of the regulatory burden in North America,” said Laura Jones, executive vice-president at CFIB. “As small businesses look to economic recovery, it is more important than ever that governments commit to reducing costly red tape, and we applaud the province for once again achieving an A grade.”
Queen’s Counsel Appointment applications now open
The government of Manitoba issued its call for applications for Queen’s counsel (QC), for lawyers to be recognized for their contributions in law. Queen’s counsel is an honorary title bestowed lawyers by the lieutenant-governor in council. QC recognition is based on recommendations made by the justice minister, after consultation with an advisory council. To be eligible, applying lawyers “must have demonstrated outstanding practice, shown integrity and leadership, contributed to excellence in the profession and been in practice for at least 10 years.”
“The Queen’s counsel designation officially recognizes professional excellence by Manitoba lawyers, whose chosen field plays such an integral role in our society,” said Kelvin Goertzen, Manitoba Justice Minister. “We want to hear more about the lawyers across the province who are deserving of the QC designation for their records of outstanding work, so please consider nominating those who exemplify the best qualities of their profession to receive this unique honour.”
Applications for Queen’s counsel appointments are valid for three years. The deadline for applications is Aug. 31, 2022.
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MBI Business Brief – April 8, 2022