Ontario Made Manufacturing Investment Tax Credit
Corporations may be eligible to receive Corporate Income Tax support for investments in buildings, machinery and equipment used for manufacturing or processing.
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The government has introduced the new Ontario Made Manufacturing Investment Tax Credit to help Ontario manufacturers:
- lower their costs
- become more competitive
The Ontario Made Manufacturing Investment Tax Credit is a 10% refundable Corporate Income Tax credit for eligible corporations on qualifying investments in buildings, machinery and equipment for use in manufacturing or processing in the province. An eligible corporation could receive a tax credit of up to $2 million a year.
Who is eligible
An eligible corporation must meet the following requirements:
- it is a Canadian-controlled private corporation throughout the taxation year
- it is not exempt from Ontario corporate income tax for the taxation year
- it carries on business in Ontario in the taxation year through a physical permanent establishment in Ontario (such as an office, a factory or a workplace)
Which investments qualify
An eligible corporation can claim capital investments in the following capital cost allowance classes.
Class 1: For buildings acquired, constructed or, renovated and used for manufacturing or processing in Ontario that become available for use on or after March 23, 2023 and that are eligible for the additional 6% capital cost allowance permitted under the federal Income Tax Act for manufacturing or processing buildings.
Class 53: For machinery and equipment to be used in the manufacturing or processing of goods in Ontario that are acquired and become available for use on or after March 23, 2023. For property acquired after 2025, qualifying investments will be property described in paragraph (a) of Class 43.
How the tax credit is calculated
An eligible corporation can claim qualifying expenditures up to a limit of $20 million in a taxation year and would be prorated for short taxation years. An associated group of corporations is also subject to the $20 million limit.
The tax credit for a taxation year is 10% of eligible expenditures for qualifying investments, up to a maximum of $2 million (i.e. 10% of the $20 million limit).
How to claim the tax credit
The Canada Revenue Agency administers tax credits on behalf of Ontario and corporations can claim the tax credit on their T2 Corporation Income Tax return.
See the Taxation Act, 2007 (Ontario) for further details on the eligibility requirements and conditions that must be met to claim the credit.
For general tax enquiries regarding this tax credit, taxpayers may telephone the CRA at:
Or visit the CRA website