Overview

The government has introduced the Ontario Made Manufacturing Investment Tax Credit to help Ontario manufacturers:

  • lower their costs
  • innovate
  • become more competitive

The Ontario Made Manufacturing Investment Tax Credit is a 10% refundable Corporate Income Tax credit for qualifying corporations on eligible investments in buildings, machinery and equipment for use in manufacturing or processing in the province. A qualifying corporation could receive a tax credit of up to $2 million a year.

Who qualifies

A qualifying 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 are eligible

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, eligible investments will be property described in paragraph (a) of Class 43.

How the tax credit is calculated

A qualifying corporation can claim eligible expenditures up to a limit of $20 million in a taxation year. The credit is 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 eligible investments, up to a maximum of $2 million (i.e. 10% of the $20 million limit).

Repayment of the tax credit

To help target this tax credit and ensure that it continues to support eligible investments in Ontario, a corporation may be required to make a repayment of the Ontario Made Manufacturing Investment Tax Credit. The repayment would be required if the credit is claimed and within the next five years, the particular property:

  • is disposed of, or
  • its use is changed to a non-manufacturing or non-processing use, or
  • is removed from Ontario.

 The repayment amount would be the lesser of:

  • amount of the credit that was claimed; and
  • a proportionate amount, calculated by dividing either the fair market value of the property or, if the property is disposed of to a person dealing at arm’s length with the corporation, the proceeds of disposition, by the original capital cost of the property.

This applies to dispositions, conversions, or removals of the relevant eligible property on or after May 15, 2025, for Ontario Made Manufacturing Investment Tax Credit claims for taxation years ending on or after May 15, 2025.

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.

Contact us

For general tax enquiries regarding this tax credit, taxpayers may telephone the CRA at:

Or visit the CRA website

For enquiries regarding the proposed changes announced in the 2025 Ontario Budget, including the temporary enhancement and expansion of the Ontario Made Manufacturing Investment Tax Credit, please contact the Ontario Ministry of Finance at: