Taxes and benefits Ontario Made Manufacturing Investment Tax Credit

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

• lower their costs;
• innovate; and
• 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.

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Read more about this at the Ministry of Finance.