Ontario-made manufacturing tax credit offers up to $2 million in tax relief

MONDAY, SEPTEMBER 18, 2023 

The Ontario-made manufacturing investment tax credit, established in March 2023, enables the province’s manufacturers to receive up to $2 million annually to “grow, innovate, become more competitive and create jobs.”

Canadian controlled private manufacturers and processors with a permanent establishment in Ontario can apply for the 10 percent refundable corporate income tax credit for capital investments in buildings, machinery, and equipment.

The following investments are eligible for the credit:

 -     Expenditures for buildings used for manufacturing or processing in Ontario that become available for use on or after March 23, 2023. To qualify, 90 percent of the floor space of the building must be used for manufacturing or processing in Ontario at the end of the corporation’s tax year and the building must be eligible for the additional six percent CCA permitted under the federal Income Tax Act.

 -  Expenditures for machinery and equipment used in manufacturing or processing of goods in Ontario that is acquired and becomes available for use on or after March 23, 2023, and before 2026.

To qualify for the credit, related buildings, machinery, or equipment must be available for use by the end of 2025, so timing is key to accessing the available credit. The Canada Revenue Agency administers tax credits on behalf of Ontario and corporations can claim the tax credit on their Corporate Income Tax return.

If you have any questions please reach out.