News | Natalie Pierre - Burlington Ontario PC

Ontario Introducing New Investment Tax Credit for Manufacturers

Written by Daniel Arcari | 22-Mar-2023 7:43:52 PM

TORONTO — To attract additional investment in the province’s economy, the Ontario government is announcing plans for a new Ontario Made Manufacturing Investment Tax Credit to help local manufacturers grow, innovate, become more competitive and create jobs.

As part of the upcoming 2023 Budget, the government will propose legislation that would, if passed, create a new 10 per cent refundable corporate income tax credit of up to $2 million a year for Canadian-controlled private corporations on qualifying investments in buildings, machinery and equipment for use in manufacturing or processing in the province.

“This new tax credit will give Ontario-based manufacturers another reason to invest in home grown, Ontario-made innovation and expand operations,” said Premier Doug Ford. “As we navigate global economic uncertainty, our government is working around the clock to ensure that we are creating the right conditions for Ontario’s world-class manufacturing sector to grow and create more jobs.”

The proposed Ontario Made Manufacturing Investment Tax Credit would, if passed, provide an estimated $780 million over the next three years in Ontario income tax support to qualifying businesses. Savings from the new tax credit is just one of the many initiatives the government has taken since 2018 to improve Ontario’s competitiveness by lowering costs for business.

“Our government is continuing to bring back the province’s manufacturing sector by attracting key investments and creating and protecting jobs in communities across the province,” said Peter Bethlenfalvy, Minister of Finance. “The new Ontario Made Manufacturing Investment Tax Credit is just one part of our plan to build a strong economy for the future, today.”

In 2022, Ontario secured more than 150 investment deals from a wide range of sectors including automotive, technology, manufacturing and life sciences. These investments will contribute to the creation and retention of thousands of good-paying jobs. Ontario’s Plan to Build will continue to improve the province’s competitive edge, while encouraging existing businesses to expand their operations, so the products of the future are made right here at home.

The government will provide more information on its plan to build a strong Ontario and navigate these uncertain economic times in the 2023 Budget, to be released tomorrow, March 23.

Quick Facts

  • Ontario’s manufacturing sector is a key contributor to the economic success of the province. However, by 2018 employment in Ontario’s manufacturing sector declined by over 300,000 workers from 2004. Over this period, the competitiveness of the sector was negatively impacted by the high cost of doing business, gaps in skills training programs, and a lack of business investment.
  • The proposed new Ontario Made Manufacturing Investment Tax Credit would be available to Canadian-controlled private corporations that make qualifying investments and that have a permanent establishment in Ontario (meaning a fixed place of business including an office, a factory or a workshop).
  • If passed, the tax credit would be available for qualifying investments up to a limit of $20 million in a taxation year and the limit would be prorated for a short taxation year.
  • Qualifying investments would be expenditures for certain capital property included in Class 1 or Class 53 for capital cost allowance purposes.
  • The actions Ontario has taken to save costs for businesses would enable an estimated $8 billion in cost savings and support for some Ontario employers in 2023, with $3.6 billion to go to small businesses.