Ontario Made Manufacturing Investment Tax Credit

Definition

The Ontario Made Manufacturing Investment Tax Credit (OMMITC) is a refundable corporate tax credit that supports capital investment in manufacturing and processing activities carried on in Ontario. Introduced in the 2023 Ontario Budget and enacted in the Taxation Act, 2007 (Ontario), the credit equals 15% of qualifying investments that become available for use on or after May 15, 2025 and before 2030 (10% before May 15, 2025), with an annual expenditure limit of $20 million per CCPC (or associated group), producing a maximum refund of $3 million per year. It is claimed on Schedule 572 of the T2 return. Capital cost allowance and income-tax rates are separate calculations; credit eligibility does not establish entitlement to another incentive.

Key rules

• The credit rate is 15% of qualifying expenditures for property that becomes available for use on or after May 15, 2025 and before January 1, 2030. It was 10% from March 23, 2023 to May 14, 2025, and property that becomes available for use after 2029 gets 10% if the expenditure was incurred before 2030. The credit is repealed on January 1, 2030, so expenditures must be incurred by December 31, 2029. For a CCPC it is refundable regardless of tax payable.
• Qualifying corporations must be CCPCs throughout the tax year with a permanent establishment in Ontario and must carry on manufacturing and processing activities in the province. Since May 15, 2025, a corporation that is not a CCPC can claim the Expanded OMMITC instead: 15% on the same classes of property, non-refundable, with unused credits carried forward up to 10 years.
• Qualifying expenditures include: the cost of a Class 1 building used for manufacturing or processing in Ontario that is eligible for the additional 6% CCA for M&P buildings (at least 90% of its floor space used for M&P in Ontario at the end of the tax year), and machinery and equipment used in manufacturing or processing goods in Ontario that is in Class 53 (acquired before 2026) or, after 2025, in paragraph (a) of Class 43.
• The annual expenditure limit is $20 million, shared by an associated group and prorated for short tax years, generating a maximum $3 million credit at 15% ($2 million at 10%).
• Assets must be available for use (ITA 13(27) for machinery and equipment, 13(28) for buildings) in the tax year to qualify. The half-year rule of federal CCA does not change the OMMITC base, which is the full capital cost.
• If, within five years of the claim, the property is disposed of, converted to a non-M&P use or removed from Ontario, part or all of the credit must be repaid. This applies to dispositions, conversions and removals on or after May 15, 2025, for claims in tax years ending on or after that date.

Example

A London, Ontario CCPC that manufactures auto parts buys $1.2 million of CNC milling machinery (Class 43(a), since it is acquired after 2025) and builds a $3 million M&P addition to its factory (Class 1 MBC at 10%) in 2026, both available for use that year. Total qualifying expenditures are $4.2 million, well under the $20 million cap. The OMMITC equals $4.2 million × 15% = $630,000, refundable. The corporation must reduce the applicable capital cost by the provincial assistance before working out CCA. Do not add a supposed “federal M&P recovery” to the refund: there is no separate amount established by this example. Income-tax rates, CCA incentives and other assistance require their own eligibility calculations. Ontario current credit rules.

Common mistakes

• Claiming OMMITC on assets used primarily outside Ontario. Only buildings with at least 90% of their floor space used for M&P in Ontario, and machinery and equipment used in M&P in Ontario, qualify.
• Including Class 8 or Class 10 assets. The credit is limited to specified manufacturing classes (Class 1 MBC, and Class 53 or, after 2025, Class 43(a)).
• Forgetting that associated corporations share the $20 million expenditure cap. Large corporate groups must allocate the limit on Schedule 572.
• Not adjusting the CCA capital cost base. The OMMITC is government assistance, so ITA 13(7.1)(f) reduces the capital cost of the property by the credit from the time the corporation is entitled to it, not from the following tax year as it does for a federal ITC under 13(7.1)(e).

Related concepts

• Ontario Corporate Tax Rates
• Ontario Innovation Tax Credit
• Capital Cost Allowance Overview
• Accelerated Investment Incentive Property (AIIP)