Ontario Made Manufacturing Investment Tax Credit (OMMITC)

Insider Tip

The $20M per-year expenditure cap is shared among associated corporations (related companies under common control). If your manufacturing group has multiple Ontario entities, coordinate capital expenditure planning across entities to maximize use of the $20M cap. On timing: only the EXPENDITURE has to be incurred by December 31, 2029 — an asset that becomes available for use in 2030 is still eligible, at the 10% rate rather than 15%, so a late-2029 purchase with a 2030 commissioning date is not a write-off. The rate also stepped up from 10% (March 2023–May 14, 2025) to 15% (May 15, 2025 onward), so document exact acquisition and available-for-use dates for anything straddling those dates. For non-CCPCs, the Expanded OMMITC is non-refundable but carries forward up to 10 taxation years, so it retains value through a loss year — and its own eligibility window starts May 15, 2025, not March 2023. Finally, plan to hold: disposing of, repurposing, or moving the property out of Ontario within five years triggers a repayment.

Rejection Pitfalls 8

• Corporation is not a CCPC throughout the entire taxation year (e.g. became foreign-controlled mid-year)
• No permanent physical establishment in Ontario (head-office-only or virtual operations don't qualify)
• Capital assets are in CCA classes other than Class 1 or Class 53/Class 43 (e.g. Class 10 vehicles, Class 8 general equipment not used in manufacturing)

Success Profile

Ontario-based CCPCs in manufacturing and processing industries — food and beverage, automotive parts, industrial equipment, plastics, textiles, electronics — making material capital investments in Ontario production capacity. Particularly valuable for mid-market manufacturers ($5M-$50M revenue) undertaking plant expansions, equipment modernization, or automation investments who have Ontario taxes owing to offset the refundable credit against (though refundable means even unprofitable manufacturers receive cash).

Evaluation Criteria

Non-competitive statutory entitlement. CRA reviews T2 returns to confirm: CCPC status, Ontario permanent establishment, eligible CCA class of assets claimed, manufacturing use percentage (for Class 1 buildings), expenditure amounts, and compliance with the $20M per-year cap. No merit assessment — eligible claims receive the credit automatically.

Application Steps

Required Documents 7

Eligible Expenses 4

• Class 1 buildings: construction, renovation, or acquisition of qualifying manufacturing facilities where 90% or more of floor space is used for manufacturing or processing goods in Ontario
• Class 53 machinery and equipment: assets primarily used to manufacture or process goods for sale or lease in Ontario, acquired after March 22, 2023 (before 2026)
• Class 43(a) machinery and equipment: same use requirement, for assets acquired after 2025
• Installation costs for eligible machinery and equipment

Ineligible Expenses 6

• Class 1 buildings used for non-manufacturing purposes (offices, retail space — unless incidental to a qualifying manufacturing facility)
• Class 8, 10, or other CCA class assets not qualifying as Class 1 or Class 53/43
• Intangible assets, software, and intellectual property
• Leased equipment (ownership must transfer to the corporation)
• Capital expenditures incurred after December 31, 2029
• Expenditures for assets not used in manufacturing or processing goods in Ontario

Claim timing

Continuous — claimed on each annual T2 corporation income tax return for taxation years ending from March 23, 2023 through December 31, 2029.

Deadline Notes

The OMMITC is repealed effective January 1, 2030, and expenditures must be incurred on or before December 31, 2029 in order to be eligible. The available-for-use date affects the RATE, not eligibility: the enhanced 15% rate applies only where the property becomes available for use within the taxation year and on or after May 15, 2025 but before January 1, 2030. If the property becomes available for use after December 31, 2029, the 10% rate applies, provided the expenditure was incurred before January 1, 2030. The credit is claimed on the annual T2 return with no additional application required.

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Ineligible Organizations

• Corporations that are not Canadian-controlled private corporations (for the refundable OMMITC — Expanded OMMITC available for non-CCPCs at same rate but non-refundable)
• Tax-exempt organizations
• Corporations without a permanent physical establishment in Ontario
• Sole proprietors and partnerships

Compatible Programs

Clawback Risk

Medium Risk

There IS a statutory recapture. A corporation may be required to repay the OMMITC if, within the next five years, the particular property is disposed of, its use is changed to a non-manufacturing or non-processing use, or it is removed from Ontario. The repayment is the lesser of: the amount of the credit that was claimed, and a proportionate amount calculated by dividing either the fair market value of the property — or, if it is disposed of to a person dealing at arm's length, the proceeds of disposition — by the original capital cost of the property. This applies to dispositions, conversions or removals on or after May 15, 2025, for OMMITC claims for taxation years ending on or after May 15, 2025. Separately, if CRA audits and determines that assets were misclassified (e.g. not truly Class 53, or not used 90% for manufacturing), the credit can be reassessed and recovered with interest.