Tax Bulletin: Ontario Tax Credits for Businesses Expiring and Changing

The Ontario tax incentive landscape is undergoing a significant transition. The Regional Opportunities Investment Tax Credit (ROITC) is a 10% tax credit for the acquisition of or addition to commercial buildings is set to expire on December 31, 2026. Meanwhile, the government is enhancing the Ontario Made Manufacturing Investment Tax Credit (OMMITC), recently increasing its rate and expanding eligibility to bolster provincial manufacturing and processing.

1. ROITC Expiration

The Regional Opportunities Investment Tax Credit (ROITC) was designed to spur growth in designated regions (including Quinte and Kingston) by offering a refundable tax credit on commercial and industrial building investments.

• Deadline: Only expenditures incurred for a building or addition that is “available for use” on or before on December 31, 2026 are eligible for the credit.
• Credit Rate: A 10% refundable credit on qualifying expenditures exceeding $50,000.
• Benefit Cap: The credit is capped at $45,000 annually (I.e. on expenditures of up to $500,000).
• Eligibility: Available to Canadian-controlled private corporations (CCPCs) with a permanent establishment in Ontario that invest in designated geographic areas (e.g., Northern, Eastern, and Southwestern Ontario).
• Eligible Assets: Buildings, additions, or alterations where at least 90% of the floor space is used for non-residential purposes.

Ontario Made Manufacturing Investment Tax Credit (OMMITC)

The Ontario Made Manufacturing Investment Tax Credit (OMMITC) has been enhanced to offer additional support for Ontario manufacturing and processing businesses.

• Rate Enhancement: The rate has increased from 10% to 15% for eligible investments made on or after May 15, 2025, and before January 1, 2030.
• Expanded Eligibility: For the first time, non-CCPCs (such as publicly traded or foreign-owned corporations) can qualify for a 15% non-refundable version of the credit, which includes a 10-year carry-forward provision.
• Maximum Benefit: Corporations can claim eligible expenditures up to $20 million per year, leading to a maximum credit of $3 million (up from the previous $2 million cap).
• Eligible Assets: Capital property used for manufacturing or processing in Ontario:
  • Buildings where all or substantially all (generally 90%) of the building is used for manufacturing or processing and are acquired or renovated after March 22, 2023.
  • Machinery and equipment.
• Sunset Clause: This credit is currently scheduled to be repealed on January 1, 2030.

If you would like to discuss either of these programs more, please contact your advisor at Wilkinson & Company LLP.