May 5, 2025 | Oakville, Ontario – In a decisive move to protect Ontario’s manufacturing industry from global economic pressures and foreign tariffs, the Ontario government is injecting $1.3 billion over the next three years to enhance and expand the Ontario Made Manufacturing Investment Tax Credit. This initiative is part of the province’s larger strategy to shield jobs, attract investments, and strengthen Ontario’s position as a global manufacturing hub.
Finance Minister Peter Bethlenfalvy emphasized the urgency of this support, citing the negative impact of U.S. President Trump’s tariffs on Ontario’s economy, particularly in the form of job losses. “Our plan to protect Ontario will bring in new investments to create new jobs and opportunities for our world-class manufacturing workers,” Bethlenfalvy stated.
What’s Changing in the Tax Credit?
The Ontario government is increasing the tax credit rate from 10% to 15% and expanding eligibility beyond Canadian-controlled private corporations (CCPCs) to include non-Canadian-controlled private corporations—including publicly traded companies.
Key Changes at a Glance:
| Aspect | Previous | New (Effective May 15, 2025) |
|---|---|---|
| Credit Rate | 10% | 15% |
| Max Annual Credit | Up to $2 million | Up to $3 million |
| Eligibility | Canadian-controlled private corporations only | Now includes non-CCPCs and public corporations |
| Credit Type | Refundable | Refundable (CCPCs), Non-refundable (non-CCPCs) |
| Eligible Investments | Buildings, machinery, and equipment used for manufacturing or processing | Same, includes capital property in Class 1 or Class 53 |
| Valid Period | 2023–2028 | New changes valid from May 15, 2025 to 2030 |
Background on the Ontario Made Manufacturing Investment Tax Credit
First introduced in 2023, the Ontario Made Manufacturing Investment Tax Credit was designed to help reduce operating costs and stimulate growth in Ontario’s manufacturing and processing industries. It allows qualifying businesses to claim a percentage of their capital investments in buildings, machinery, and equipment as a credit against their corporate taxes.
The credit is part of Ontario’s broader economic strategy to boost competitiveness, encourage domestic production, and modernize facilities to withstand global pressures, including protectionist measures from trading partners.
What the Ministers Are Saying
“Today’s announcement will provide important support to the more than 830,000 men and women who work in the manufacturing sector, and who are worried about the impact of tariffs on their jobs,”
– Vic Fedeli, Minister of Economic Development, Job Creation and Trade
Fedeli reaffirmed that Ontario is “doubling down” on efforts to protect and grow the economy through smart, targeted investment—especially as economic uncertainty grows globally.
Who Will Benefit?
Both Canadian and now foreign-controlled companies operating in Ontario stand to benefit from this expanded tax credit. Manufacturers investing in eligible capital property will have greater incentives to:
- Expand or modernize production facilities
- Invest in new machinery or processing equipment
- Create or protect skilled jobs in Ontario
- Strengthen their global competitiveness
The credit is expected to have a significant impact on mid-size and large manufacturers, especially those affected by foreign tariffs or supply chain disruptions.
📌 Quick Facts
- Ontario’s manufacturing sector employs over 830,000 people, making it a cornerstone of the province’s economy.
- The Ontario Made Tax Credit will deliver an estimated $1.4 billion in income tax relief from 2023 to 2028.
- The new expansion adds $1.3 billion in tax support from 2025 to 2028.
- Eligible investments must fall under Capital Cost Allowance (CCA) Class 1 or Class 53, typically used for buildings and heavy machinery.
- The updated credit applies to investments made between May 15, 2025 and 2030.
🧭 What’s Next?
The full details of the enhanced tax credit, including eligibility rules and implementation plans, will be revealed in the 2025 Ontario Budget, set to be released on May 15, 2025.
The government has also hinted that this measure is just one piece of a larger plan aimed at making Ontario the most competitive jurisdiction in the G7 for manufacturing investment. This will be supported by the Advancing Ontario Made Manufacturing Plan, a 10-year roadmap for growing the sector’s workforce, supply chains, and adoption of future technologies.
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