Ontario manufacturers can claim a 10%–15% corporate tax credit on eligible equipment/buildings. Learn eligibility, timing, and how to file.
If you manufacture or process goods in Ontario and you’re buying production equipment (or building/expanding space), the Ontario Made Manufacturing Investment Tax Credit (OMMITC) can be one of the cleanest incentives available: a refundable corporate income tax credit on qualifying investments, capped at $20M of eligible spend per year (per associated group). The base credit is 10%, and Ontario’s 2025 budget measures created a temporary +5% enhancement (effectively 15%) for eligible property in a defined window. (Canada)
This guide is written for Ontario business owners, CFOs, controllers, and plant managers who need three things in one place:
You’ll also see the “credit brain” behind approvals: how lenders view tax credits, leases, covenants, and the cash-flow reality of waiting for a refund.
Quick correction: you’ll sometimes see “10–20% back” floating around online. For OMMITC specifically, the authoritative framework is 10%, temporarily 15% for certain timing—not 20%. We’ll show where the confusion comes from and how to model your real after-tax benefit without guessing. (Canada)
Key point: OMMITC is a corporate income tax credit designed to lower the cost of capital investment for Ontario manufacturers and processors.
At a high level, OMMITC:
If you’re comparing funding options for that investment, the right starting point is structure (not rate): lease vs buy and cash-flow impact. Here are two Mehmi guides that pair well with this tax credit planning:
Key point: The credit is calculated as a percentage of eligible expenditures, up to the annual cap.
The CRA’s OMMITC overview describes the standard framework as 10% refundable, applied to qualifying investments up to $20M per tax year, for a maximum of $2M. (Canada)
Ontario’s 2025 budget measures (enacted in Bill 68) amended the OMMITC rules so the credit rate is 10% plus an additional 5% for eligible property that becomes available for use on or after May 15, 2025 and before January 1, 2030. (Legislative Assembly of Ontario)
Usually one of three things:
For planning, keep the math clean:
Key point: OMMITC is aimed at corporations with an Ontario manufacturing footprint—and the definition is stricter than most owners expect.
According to CRA’s program overview, eligible corporations generally must:
Ontario’s 2025 measures also created an “expanded” version (a separate section) for certain non-CCPCs (details depend on that expanded credit’s specific eligibility rules). (Legislative Assembly of Ontario)
If you’re financing the equipment, lenders don’t just ask “can you claim it?” They ask:
A healthy deal assumes OMMITC is upside—not the only reason the payment works.
Key point: Eligibility is tied to CCA classes and “manufacturing or processing use,” not the vendor’s marketing brochure.
CRA outlines that qualifying investments are expenditures for CCA Class 1 and Class 53 (with a shift toward Class 43(a) after 2025 for certain machinery/equipment criteria). (Canada)
CRA’s summary notes eligibility for buildings used for manufacturing/processing in Ontario (with a 90% floor space use threshold and additional conditions tied to CCA treatment). (Canada)
CRA’s summary describes qualifying machinery/equipment for manufacturing or processing of goods in Ontario, with specific timing rules and the class transition after 2025. (Canada)
Owners often over-assume this. A quick practical filter:
If you’re unsure, treat it like a tax position: document what the asset does, where it’s used, and why it’s integral to manufacturing/processing.
Key point: You don’t claim OMMITC just because you paid a deposit—you claim based on when the property becomes available for use under tax rules.
CRA explicitly flags that “available-for-use” rules matter and differ between buildings and other property. (Canada)
If your fiscal year ends December 31:
That’s not “bad,” but it changes:
Ontario’s 2025 budget measures also amended OMMITC rules around eligible expenditures timing (including retroactive adjustments and rules allowing eligibility up to 2030 in the measure window). (Legislative Assembly of Ontario)
Practical takeaway: If the credit is material for your cash plan, align three calendars early:
Key point: Most misses aren’t “eligibility” misses—they’re filing/package misses.
CRA’s OMMITC page says you claim by filing Schedule 572 with your corporate return. (Canada)
CRA also publishes T2SCH572 as the schedule used for the OMMITC claim. (Canada)
CRA notes you cannot claim for expenditures incurred under a contract with a non-arm’s-length person/partnership (at the time the expenditure is incurred). (Canada)
If you’re buying equipment from a related entity, get tax advice early—don’t assume it qualifies.
Key point: Use this to sanity-check magnitude and timing—not as tax advice.
Key point: Your credit claim and your financing structure should support each other—not fight each other.
Even if OMMITC is refundable, the refund timing may not align with when payments start. That’s why lease structure matters:
If you want benchmarks on what drives pricing and structure in Canada, see Equipment Lease Rates Canada (2025 guide) (https://www.mehmigroup.com/blogs/equipment-lease-rates-canada-2025-guide-tips).
A lot of Ontario manufacturers have “sleeping equity” in equipment they already own. If you need cash to fund automation or expansions, sale-leaseback can be the bridge—without waiting for tax time.
Start here:
Lenders reduce risk in three ways:
A tax credit helps—mostly indirectly—because it improves liquidity and can reduce the need for additional borrowing. But underwriters rarely underwrite “to” the credit unless:
CRA’s OMMITC summary includes a notable rule: for calculating this credit only, amounts related to OMMITC that would otherwise be government assistance for capital cost purposes are deemed not to be government assistance and do not reduce the capital cost for CCA calculation. (Canada)
That’s a big technical nuance—discuss with your accountant so your tax model isn’t accidentally conservative or accidentally wrong.
Key point: Planning isn’t just “how to claim”—it’s “how to keep it.”
Ontario’s 2025 budget materials describe amendments to strengthen integrity, including repayment/recapture concepts if eligible property is sold, converted to non-manufacturing use, or removed from Ontario within a set period. (Ontario Budget)
And the enacted budget measures (Bill 68) also reflect the government’s intent to tighten and extend rules through the 2025–2030 window. (Legislative Assembly of Ontario)
Practical implications for manufacturers:
Key point: Most mistakes are preventable with a clean paper trail.
If the asset doesn’t cleanly land in the eligible CCA class and manufacturing/processing use, you’re left arguing. Better: document the use case upfront.
Ordering and paying isn’t enough. Align install/commissioning and year-end early. (Canada)
The $20M limit is shared among associated corporations. If the group doesn’t coordinate, you can end up with an internal scramble. (Canada)
Even refundable credits arrive after filing cycles. Don’t make a lease payment “only work” because you assume the refund is immediate.
If you need to explore broader financing lanes while keeping the plan lease-first, use:
Key point: The “win” is not the biggest credit—it’s a structure that lets you install, run, and claim without liquidity stress.
Company: Ontario-based metal fabricator (incorporated), multi-shift operations
Project: CNC automation cell + material handling upgrades
Total equipment cost: ~$3.2M
Goal: Increase throughput, reduce scrap, stabilize delivery lead times
What almost went wrong
They planned the purchase around “getting the credit in the same year,” but the install and commissioning schedule pushed the equipment’s available-for-use into the next fiscal year.
What we changed
Outcome
Lesson
OMMITC is powerful—but it’s not a substitute for a structure that works before the refund arrives.
If you’re choosing an advisor for a transaction like this, here’s what “good broker support” looks like: Top Equipment Financing Brokers in Canada (https://www.mehmigroup.com/fr-ca/blogs/top-equipment-financing-brokers-in-canada).
Key point: Treat OMMITC like a project—eligibility, timing, paperwork.
Before you sign the PO:
If the purchase is construction-adjacent (cranes, forklifts, excavators used in production yards), you may also want: Construction Equipment Leasing Canada (Complete Guide) (https://www.mehmigroup.com/blogs/construction-equipment-leasing-canada-complete-guide-2026).
If you’re investing in Ontario manufacturing equipment and want to structure the lease so the project works before the tax credit arrives, Mehmi Financial Group can help you model payments, timing, and documentation so your financing and your OMMITC claim don’t collide.
Yes—CRA describes the OMMITC as a refundable corporation income tax credit (subject to the program’s eligibility and filing rules). (Canada)
The base framework applies to qualifying investments up to $20 million per tax year, for a maximum credit of $2 million at 10% (shared across an associated group). (Canada)
Ontario’s 2025 budget measures (Bill 68) amended the OMMITC formula to add an additional 5% for eligible property available for use on or after May 15, 2025 and before January 1, 2030. (Legislative Assembly of Ontario)
You claim it by filing Schedule 572 with your T2 return (CRA publishes T2SCH572 for this purpose). (Canada)
Often, yes—but the “who claims what” depends on how the lease is structured and who is treated as the owner for tax purposes. This is where coordinating your accountant and your financing structure matters. (Lease structure guide: https://www.mehmigroup.com/blogs/leasing-vs-financing-in-canada-best-option-for-business)
Assuming the credit arrives when you pay the invoice. The claim is tied to eligibility rules and available-for-use timing, so build a cash plan that works even if the refund lands later. (Canada)
.avif)
.svg){kind=small}