Ontario manufacturers and processors investing in buildings, machinery, or equipment this year are working with a materially richer credit than the one that existed before May 2025 — and, for the first time, the credit isn't limited to Canadian-controlled private corporations. The Ontario Made Manufacturing Investment Tax Credit (OMMITC) jumped from a 10% refundable rate to 15%, and a new 15% non-refundable stream now opens the credit to public corporations, foreign-controlled corporations, and other non-CCPCs with a permanent establishment in the province. For a mid-sized Toronto-area manufacturer planning a plant expansion, the difference between the old and new rate on a $10 million equipment and building project is $500,000.
What changed, and when
The OMMITC began in the 2023 Ontario Budget as a 10% refundable Corporate Income Tax credit, capped at $2 million a year (10% of a $20 million expenditure limit), for CCPCs investing in eligible buildings and manufacturing equipment in Ontario. That original version was enacted through Bill 85 and received Royal Assent on May 18, 2023.
The enhancement arrived two years later. Ontario's 2025 Budget proposed raising the refundable rate to 15% and adding a parallel non-refundable credit for corporations that aren't CCPCs — and the 2025 Fall Economic Statement, delivered November 6, 2025, confirmed and refined the measure. The legislation implementing it, Bill 68, the Plan to Protect Ontario Act (Budget Measures), 2025 (No. 2), received Royal Assent on November 27, 2025, and is now Chapter 15 of the Statutes of Ontario, 2025. This is worth stating plainly because the rate increase is genuinely in force, not a budget promise still working through the Legislature: the enhanced rate applies to eligible investments made on or after May 15, 2025, and before January 1, 2030.
The numbers, before and after
| Before May 15, 2025 | May 15, 2025 – Dec 31, 2029 | |
|---|---|---|
| Rate (CCPCs, refundable) | 10% | 15% |
| Rate (non-CCPCs, non-refundable) | not available | 15% |
| Annual expenditure limit | $20 million | $20 million |
| Maximum annual credit | $2 million | $3 million |
The $20 million annual expenditure limit is unchanged and must still be shared among an associated group of corporations — an associated group files an agreement allocating the limit among its members, and the limit is prorated for a short taxation year.
Source: Canada Revenue Agency — Ontario Made Manufacturing Investment Tax Credit.
Who qualifies, and on what kind of spending
A qualifying corporation for the refundable 15% credit must be a CCPC throughout the taxation year, must not be exempt from Ontario corporate income tax, and must carry on business in Ontario through a physical permanent establishment — an office, a factory, or a workplace.
The new non-refundable 15% credit extends the same rate, the same $20 million expenditure limit, and the same eligible-property rules to corporations that are not CCPCs — public corporations, foreign-controlled corporations, and other non-resident corporations — provided they also carry on business in Ontario through a permanent establishment. Because it's non-refundable, it can only reduce Ontario Corporate Income Tax otherwise payable; unlike the CCPC version, it doesn't generate a refund in a loss year.
Eligible investments, under both streams, are expenditures for constructing, renovating, or acquiring buildings used for manufacturing or processing (Capital Cost Allowance Class 1), and machinery and equipment used in manufacturing or processing (Class 53, or Class 43 for property not eligible for Class 53), with the property located in Ontario and used primarily in manufacturing or processing.
How to claim it
OMMITC — either stream — is claimed by filing Schedule 572, Ontario Made Manufacturing Investment Tax Credit, with the corporation's T2 return for the year in which the eligible expenditure was incurred. The refundable amount is reported on Schedule 5, Tax Calculation Supplementary – Corporations; the non-refundable amount and any repayment of a previously claimed credit have their own lines on the same schedule. There's no separate application to a ministry — it's calculated and claimed directly on the corporate return, which means the quality of the fixed-asset and project cost records behind the claim matters as much as the rate itself.
What Ontario manufacturers should do now
- Confirm the in-service date, not just the purchase date. The enhanced rate turns on the property being an eligible investment made on or after May 15, 2025; a building or piece of equipment ordered earlier but completed or available for use after that date may still qualify for the higher rate — this is a detail worth confirming for any project that straddled mid-2025.
- Check associated-group allocation before year-end. If your corporation is associated with others, the $20 million limit is shared, not multiplied — get the allocation agreement filed rather than assuming each entity gets its own $20 million.
- Revisit projects that were shelved as uneconomical under the 10% rate. A capital project that didn't pencil out with a $2 million maximum credit may look different at a $3 million maximum, particularly layered with the accelerated Capital Cost Allowance and immediate-expensing rules already in effect for Canadian manufacturers.
- Non-CCPCs with an Ontario plant should check eligibility for the first time. If your corporation previously assumed OMMITC wasn't available because it isn't Canadian-controlled, that's no longer the full picture — confirm whether the non-refundable stream applies before year-end tax planning.
- Keep Class 1, 53, and 43 property records separated from general capital asset records. Schedule 572 requires the eligible expenditure to be identified by class and by in-service date; clean records at the time of purchase save reconstruction work at filing time.
Where this fits with Ontario's other 2026 corporate tax changes
This enhancement sits alongside a run of other 2026 Ontario measures reshaping the numbers for corporations with Ontario operations — the small business Corporate Income Tax rate cut to 2.2% effective July 1, 2026, and the accelerated Capital Cost Allowance and immediate-expensing rules for Canadian manufacturers. Our Ontario corporate tax guide has the current rate schedule and credit summary for corporations filing under any of these rules this year.
Key takeaways
- The OMMITC refundable rate rose from 10% to 15% for CCPCs, for eligible investments made on or after May 15, 2025 and before January 1, 2030.
- A new 15% non-refundable credit extends the same benefit to non-CCPCs — public, foreign-controlled, and other non-resident corporations — with an Ontario permanent establishment.
- The $20 million annual expenditure limit is unchanged, but the maximum annual credit rises from $2 million to $3 million at the new rate; the limit is still shared across an associated group.
- The enhancement was enacted through Bill 68, which received Royal Assent on November 27, 2025 — it is current law, not a pending proposal.
- Both streams are claimed on Schedule 572 with the corporation's T2 return; there is no separate application.
If your Ontario business has a manufacturing building, machinery, or equipment project underway, RN Canada can help confirm which stream applies, check associated-group allocation, and make sure the Schedule 572 claim is built on clean asset records from the outset.