The Ontario government on Wednesday announced a new manufacturing investment tax credit to help local manufacturers grow, innovate, become more competitive and create jobs in the province.
“This new tax credit will give Ontario-based manufacturers another reason to invest in home grown, Ontario-made innovation and expand operations,” said Premier Doug Ford at a manufacturing plant in Oakville.
This was a pre-budget announcement, ahead of Thursday’s main budget announcement where the Progressive Conservative government rolls out its fiscal plans for the coming year.
“As we navigate global economic uncertainty, our government is working around the clock to ensure that we are creating the right conditions for Ontario’s world-class manufacturing sector to grow and create more jobs,” said Ford.
The government will propose legislation that would create a 10 per cent refundable corporate income tax credit of up to $2 million per year for Canadian-controlled private corporations on qualifying investments.
The investments would be in buildings, machinery and equipment for use in different manufacturing businesses in the province.
If passed, the tax credit would be available for qualifying investments up to $20 million in a taxation year.
Qualifying investments would be expenditures for certain capital property included in Class 1 or Class 53 for capital cost allowance purposes.
“Our government is continuing to bring back the province’s manufacturing sector by attracting key investments and creating and protecting jobs in communities across the province,” said Peter Bethlenfalvy, the province’s Minister of Finance.
From 2004 to 2018, employment in Ontario’s manufacturing sector declined by over 300,000 workers.
The president and CEO of Canadian Manufacturers & Exporters was among those commenting Thursday on the government announcement.”
“This new credit will go a long way to broadening our industrial strategy — providing predictable funding for essential equipment purchases and increased productivity to enable business growth,” Dennis Darby wrote in a statement that was reported by CBC News.
The PC government said the actions Ontario has taken to save costs for businesses would enable an estimated $8 billion in cost savings and support for some Ontario employers in 2023, with $3.6 billion to go to small businesses, the press release said.
“The new Ontario Made Manufacturing Investment Tax Credit is just one part of our plan to build a strong economy for the future, today,” said Bethlenfalvy.
The government will provide more information on its plan and how to navigate these uncertain economic times in the 2023 Budget, which will be released Thursday.