The Ontario Minister of Finance, Peter Bethlenfalvy, delivered the 2023 Budget on March 23, 2023. The 2023 Budget aims to provide a better economic outlook and build upon the Ontario infrastructure. Ontario is projecting a budget surplus of $200 million in 2024-2025, which is expected to increase to 4.4 billion in the following year.
The following is a summary of the Ontario provincial government’s most relevant proposed tax measures in its 2023 Budget.
Measures Affecting Businesses
The New Ontario Made Manufacturing Investment Tax Credit
The 2023 Ontario budget introduced the new Ontario Made Manufacturing Investment Tax Credit, a refundable tax credit offered to Canadian-Controlled Private Corpoations that make qualifying investments in buildings, machinery and equipment used in manufacturing or processing. The Ontario Made Manufacturing Investment Tax Credit is a 10% refundable credit on eligible expenditures. The credit is available for qualifying investments of up to a limit of $20 million in a taxation year per associated group and would be prorated for a short taxation year.
Qualifying investments are expenditures for certain capital property included in Class 1 or Class 53 for capital cost allowance (CCA) purposes. Qualifying investments in Class 1 (90% of the floor space of the building must be used at the end of the corporation’s taxation year for manufacturing or processing in Ontario) include expenditures for constructing, renovating, or acquiring buildings used for manufacturing or processing in Ontario that become available for use on or after March 23, 2023.
Qualifying investments in Class 53 include expenditures for machinery and equipment used in the manufacturing or processing of goods in Ontario. The machinery and equipment must be acquired and become available for use on or after March 23, 2023, and before 2026.
The government would undertake a review of the credit every three years.
