OMMITC 2026: The Complete Guide to Ontario's Manufacturing Investment Tax Credit

If your corporation makes things in Ontario, the Ontario Made Manufacturing Investment Tax Credit (OMMITC) is now the single most cash-generative provincial capital incentive in the country. Introduced in the 2023 Ontario Budget at a 10% refundable rate and enhanced in the 2025 Ontario Budget to 15% refundable for Canadian-controlled private corporations on expenditures incurred after May 14, 2025, OMMITC pays back a flat 15 cents on every dollar a CCPC invests in qualifying manufacturing buildings and equipment used in Ontario — up to a $20 million expenditure cap, or $3 million in refundable cash per year. For a manufacturer dropping $5M–$8M into a new line, this is real money, and it shows up as a cheque, not a deferred tax position. Used well, it converts the “is now the right time to expand the Whitby plant” calculus by several months of payback. Used carelessly, it gets lost to the CCPC test, asset class confusion, associated-group sharing, or the disposition recapture rules.

This guide is written for Ontario manufacturers and processors that are evaluating, executing, or filing for OMMITC. We cover what it is and why Ontario built it, who actually qualifies (the CCPC line matters, but the Expanded OMMITC for non-CCPCs exists too), which asset classes count (Class 1 buildings for manufacturing, Class 53 equipment through 2025, then Class 43(a) thereafter), the 15% refundable mechanic and the $20 million cap with associated-group sharing, how OMMITC stacks with federal incentives like the Clean Technology ITC and the Atlantic Investment Tax Credit, the documentation that supports a defensible claim, how to file Schedule 572 with your T2, what the Ontario Ministry of Finance focuses on during review, and the practical mistakes that cost manufacturers the most credit. Numbers in this guide reflect the OMMITC and Expanded OMMITC rules in force as of May 2026 — confirm against the current Schedule 572 and Ministry of Finance bulletins if you are filing during a legislative transition.

What OMMITC is and why Ontario built it

OMMITC is a refundable Ontario corporate tax credit on qualifying capital investments in manufacturing and processing assets located in Ontario. It was introduced in the 2023 Ontario Budget as a 10% refundable credit for CCPCs, with eligibility for property acquired and available for use on or after March 23, 2023. The 2025 Ontario Budget then did two things: (1) it bumped the CCPC rate from 10% to 15% refundable for expenditures incurred on or after May 15, 2025; and (2) it introduced an Expanded OMMITC that extends the 15% rate to corporations that are not CCPCs, but on a non-refundable basis with a 10-year carryforward instead of a cash refund. Both versions run through to December 31, 2029, when the program is currently scheduled to sunset.

The policy rationale is straightforward. Ontario wanted a credit big enough to move the needle on a capex decision — not a 2% notional adjustment, but a meaningful first-year refund — and simple enough to model without a tax opinion. The OMMITC structure achieves that: a flat percentage on a clean expenditure base, using the same definitions Canadian tax practitioners already know from Schedule 8 (capital cost allowance).

Who qualifies: the CCPC test, Ontario PE, and the Expanded OMMITC

OMMITC eligibility hinges on three pillars: corporate status, an Ontario permanent establishment, and the use of the property in manufacturing or processing in Ontario.

Corporate status: CCPC for refundable, non-CCPC for the Expanded version

The base OMMITC requires the corporation to be a Canadian-controlled private corporation throughout the taxation year. CCPC status is defined in subsection 125(7) of the federal Income Tax Act: a private corporation resident in Canada that is not controlled, directly or indirectly, by one or more non-resident persons, public corporations, or any combination thereof. In practice the line is sharp. If a U.S. parent acquires more than 50% of the voting shares of an Ontario manufacturer on December 1, the corporation loses CCPC status for the entire year — and with it, the refundable 15% OMMITC for that year.

The 2025 Budget addressed that gap by introducing the Expanded OMMITC: a 15% non-refundable credit for corporations that are not CCPCs throughout the year. Same eligible property, same $20 million expenditure cap, same Ontario PE requirement. The difference is mechanical: instead of being paid out as a refund, the credit reduces Ontario corporate income tax payable, and any unused amount can be carried forward up to 10 years. For a profitable foreign-owned or publicly traded Ontario manufacturer that has steady Ontario tax payable, that 10-year window is usually enough to absorb the full credit; for a loss-position non-CCPC, the credit can effectively sit dormant.

Ontario permanent establishment

The corporation must carry on business in Ontario through a physical permanent establishment — an office, factory, or workplace in the province. The Ministry of Finance is explicit that this means a real, fixed Ontario presence, not just a registered head office or a mailing address. For most OMMITC claimants this is trivially satisfied because the eligible assets themselves are physically located in Ontario, but it does matter for groups where the asset-holding corporation is different from the operating corporation. Make sure the corporation that owns the qualifying property is also the one with the Ontario PE.

Use in manufacturing or processing in Ontario

The asset must be used, primarily, in the manufacturing or processing of goods for sale or lease, and the manufacturing or processing must take place in Ontario. The CRA's long-standing interpretation of “manufacturing or processing” (M&P) under the Income Tax Act applies: it captures the conventional industries you expect — food and beverage, fabricated metal, plastics and rubber, automotive parts, machinery, electrical equipment, chemicals, pharmaceuticals, paper and converted paper products, and so on — and excludes a list of explicitly carved-out activities such as farming, fishing, logging, construction, oil and gas extraction, and certain mineral activities. If your business has historically claimed the federal M&P deduction under section 125.1, you almost certainly meet the OMMITC M&P test. If you have never claimed it, you should look hard at whether your activities qualify before assuming they do.

Eligible asset classes

OMMITC covers two narrow but important buckets of capital cost allowance property: certain Class 1 buildings, and certain Class 53 / Class 43(a) machinery and equipment. Anything outside those classes — computer equipment in Class 50, vehicles in Class 10, leasehold improvements in Class 13 — does not qualify, regardless of how directly the asset supports the manufacturing operation.

Class 1 buildings used for manufacturing or processing

A Class 1 building qualifies for OMMITC if (a) it is acquired by the corporation on or after March 23, 2023 and becomes available for use, (b) at least 90% of the floor space is used at the end of the taxation year for the manufacturing or processing of goods for sale or lease, and (c) the building is located in Ontario. The 90% threshold is the same one used federally for the Class 1 6% additional CCA on M&P buildings (the “Class 1(q)” election) — if you have made or considered that election, the analysis carries straight across.

What counts as “the building” for OMMITC is the structure itself plus its component parts: foundations, walls, roof, plumbing, electrical, HVAC integrated into the building, elevators, and so on. Site improvements like parking lots, fencing, and external landscaping live in Class 17 and do not qualify. The land underneath the building is not depreciable at all and is never part of the OMMITC base.

Class 53 machinery and equipment (through 2025)

For property acquired and available for use after March 22, 2023 and before 2026, the equipment side of OMMITC tracks Class 53: machinery and equipment used in Canada primarily in the manufacturing or processing of goods for sale or lease. Class 53 is a generous bucket. It includes production line machinery, robotics, conveyors, packaging equipment, CNC tools, injection moulding equipment, food-processing equipment, mixing and blending equipment, and similar property — effectively the “working equipment” of a manufacturing operation.

Excluded from Class 53 (and therefore from OMMITC on the equipment side) are buildings (Class 1), most vehicles (Class 10 or 10.1), property used in farming or fishing (Class 8 territory), and assets used in activities excluded from M&P. Computer equipment used to run production lines (a manufacturing execution system on Class 50 hardware) is a recurring grey area — the hardware itself sits in Class 50, but the embedded controllers and PLCs that are physically integrated with Class 53 equipment generally take the character of the equipment they are part of. Document the allocation carefully.

Class 43(a) machinery and equipment (after 2025)

Class 53 was a time-limited federal accelerated CCA class. For property acquired after 2025, the equipment that previously would have landed in Class 53 falls into paragraph (a) of Class 43 — the residual M&P equipment class — at a 30% declining-balance CCA rate. OMMITC follows the same migration: from 2026 onward, the eligible equipment base for OMMITC is “property described in paragraph (a) of Class 43.” The substantive scope is the same (M&P machinery and equipment), but the CCA mechanics on the federal side change. For OMMITC purposes the rate stays at 15% on the cost of the property regardless of which class it sits in.

What is not on the OMMITC menu

OMMITC is not a clean-tech credit. Class 43.1 and 43.2 (specified clean energy equipment) are not generally eligible for OMMITC the way they are for the federal Clean Technology ITC. That is a common point of confusion for manufacturers investing in cogeneration, ground-source heat, or industrial solar — that equipment may qualify for the federal Clean Tech ITC and provincial sales tax rebates, but it is generally outside the OMMITC envelope unless the property happens to also fall within Class 53 or Class 43(a) as M&P equipment. Verify each major asset against the current Schedule 572 instructions.

The 15% refundable mechanic

The credit is calculated as 15% of the corporation's qualifying investment expenditure for the taxation year. Qualifying investments means the capital cost of eligible Class 1 buildings and Class 53 / Class 43(a) equipment that the corporation acquired and that became available for use in the taxation year. The expenditure base is the actual capital cost, before CCA — it is not the undepreciated capital cost balance, and it is not reduced by the federal M&P-specific accelerated CCA. It is the dollars in the door.

For property acquired during the transition window — on or after March 23, 2023 but before May 15, 2025 — the 10% rate applies, with a maximum credit of $2 million per year. For property acquired and available for use on or after May 15, 2025, the 15% rate applies, with a maximum credit of $3 million per year. A corporation with eligible expenditures straddling that date applies the two rates separately to the two slugs of expenditure.

Critically, the credit is refundable for CCPCs. If the corporation has zero Ontario tax payable in the year, the entire OMMITC is paid out by CRA on behalf of the Ontario Ministry of Finance as cash. The cheque follows the corporation's notice of assessment, typically within 3–6 months of filing. For non-CCPCs claiming the Expanded OMMITC, the credit is non-refundable: it reduces current-year Ontario tax payable and any excess carries forward up to 10 years.

The $20 million cap and associated-group sharing

The OMMITC expenditure base is capped at $20 million per taxation year, applied on an associated-corporations basis. At the 15% rate, the maximum credit per associated group is therefore $3 million per year; at the legacy 10% rate, $2 million per year. Expenditures above the cap do not generate OMMITC — they simply remain in the corporation's CCA pool to be depreciated normally.

Associated groups share one cap

Two or more corporations associated with each other within the meaning of section 256 of the federal Income Tax Act share a single $20 million expenditure limit. The allocation is up to the group: the corporations file a written allocation agreement and divide the $20M however they like — 100/0, 50/50, 70/20/10, any combination that totals $20M or less. The allocation is filed as part of Schedule 572.

This is the most common error we see on OMMITC claims. A founder-controlled manufacturing group with an OpCo (the active manufacturer) and a RealCo (which owns the building and leases it back) and a separate Investments HoldCo can easily file three separate Schedule 572s, each claiming the full $20M cap, before realizing that all three are associated and share a single cap. The Ministry of Finance picks this up by cross-referencing T2 filings, and the resulting reassessment typically denies two of the three claims entirely.

Short tax years are prorated

The $20M cap is prorated for short taxation years on a days-in-the-year basis. A six-month stub year created by a continuance or amalgamation gets a $10M cap, not $20M.

Acquired and available for use: timing rules that decide the year of the claim

OMMITC is claimed for the taxation year in which the property becomes available for use, which is generally the earlier of (a) the time it is first used to produce income, and (b) the time the corporation could reasonably be expected to have brought it into use. The same available-for-use rules that govern CCA timing under the federal Income Tax Act govern OMMITC timing — there is no separate Ontario test.

For equipment, available-for-use is typically the day the equipment is installed, commissioned, and capable of producing saleable output. For a building, it is the day the building is substantially complete and the occupancy permit issues, or the day production operations begin in the building, whichever is earlier. Progress payments and deposits made in advance of available-for-use do not generate OMMITC in the year they are paid — they generate the credit in the year the asset is ready for service.

For long-cycle projects (a new plant under construction across two or three fiscal years), this means the OMMITC claim is bunched into the year the line goes live. Capex spent in earlier years sits as construction-in-progress until then, and the entire eligible expenditure base hits Schedule 572 in the available-for-use year. That has cash-flow planning implications — expect a single large OMMITC refund rather than a series of smaller ones.

How OMMITC stacks with federal incentives

OMMITC is not exclusive of the federal investment tax credits that may apply to the same property. It stacks, with some interaction rules.

OMMITC and the federal Clean Technology ITC

The federal Clean Technology ITC (and the related CCUS, hydrogen, and EV-supply-chain ITCs) targets a specific list of clean-tech equipment classes — primarily Class 43.1 and Class 43.2 property. Because OMMITC focuses on Class 53 / Class 43(a) and Class 1 M&P buildings, the overlap with the federal clean-tech ITCs is narrow but real. Where a particular asset qualifies for both (an unusual case — one example is dual-purpose equipment that is both M&P machinery and clean-tech equipment), the federal Clean Technology ITC is treated as government assistance for OMMITC purposes, and the OMMITC base is reduced by the assistance received or receivable. The two credits stack, but at a slightly diminished combined rate.

For most OMMITC claimants, this is not a practical concern: the typical Class 53 production line is not also Class 43.1 clean-tech property. But for manufacturers investing in cogeneration, electrified furnaces, or industrial heat pumps, model the two credits side by side before assuming both apply at full rate.

OMMITC and the federal Atlantic Investment Tax Credit

The federal Atlantic Investment Tax Credit applies to property used in the Atlantic provinces and the Gaspé Peninsula — by definition, that excludes Ontario assets. There is no geographic overlap; the two credits do not compete or interact for an Ontario manufacturer.

OMMITC and federal SR&ED capital recovery

Capital expenditures are generally not eligible for the federal SR&ED ITC under the current rules (the SR&ED 2.0 proposals would restore some capital eligibility, but as of this writing the federal capital pool is not in force). This means a piece of M&P equipment used primarily for production but partly for SR&ED experimentation is OMMITC-eligible on its full capital cost without any SR&ED-side grind. If the federal program restores capital SR&ED, expect an assistance interaction similar to Clean Tech ITC — the federal credit will likely grind the OMMITC base for assets that qualify under both.

Disposition, change of use, and recapture

OMMITC carries a five-year clawback rule. If, within five years of acquiring the qualifying property, the corporation (a) disposes of it, (b) changes its use to a non-M&P purpose, or (c) moves it out of Ontario, the corporation must repay a prorated portion of the credit. The repayment is calculated on a straight-line basis: a disposition in year 3 of 5 triggers repayment of 2/5ths of the credit; a disposition in year 4 triggers 1/5th. The repayment is added to Ontario tax payable in the year of the triggering event.

Practical implications. First, if you are planning to relocate equipment to another province or to a U.S. plant within the five-year window, model the OMMITC recapture before you make the move — the after-tax cost of the move is higher than it looks. Second, change-of-use is not just “sold the asset” — converting a manufacturing line to a warehousing role for the same goods may trigger recapture if the asset is no longer used primarily in M&P. Third, the five-year clock runs from the day the property became available for use, not from the day of the OMMITC claim filing.

Documentation requirements

OMMITC is not a heavily documented credit by Canadian standards — there is no technical narrative requirement, no project descriptions, no equivalent of the SR&ED T661. What the Ministry of Finance wants to see, if it asks, is the audit trail behind the numbers on Schedule 572.

What to keep in the file

• Purchase invoices for each piece of qualifying equipment and each building, showing acquisition date, vendor, description, and price.
• Asset register entries classifying each asset to its CCA class (Class 1, Class 53, Class 43(a)) with rationale.
• Available-for-use evidence — commissioning reports, occupancy permits, photographs of equipment installed and running, the date production first commenced on the new line.
• Use evidence — for buildings, a floor plan demonstrating that 90% or more of the floor space is used for M&P at year-end; for equipment, production records demonstrating M&P use.
• Associated-group documentation — a clean section 256 association analysis, plus the written allocation agreement among associated corporations.
• Schedule 27 calculations for the federal M&P profits deduction, which corroborate the M&P character of the corporation's activities.
• Government assistance schedules — any grants, rebates, or other government assistance received in respect of the same property, and how it was treated in the OMMITC base.

If a Ministry of Finance reviewer can reconstruct your Schedule 572 from this file in an afternoon, you are in good shape. If reconstructing the numbers requires going back to engineering for original drawings or chasing down vendors for retroactive invoice clarification, the review will go badly.

How to claim: T2, Schedule 572, and the federal-Ontario filing

OMMITC is claimed by filing Schedule 572 — Ontario Made Manufacturing Investment Tax Credit with the corporation's T2 corporate income tax return for the year. There is no separate Ontario filing; under the federal-Ontario tax collection agreement, CRA processes both the federal T2 and the Ontario provincial schedules in the same workflow.

The filing package

• T2 corporate income tax return for the taxation year in which the qualifying property became available for use.
• Schedule 572 — identifying the eligible property, the rate (10% or 15% depending on acquisition date), the expenditure base, and the credit calculation.
• Schedule 8 (CCA) — the federal CCA schedule for the property, which establishes the class and the capital cost.
• Associated-corporations agreement — required where the $20M expenditure limit is shared among associated corporations.
• Schedule 27 if the corporation is also claiming the federal M&P profits deduction — not required for OMMITC, but a useful corroborating document.

Deadlines

The OMMITC must be claimed within the normal reassessment period for the taxation year — generally three years from the date of the original notice of assessment for a CCPC, four years for other corporations. Unlike SR&ED, OMMITC does not have a shortened “reporting deadline” that closes before the reassessment period — if you forget to file Schedule 572 with the original T2, you can file an amendment within the reassessment window and recover the credit. That is a meaningful relief mechanism compared to SR&ED, where missing the 18-month reporting deadline is fatal.

Audit risk and what the Ministry of Finance focuses on

OMMITC reviews are administered by CRA on behalf of the Ministry of Finance and typically come bundled with the broader T2 desk review or audit. The areas that draw scrutiny are predictable.

Asset class allocation

The single most common adjustment we see on OMMITC reviews is reclassification of equipment out of Class 53 (or Class 43(a)) into a non-qualifying class — usually Class 8 (general office equipment), Class 50 (computer hardware), or Class 10 (vehicles). The fact pattern is almost always the same: the corporation acquired a bundled solution — say, a robotic welding cell with integrated computer controls and an associated mobile material handler — and capitalized the entire purchase to Class 53. On review, CRA breaks the bundle apart, leaves the welding cell in Class 53, moves the computer controls to Class 50, and moves the handler to Class 10. The OMMITC on the non-Class-53 portion is reversed.

The defence is invoice-level itemization at the time of acquisition. If the vendor's quote and invoice itemize the components separately, the corporation has a basis to argue allocation; if the corporation paid a single lump sum for an unitemized bundle, CRA's allocation is hard to dispute.

The 90% M&P floor space test for buildings

For Class 1 buildings, the 90% M&P floor space test is measured at the end of the taxation year. A building that is 95% M&P at acquisition but is later partly converted to office or warehouse use can fall below the threshold by year-end and become OMMITC-ineligible. Keep a floor plan with a square-footage allocation by use, signed off internally each year.

Associated-group disclosure

As covered above, associated-group sharing of the $20M cap is the second-most-common adjustment. A clean section 256 analysis with a written allocation agreement defeats this on the spot. The absence of either invites trouble.

Non-arm's-length contracts

OMMITC excludes expenditures incurred under a contract with a person or partnership with whom the corporation does not deal at arm's length at the time the expenditure was incurred. This catches related-party transactions — for example, where the corporation buys equipment from a sister company that imported it — and is intended to prevent rate-shifting between associated entities. If your supply chain runs through a related-party intermediary, structure the acquisition to flow directly from the arm's-length vendor where possible.

Available-for-use timing

Claiming OMMITC in the year of acquisition rather than the year of available-for-use is a recurring error, particularly on long-installation equipment ordered late in the year. The credit follows the federal CCA timing — if the equipment isn't ready for service by year-end, the OMMITC claim shifts to the next year.

Worked example: an Ontario CCPC manufacturer

Let's run a typical mid-size Ontario manufacturer through the OMMITC math.

Scenario: An Ontario CCPC fabricator of automotive components, head office and plant in Oshawa. Fiscal year ending December 31, 2025. The corporation acquired and brought into service a new robotic welding line: equipment cost $6,800,000 (Class 53), available for use August 1, 2025. It also acquired and brought into service a 40,000 sq ft expansion to its existing plant: building cost $9,200,000 (Class 1, 100% used for M&P), available for use November 15, 2025. Total eligible expenditures: $16,000,000. The corporation is not associated with any other corporation. Prior-year taxable income was $2.1M and the corporation has Ontario tax payable in the year.

Step 1 — Confirm CCPC status and Ontario PE. The corporation is a CCPC throughout the year, with its head office and plant in Ontario. The 15% refundable OMMITC applies (not the Expanded version).

Step 2 — Confirm the rate window. Both assets were acquired and became available for use after May 15, 2025, so the full $16M of expenditures is in the 15% rate window. No legacy 10% slice.

Step 3 — Apply the $20M cap. Total eligible expenditures of $16M are below the $20M cap. Full base flows to the credit calculation.

Step 4 — Calculate the credit. $16,000,000 × 15% = $2,400,000 refundable OMMITC.

Step 5 — Document and file. Schedule 572 attached to the 2025 T2, Schedule 8 entries showing the Class 53 and Class 1 additions, available-for-use evidence in the file, M&P floor space documentation for the building, invoice itemization for the welding line. The $2.4M refund follows from CRA roughly 4–6 months after filing, on top of any federal CCA depreciation benefit on the same assets — OMMITC does not reduce the federal CCA base.

Common mistakes that quietly cut the credit

Six errors account for the majority of OMMITC reductions and missed credits we see in practice.

• Capitalizing as a bundle instead of itemizing. Buying a complete production solution as a single line item from a vendor, then later discovering that 20% of the bundle was Class 50 computer hardware and 10% was Class 10 mobile equipment. The OMMITC on the non-Class-53 portion disappears.
• Missing the associated-group sharing rule. Filing separate Schedule 572s from each entity in a founder-controlled group, each claiming the full $20M cap. The reassessment denies all but one.
• Confusing acquisition date with available-for-use date. Claiming OMMITC in the year the equipment was ordered or paid for, when it didn't actually go into production until the following year. The credit moves with available-for-use, not with the cheque date.
• Failing the 90% M&P floor space test on buildings. Claiming the full building cost in Class 1 when only 80% of the floor space is used for M&P. The building is excluded entirely — not partially — once the 90% threshold is missed.
• Including non-arm's-length expenditures. Acquiring equipment through a related-party intermediary and treating the intermediary's invoice as the expenditure base. OMMITC excludes non-arm's-length expenditures outright.
• Triggering recapture by relocating within five years. Moving qualifying equipment to a U.S. plant or to a non-M&P role within five years of acquisition. The clawback is mechanical, prorated, and adds to Ontario tax payable in the year of the move.

Final thoughts

OMMITC is one of the cleanest credits Ontario has ever administered. The rate is generous — 15% refundable for CCPCs is a real cash incentive, not a tax-planning curiosity — the eligible-asset definitions are tied to federal CCA classes that practitioners already work with daily, and the filing mechanics are a single schedule on the T2. For an Ontario manufacturer planning capex in the 2026–2029 window before the program sunsets, OMMITC should be modelled into every major investment decision before commitment, not after.

The trap, almost always, is procedural: asset class allocation that wasn't itemized at the invoice level; associated-group sharing that was missed; available-for-use timing that pushed the credit into a different year than expected; or a five-year clawback that bit a relocation nobody connected back to OMMITC. None of these are conceptually difficult. They all reward discipline at the moment of acquisition rather than at the moment of filing.

For corporations that are already filing federal SR&ED, the Ontario Innovation Tax Credit, and the Ontario R&D Tax Credit, OMMITC is a natural addition to the provincial filing package. For corporations that have not previously claimed provincial credits, OMMITC is often the entry point. Either way, the program is rolling, the cap is large, and the rate is higher than anything else Ontario currently offers a CCPC manufacturer.

For a side-by-side view of 81+ Canadian funding programs we work on — including OMMITC, the OITC, the ORDTC, the federal SR&ED program, the federal Clean Technology ITC, and other provincial credits — see the full program list.