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Is your company eligible for the Manitoba Manufacturing Investment Tax Credit?

Investments in Manitoba’s manufacturing sector have been supported since 1992 by the 10% Manufacturing Investment Tax Credit. This program targets new manufacturing plants and equipment purchased for first-time use in manufacturing and processing in Manitoba.

NOTE: The Manufacturing Investment Tax Credit which was to expire on December 31, 2020 has been made a permanant credit. 

Who can participate?

Qualifying businesses include those that are:

  • Incorporated
  • Primarily engaged in manufacturing, according to the definition of manufacturing in the Income Tax Act (Canada).
  • Sell or lease their products to a lessee who is also primarily involved in manufacturing

Which capital investments are eligible?

To qualify for the tax credit:

  • Investments in qualified property (buildings, machinery and equipment) must be made between March 11, 1992 and December 31, 2020.
  • Qualified property must be used directly in manufacturing.
  • If the business has been leasing qualified property, and exercises an option to purchase it after March 8, 2005, the ‘used’ qualified property would be eligible.
Eligible Investments Date Acquired
   
New building March 11, 1992 – present date
New addition to building March 11, 1992 – present date
Used building March 9, 2005 – present date
New equipment & machinery March 11, 1992 – present date
New Class 43.1 equipment* April 22, 2003 – present date
Used equipment & machinery March 9, 2005 – present date

 *As per the federal Income Tax Regulations (Park XI), Class 43.1 includes (for a firm’s own consumption) equipment used to produce energy from renewable sources and equipment that uses energy more efficiently. Class 43.2 assets (previously classified as 43.1) will continue to qualify for the credit.

 

Corporations earn a 10% tax credit for eligible property acquired before April 11, 2017, or 9% tax credit for eligible property acquired after April 12, 2017. The credit can be applied against Manitoba corporate income tax payable in the year earned.

Unused credits are available for a ten-year carry-forward and a three-year carry-back (to taxation years ending after March 11, 1992 or after April 22, 2003 for Class 43.1 property).

The credit is partly refundable and partly non-refundable.

When the Manitoba PST decreased from 8% to 7% on July 1, 2019, the refundable portion of this credit also decreased from 8% to 7%. The non-refundable portion remains 1%.

How do you claim the credit?

The Canada Revenue Agency (CRA) administers this credit on behalf of the province. To learn more:

November 30, 2021

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