Manitoba Manufacturing & Processing Tax Credits (2025 Guide)

Manitoba offers robust tax incentives for manufacturers and processors, designed to encourage capital investment, innovation, and business expansion in the province. Understanding how these credits work—and how they interact with federal programs—can significantly reduce your after-tax cost of upgrading equipment, expanding facilities, or modernizing operations. This guide details all major Manitoba manufacturing/processing credits, eligibility, and claim steps.

Key Manitoba Manufacturing & Processing Credits

Manufacturing Investment Tax Credit (MITC): A refundable and non-refundable credit for eligible expenditures on new or used buildings, machinery, and equipment acquired for use in manufacturing or processing in Manitoba.
Generally, the credit is equal to 8% of qualifying investments (7% refundable, 1% non-refundable), including purchases and capital leases.
- Eligibility: Incorporated businesses primarily engaged in manufacturing or processing goods in Manitoba. Assets must be used at least 90% in qualifying activities, and for a minimum holding period. Certain energy production, food processing, and value-added agriculture activities also qualify.
- Claim Process: File Manitoba Schedule 380 (T2SCH380) and the MB428/MB479 forms with your T2 corporate tax return. Documentation must include invoices, asset details, and proof of use/location. Unused credits may be carried forward 10 years, or back 3 years.
- Calculation Example: If you purchase $500,000 of eligible equipment, your MITC is $40,000 (7% refundable = $35,000; 1% non-refundable = $5,000). If your tax owing is less than the refundable portion, you receive a refund for the difference.
Accelerated Capital Cost Allowance (CCA): Many manufacturing assets also qualify for accelerated Capital Cost Allowance (CCA) rates, enabling faster tax write-offs. This can be combined with the MITC for greater tax savings.
- Eligibility: Applies to most new manufacturing and processing machinery/equipment.
- How to Claim: Claim on your federal and provincial T2 returns. Ensure asset class is correct (typically Class 53 or 43.1/43.2 for clean tech).
- Calculation Example: With a $200,000 asset, you could deduct up to 100% in the first year if eligible for full accelerated CCA.
Federal Stacking: The Manitoba MITC can be claimed in addition to federal credits (such as the Accelerated Investment Incentive or SR&ED, if applicable). Coordinate claims to maximize benefit and avoid double-counting.
- Scenario: You buy $300,000 in equipment. You can claim 8% MITC from Manitoba ($24,000), plus accelerated CCA federally—potentially deducting the full $300,000 in year 1 for federal/provincial tax, plus any applicable SR&ED credits if the asset is used for R&D.

How to Claim the MITC

Ensure your business is a corporation with eligible manufacturing/processing activity in Manitoba.
When acquiring qualifying assets, keep detailed records: description, cost, invoice date, intended use, and location in Manitoba.
Calculate your MITC using Schedule 380 and include with your MB428/MB479 and T2 return.
Attach all supporting documentation. Retain copies for audit purposes.
Unused non-refundable MITC can be carried forward up to 10 years, or back 3 years.
Consider combining with federal accelerated CCA and other incentives for optimal savings.

Tip: Consult a Manitoba tax professional for large capital investments or complex projects. Some assets may also qualify for PST exemptions or additional grants.

Stacking Manitoba Credits with Federal Programs

You can often combine Manitoba’s MITC and accelerated CCA with federal programs:

Federal SR&ED: If equipment is used for eligible R&D, claim both MITC and SR&ED on the same expenditures (be sure you do not double-count the same cost for both credits—allocate costs appropriately).
Clean Technology/CCA: If assets are green/clean tech, use accelerated CCA (Class 43.1/43.2) in addition to MITC.
Practical Example: A food processor purchases $250,000 of new production equipment. They claim $20,000 MITC (8%), deduct up to $250,000 with accelerated CCA, and may claim a portion of the cost as SR&ED if the equipment is used for experimental development.

FAQ: Manitoba Manufacturing Credits & Equipment Purchases

Does used equipment qualify for the MITC?

Yes, both new and used buildings, machinery, and equipment can qualify as long as the asset is primarily used for manufacturing/processing in Manitoba and meets all other eligibility criteria.

Can I claim MITC on leased equipment?

Yes, capital leases (but not operating leases) of qualifying equipment are eligible. Keep all lease agreements and proof of use in Manitoba.

What if my business operates in multiple provinces?

Only expenditures for assets primarily used in Manitoba and for Manitoba manufacturing/processing qualify for the MITC. Ensure you have supporting documentation for apportionment.

Is there a minimum investment amount?

There is no minimum, but the tax savings are most significant for larger capital investments. Ensure you keep all purchase and installation records regardless of the investment size.

Related Manitoba Credits & Resources

For more information, see Manitoba's official Business Tax Credits page or consult a tax professional familiar with manufacturing incentives.