Ontario, Quebec Unveil Investment Incentives

The provincial governments of Ontario and Quebec have unveiled their 2023-2024 budgets, including expanded economic development incentives that also will be beneficial to real estate developers.

The Ontario government budget allocates $780M over three years for a new incentive for investment in manufacturing facilities and/or equipment—a 10% refundable corporate income tax credit, to a maximum of $20M, on qualifying costs of acquiring, constructing or renovating buildings and/or purchasing machinery or equipment used in manufacturing or processing.

Canadian-controlled private corporations with a fixed place of business in Ontario would be eligible. The tax credit applies to investments made as of what is known in Canada as “budget day,” March 21, 2023, REMI Network reported.

“This tax incentive would help local manufacturers invest and expand, creating good‐paying jobs and helping rebuild the economy,” the budget document states. “The government would undertake a review of the credit every three years. The review would evaluate the credit for effectiveness, compliance burden and administrative costs.”

Quebec has expanded what it calls a “tax holiday” on large investments of at least $100M. As of March 21, the maximum rebate on capital investment has increased for projects located outside Montreal and Quebec City and the program has been extended an extra five years, to Dec. 31, 2029.

Approved investors can receive tax exemptions on the completed project’s revenue and the employer’s contributions to Quebec’s Health Services Fund equivalent to 15%, 20% or 25% of the eligible capital costs of the project, to a maximum of $1 billion prorated over 10 years.

New incentives have been created in Quebec to help get obsolete industrial lands cleaned and spur investments in remote communities and those with hollowed out mainstay industries, including 26 specified territories of “low economic vitality” where a 25% investment rebate will be available; urban centers outside Greater Montreal and Quebec City will benefit from a 20% incentive, the report said.

The 2023-2024 budget allocates $11M over three years to support implementation of building information modelling (BIM). It also will spend $88M over six years to implement a provincial vision for architecture and land-use planning.

The initiative will provide funds to help municipalities with land-use planning exercises and to create a coordinating body for architecture in the province.

“Establishing a governance structure will promote the creation of a genuine culture of architectural quality in Québec. The main mandate of this governance structure will be to mobilize and obtain the support of stakeholders with respect to high-quality architecture,” Quebec’s budget document states.

“It will also need to gather data on architecture projects and monitor the integration and development of architectural quality in the government’s practices and actions. In addition, it will need to support research and innovation in architecture and promote Québec architecture,” the budget directed.