Ontario’s upcoming budget will include an expanded tax credit aimed at encouraging manufacturing in the province in the wake of a trade war with the U.S., Finance Minister Peter Bethlenfalvy said Monday.
“Our closest ally, the United States, has imposed tariffs on us that are challenging a relationship that was once considered unshakable. This is a challenge that none of us wanted, but we’re going to have to work together to overcome it,” Bethlenfalvy told reporters in Oakville.
The Ontario Made Manufacturing Investment Tax Credit was introduced in 2023. Bethlenfalvy said the changes would boost the credit rate from 10 per cent to 15 per cent for Canadian-controlled private corporations. They would also expand eligibility to non-Canadian-controlled private corporations in order to support their investments in Ontario.
Ontario’s manufacturing sector employs around 830,000 people, according to the province.
Bethlenfalvy said the tax credit will provide $1.3 billion over three years to companies investing in buildings, machinery and equipment that are used for manufacturing or processing in Ontario. A qualifying corporation could receive a tax credit of up to $3 million per year.
The move comes as Ontario looks to implement a suite of measures promised in the recent provincial election to combat tariff threats from U.S. President Donald Trump.
“This would be a major boost of confidence to the sector as it looks for certainty at a time when U.S. tariffs signal all but business as usual, and it would be a significant tool for businesses as they look for more ways to help keep their workers on the job,” Bethlenfalvy said.
Vic Fedeli, Ontario’s minister of economic development, job creation and trade, spoke alongside Bethlenfalvy Monday.
“Today’s announcement affirms that our government is doubling down on our plan to protect Ontario workers and businesses,” Fedeli said. “Now more than ever, it’s essential to build a stronger, more resilient, more competitive, more self-reliant Ontario.”
He noted that the province also recently began accepting applications for the Ontario Together Trade Fund, a $50 million fund to support Ontario companies impacted by trade disruptions.
Even as they announced measures to help Ontario’s economy through the trade war, the ministers were forced to answer questions about a new threat after U.S. President Donald Trump mused about the idea of imposing a tariff on films made abroad.
“There are many industries that are under attack, and we have to face reality that this is a policy choice coming out of south of the border,” Bethlenfalvy said.
He added that the province will be working closely with the newly elected federal government to combat the tariffs across all industries.
Fedeli noted that a tariff on foreign-made films could affect his own North Bay riding, where a number of Hallmark Christmas movies have been shot.
He said whatever the threat, Ontario will “suit up again for yet another assault.”
Bethlenfalvy is set to table Ontario’s latest budget at Queen’s Park on May 15, with the key theme expected to be bolstering Ontario’s economy against U.S. trade threats.
