Atlantic Investment Tax Credit

The Atlantic Investment Tax Credit (AITC) is a federal tax measure designed to encourage investment in certain key economic sectors. Available to both businesses and individuals, it reduces the real cost of projects carried out. Here's what you need to know to take advantage of this benefit.

Eligible Taxpayers

All taxpayers (individuals and corporations) are eligible for the ITC, provided they meet the eligibility criteria set out below.

The ITC is designed to support investment in eligible goods in the following sectors:

• Manufacturing and processing of goods for sale or hire;

• Farming;

• Fishing;

• Forestry;

• Grain storage;

• Peat harvesting.

This measure has been in place since 2012 and is designed to stimulate economic activity in the Atlantic region, including the Gaspé Peninsula, the Magdalen Islands, the Maritime provinces and Newfoundland and Labrador.

Eligible Goods

To be a qualifying asset for ITC purposes, the asset must :

• be new;

• be used primarily (+50%) in the Atlantic region;

• be used primarily (+50%) in one of the eligible sectors;

• be an asset that is either:

  • a building prescribed by regulation, acquired after 23 June 1975;

  • a machine or equipment prescribed by regulation, acquired after 23 June 1975;

  • an asset for energy production and conservation prescribed by regulation, acquired after 28 March 2012.

Lending Rates

The ITC is equal to 10% of the cost of eligible goods.

Good news: no minimum threshold is required! This means that every dollar invested can qualify for credit.

The credit first reduces the tax due for the year. If the credit exceeds the tax payable, 40% of the balance is refundable. The remainder of the credit can be carried back up to 3 years and forward up to 20 years.

This mechanism makes the CII particularly attractive for companies making major investments.

Administrative Procedures

The ITC must be claimed when the asset is ready for use and the expenditure must be paid within 180 days of the end of the relevant financial year. The credit is taxable in the following year, generally by reducing the capital cost of the asset. The claim must be filed within 18 months of the end of the tax year in which the property becomes ready for use, using form T2038(IND) for an individual or T2SCH31 for a corporation.

Bespoke Credit Solutions for Every Horizon

The ITC in the Atlantic region is an excellent opportunity for taxpayers to reduce the cost of their investment project, provided the project meets the eligibility criteria. However, since this credit can interact with other tax measures and subsidies, careful optimisation is essential. It's important to be well informed before making an application.

Planning an eligible investment? Contact our tax team to validate your eligibility and optimize your tax strategy.