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Capital Investment Tax Credit (CITC)
As part of the Alberta Jobs Plan, the Alberta government has invested $70 million in a Capital Investment Tax Credit (CITC) for manufacturing, processing and tourism infrastructure that will spur economic diversification and job creation.
The CITC is a 2-year program that encourages manufacturing, processing, and tourism infrastructure companies to make capital investments in Alberta that will spur economic diversification and job creation. The CITC encourages companies to make timely investments by returning a percentage of the company’s costs, including the purchase of machinery, equipment, and buildings.
The CITC offers a 10% tax credit on capital expenditures, up to a maximum of $5 million per year.
- Maximum tax credit value: The maximum tax credit amount that may be granted to a corporation is $5 million per year.
- Minimum investment required: The total eligible investment value must equal or exceed $1 million per application, per business.
Fourth intake is open and accepting applications. Application deadline is February 13, 2019.
Alberta businesses conducting manufacturing, processing or tourism infrastructure activities are eligible to apply.
To be eligible, a corporation must:
- be incorporated, continued or registered in Alberta under the Business Corporations Act
- be involved in the business activities of manufacturing or processing goods for sale or lease.or be providing or operating tourism infrastructure in specific NAICS categories in Alberta for at least 120 consecutive days in a 12-month period
- be making a total program eligible investment value of at least $1 million
- satisfy any conditions for eligibility set out in the Investing in a Diversified Alberta Economy Act and the Alberta Capital Investment Tax Credit Regulation
- Purchase of machinery, equipment and buildings that closely align to capital costs allowed under the federal government’s Capital Cost Allowance.
- Eligible Qualified Property; a property/purchase that is eligible for a tax credit must be acquired by the eligible corporation to be used primarily for:
- manufacturing or processing of goods for sale or lease as defined in subsections 127(9) and (11) of the federal Income Tax Act, with the exclusion of Section 127(9)(b.1).
- providing or operating tourism infrastructure that, subject to the regulations, is property or in a class of property included in Schedule II of federal Income Tax Regulations.
The evaluation criteria based on categories such as:
- size of investment
- timeliness of investment
- employment impacts
- inclusion of under-represented people or groups
- modernization or productivity improvements
- new product or service development
- diversified customer base
- supply chain impacts
- environmental performance
- community impact
- regional impact
*The CITC can only be claimed when the capital purchased is in use and the firm is earning profits and paying taxes.
**Corporations must be at least 10% manufacturing.