Last Year: Ontario ROITC Investment Tax Credit—No Longer Accepted After December 31, 2026
If you have investments in plants, equipment, or machinery in certain Ontario regions—whether new purchases, expansions, or upgrades—a tax rebate program is nearing its deadline. The Ontario government confirmed in the 2026 budget:ROITC (Regional Opportunities Investment Tax Credit) will end on January 1, 2027Qualifying expenses incurred before December 31, 2026, are your last chance to use this program.
This isn't 'may be cancelled' or 'under review'—it's written in black and white in the budget. For businesses with actual investments in designated Ontario regions, 2026 is the last full year to file a claim.
What is ROITC?
ROITC (Regional Opportunities Investment Tax Credit) is a refundable investment tax credit introduced by the Ontario government in 2020 to encourage capital investment in regions with below-average employment growth. Simply put: if you buy equipment, build factories, or upgrade facilities in these regions, Ontario refunds you...10%of eligible expenses.
Unlike many tax credits that only offset tax payable, ROITC isRefundable—Meaning if your business doesn't turn a profit that year and has no tax to offset, the Ontario government will still refund the money to your account. For SMEs in expansion mode with tight cash flow, this is real cash back.
ROITC — Key Data
| project | Specific Content |
|---|---|
| Refund Rate | 10% of eligible expenses (refundable tax credit, not a deduction) |
| Annual Spending Cap | $500,000 per associated group per year |
| Annual Tax Refund Cap | Up to $50,000 per year ($500,000 × 10%) |
| End Date | January 1, 2027 |
| Final eligible expenditure date | December 31, 2026 |
| Launch Date | 2020 (Launched During the Pandemic) |
| Applicable Region | Designated areas in Ontario where employment growth is below the provincial average |
Which areas qualify for ROITC
ROITC covers areas in Ontario with slower employment growth. Key regions include:
- Southwestern Ontario：Bruce、Chatham-Kent、Elgin、Essex、Huron、Lambton
- Eastern Ontario：Frontenac、Hastings、Lanark、Leeds & Grenville、Lennox & Addington、Prescott & Russell、Stormont/Dundas/Glengarry
- Northern and Central Regions：Algoma、Cochrane、Kenora、Manitoulin、Muskoka、Nipissing、Parry Sound、Sudbury、Haliburton、Kawartha Lakes、Renfrew
- Select Suburbs：Peterborough、Grey
Note: Core GTA cities like Toronto, Markham, Richmond Hill, MississaugaNot covered by ROITCwithin. But if you have a factory, warehouse, farm, or processing facility in the suburbs of these cities—like a food processing line in Peterborough or a manufacturing workshop in Kawartha Lakes—you're likely within the eligibility zone.
Which Expenses Are Refundable
ROITC CoversCapital Investment— Not day-to-day operating expenses. Eligible expense types include:
- Purchase or construct factories, industrial buildings, or warehouse facilities
- Machinery and equipment procurement and installation
- Production line upgrades
- Eligible leasehold improvements
Key Point: Must BeActually incurred before December 31, 2026Expenses where a contract is signed but equipment hasn't arrived or construction hasn't started—these don't count. The transaction, equipment delivery, or construction must be completed by this date.
One more good news: small business tax rate is also dropping
The 2026 Ontario budget not only ended ROITC but also brought a positive: the Ontario small business tax rate will drop fromFrom 3.2% to 2.2%Effective July 1, 2026. Combined with the federal 9%, the combined small business tax rate will drop to11.2%— One of the lowest levels in recent years.
For businesses investing in ROITC regions: 2026 is both the last year to claim the 10% investment tax credit and the starting year for the small business tax rate reduction. From a tax planning perspective, this is a year that requires careful calculation.
Frequently Asked Questions
I signed an equipment purchase contract in December 2026, but the equipment won't arrive until January 2027. Can I still cancel?
No. ROITC requires expenses to be actually incurred before December 31, 2026. The determining factor is not the contract signing date, butEquipment Delivery and Installation Completion DateIf you haven't placed your order yet, the timeline is tight—only seven months left until year-end, and heavy equipment procurement and delivery typically take three to six months.
If my business leases a factory in a designated area, does renovation count as eligible expense?
Leasehold improvements generally qualify as eligible expenditures in most cases, but it depends on the nature of the improvements and the terms of the lease agreement. It's recommended to confirm eligibility before incurring the expense, rather than trying to fix it after a tax refund claim is rejected.
ROITC can be combined with federal SR&ED;Can R&D tax credits be stacked?
Yes. ROITC is an Ontario-level investment tax credit, SR&ED;Is a federal R&D tax credit. The two cover different expense categories—ROITC focuses on capital investments, SR&ED on&ED;Focuses on R&D labor and materials. The same expense cannot be claimed under both programs, but a single business can apply for both projects simultaneously. For businesses with manufacturing R&D activities, this is a high-value combination.
I received the ROITC in 2025, can I apply again in 2026?
Yes. ROITC is applied for annually, with independent $500,000 spending caps and $50,000 refund limits each year. 2026 is the final year—if you have ongoing investment plans in the designated area, you should identify all eligible expenses for that year and not miss any.
Last year — don’t let the opportunity slip away
ROITC isn't a regular 'available every year, apply anytime' program. It's a temporary incentive launched during the pandemic, and the government is now winding it down. For businesses with physical investments in designated Ontario regions, December 31, 2026, is a hard deadline.
What we can help you with isn't just filling forms — it's getting these things right before the deadline: confirm your region is eligible, list all capital expenditures from the past year and planned for this year, distinguish what qualifies and what doesn't, and plan the timeline to complete all eligible spending by December 31, 2026.
10% may not seem like much. The $50,000 annual cap may not seem large. But this is a straight tax refund—not a loan, no repayment required. It's the last year this window is open; miss it and it's gone.
Frequently Asked Questions
Q: If I sign a purchase contract in December 2026 but the equipment arrives in January 2027, can I still claim it?
No. ROITC requires that expenses actually occur by December 31, 2026, based on the date of equipment delivery and installation completion, not the contract signing date.
Q: Does renting a factory space for renovations count as eligible expenses?
Leasehold improvements are generally considered eligible expenses, but it depends on the nature of the improvements and the lease terms. We recommend confirming eligibility before spending.
Q: Can ROITC be combined with federal SR&ED?&ED;Can R&D tax credits be stacked?
Yes. ROITC is the Ontario Investment Tax Credit, SR&ED;It's federal R&D tax credits. You can't claim the same expense under both, but the same business can apply for both programs.
Q: If I already received ROITC in 2025, can I apply again in 2026?
Yes. ROITC is applied for separately each year, with an independent annual cap. 2026 is the last year, so you should compile all eligible expenses for the full year.
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