What’s in the 2026 Ontario Budget for You?

The new 2026 Ontario Budget was tabled last week. We read it for you and summarized the government funding programs listed in the budget below.

Funding for Equipment Purchasing & Upgrade

• Ontario Made Manufacturing Investment Tax Credit
  This 15% refundable tax credit provides qualifying corporations in annual support. It is designed to help companies offset the costs of eligible investments in buildings, machinery, and equipment used specifically for manufacturing or processing within the province.
• Accelerated Writeoff Measures for Capital Investments
  The government intends to lower the cost of capital investments by allowing businesses to accelerate the income tax deduction for the cost of depreciable assets. This measure would allow qualifying corporations to immediately write off 100% of the cost of manufacturing and processing machinery and equipment.
  

  • Status: Proposed and intended, subject to the passage of corresponding federal legislation.

• Advanced Manufacturing and Innovation Competitiveness (AMIC) Stream
  The AMIC stream provides financial support and tools to advanced manufacturers, primarily targeting small and medium-sized businesses . This program helps manufacturers invest in new equipment, technologies, and skills development. To date, the province has announced approximately $50 million in investments through this stream.
• Forest Sector Investment and Innovation Program (FSIIP)
  FSIIP provides financial support for capital investment projects that improve productivity and innovation in the forest sector. For example, the program recently provided funding to help businesses install automated finishing equipment and robotic material handling systems.

Funding for Artificial Intelligence

• Critical Technology Initiatives (CTI) Program
  The government is investing funds to renew the CTI program. This funding is specifically targeted at projects that accelerate the development, commercialization, and adoption of critical technologies, including AI, across key sectors such as advanced manufacturing, life sciences, automotive, and agriculture.

• Communitech’s AI Adoption Pilot
  To directly boost AI adoption among small and medium-sized enterprises (SMEs), the government is supporting a community-led pilot program launched by Communitech. This initiative helps businesses in sectors like defense, construction, manufacturing, and health care adopt practical AI solutions. It pairs businesses in the Waterloo Region with teams of postsecondary co-op students to identify high-value opportunities and deploy real AI-enabled workflows.

Funding for Regional Expansion

• Regional Opportunities Investment Tax Credit (ROITC)
  The ROITC was designed to support business investment in regions of the province that were lagging in employment growth between 2009 and 2019. Because it has successfully met its objectives, the government is proposing its expiration to focus on broader, province-wide tax supports. To ensure a smooth transition, eligible expenditures incurred on or before December 31, 2026, will still qualify for the credit.
  

  • Status: Proposed to expire effective January 1, 2027.

• Invest Ontario Fund
  Delivered through Invest Ontario, the province’s investment attraction agency, this fund offers financial support and tailored services to help businesses expand and to position Ontario as a top investment destination. To date, Invest Ontario has facilitated over $12.4 billion in investments, which are expected to create more than 11,300 jobs across the province.
• Rural Ontario Development (ROD) Program
  This initiative provides cost-shared funding to strengthen the economies of rural communities. It aims to help create and retain jobs, improve infrastructure, and support businesses to drive local economic growth and build strong rural communities.
• Northern Ontario Heritage Fund Corporation (NOHFC)
  The NOHFC provides targeted investments to support businesses and projects in Northern Ontario, such as a recently announced $1.4 million investment for five agriculture projects in the Clay Belt region. This funding helps businesses expand their operations, improve yields, create jobs, and stimulate broader economic growth in the North.

Funding for Software & Hardware

• Digitalization Competence Centre
  This program is specifically designed to help small businesses modernize their operations and drive business growth. It focuses on supporting the adoption of digital technologies, which directly encompasses new software and hardware implementations.
  

  • Status: Active, with a new $5 M investment allocated for 2026–27.

• Ontario Automotive Modernization Program (O-AMP)
  O-AMP is tailored to the province’s auto sector, supporting automotive parts suppliers and small- and medium-sized enterprises. The funding helps these businesses upgrade their equipment, adopt new tools, and modernize their production processes to remain competitive.