Capital Investment Tax Credit (CITC)
Tax credit to encourage manufacturing, processing and tourism infrastructure companies to make capital investment in Alberta.
The second application intake for the CITC program is now closed. Applicants will be able to fill out and submit their applications through the online application portal during the next intake period. Dates for the third intake period will be shared once finalized.
Individuals who successfully submitted applications for the first or second intake periods can access their application through their user account.
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 provides a non-refundable tax credit valued at 10% of a corporation’s eligible capital expenditures, up to $5 million. The CITC encourages companies to make timely capital investments by returning a percentage of the company’s costs, including the purchase of machinery, equipment and buildings.
The CITC can only be claimed when the capital purchased is in use and the firm is earning profits and paying taxes.
The CITC is not sector specific and is available to companies across the province involved in the activities of manufacturing, processing and tourism infrastructure making an investment of $1 million or more.
To be eligible, a corporation must also:
- be incorporated, continued or registered in Alberta under the Business Corporations Act
- satisfy any conditions for eligibility set out in the
More information on eligible and ineligible business activities can be found in the CITC program guidelines (0.3 MB).
The eligible costs under this program include the purchase of machinery, equipment and buildings that closely align to capital costs allowed under the federal government’s Capital Cost Allowance.
Eligible Qualified Property – or 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 CITC program follows a competitive application process. Applicants are required to fill out and submit their applications through the online application portal during one of the application intake periods.
For more details on the type of information applicants will be required to provide as part of their application for Conditional Approval, please refer to the sample Conditional Approval Application Form (0.2 MB).
Step 1. Create a user account and log in through the online application portal
NOTE: A link to the portal will be available once the third intake opens.
Step 2. Fill out and submit an application for Conditional Approval
Applicants must fill out and submit their applications through the online application portal during one of the 3 application intake periods.
The second intake, which ran from July 17-Sept 8, 2017, is now closed.
NOTE: Applicants will be able to fill out and submit their applications through the online application portal during the next intake period. Dates for the third intake period will be shared once finalized.
As part of their submission, applicants are required to fill out and submit a Proposed Investment Plan Form and an Economic Impact Assessment Form. Both forms are available through the online application portal.
Applications will then be reviewed and Conditional Approval Letters as well as an approved investment plan will be issued to successful applicants based on eligibility and the investment’s economic impact to the province.
Step 3. Reporting on progress
Once the Conditional Approval Letter is issued, the corporation must provide a progress report every 180 days from the date of the Conditional Approval Letter until the investment is complete. The progress report must include:
- the status of the acquisition of the eligible qualified property listed in the corporation’s approved investment plan; and
- the status of what eligible qualified properties listed by the corporation in the approved investment plan are available for use
Forms for progress reporting will be available on the online application portal.
Step 4. Apply for the Tax Credit Certificate
Once the Eligible Qualified Property has been purchased and is available for use, the Corporation must submit an application for the Tax Credit Certificate.
As part of their application, applicants will be required to submit an updated a status report of the Approved Investment Plan as well as an updated Economic Impact Assessment.
Step 5. Receiving the Tax Credit
If an investment is completed in the manner described in the Approved Investment Plan and Economic Impact Assessment, the corporation will receive the full value of the tax credit as listed in the Conditional Approval Letter.
If the investment does not go ahead as detailed in the Approved Investment Plan and Economic Impact Assessment, the corporation may not receive the tax credit or the corporation may receive a reduced value of the tax credit.
Tax Credit Certificates will be issued once the department has completed its review.
After you apply
How applications will be evaluated
After determining eligibility, applications will be evaluated through a competitive process, with each application reviewed against the criteria outlined in the program guidelines (0.3 MB).
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
Individuals who successfully submitted applications for the first or second intake periods can access their application profile through their user account.
Additional program details
For more information on the CITC please refer to:
- Bill 30: Investing in a Diversified Alberta Economy Act
- CITC regulation (0.4 MB)
- CITC program guidelines (0.3 MB)