Capital Investment Tax Credit Regulations
made under Section 49A of the
Income Tax Act
R.S.N.S. 1989, c. 217
O.I.C. 2016-168 (effective January 1, 2015), N.S. Reg. 137/2016
amended to O.I.C. 2024-185 (effective November 9, 2023), N.S. Reg. 109/2024
Table of Contents
Please note: this table of contents is provided for convenience of reference and does not form part of the regulations.
Click here to go to the text of the regulations.
Citation
Definitions
Approved projects
Eligible corporations
Eligibility certificate
Revocation of eligibility certificate
Reinstatement of eligibility certificate
Application for tax-credit certificate
Qualified property acquired in respect of an approved project
Records kept by eligible corporation
Citation
1 These regulations may be cited as the Capital Investment Tax Credit Regulations.
Definitions
2 (1) In these regulations,
“Act” means the Income Tax Act;
“available for use” means available for use as determined under either of the
following:
(i) subsection 13(27) of the Federal Act, without reference to paragraph
(c),
(ii) subsection 13(28) of the Federal Act, without reference to paragraph
(d);
“business plan”, in reference to a corporation, means the business plan submitted
with the corporation’s application for an eligibility certificate under clause 4(2)(b);
“effective date” means the date identified in a business plan as the earliest date that
qualified property in respect of the project is, or is expected to be, acquired;
“eligibility certificate” means a certificate issued under Section 5 in respect of an
eligible corporation that is determined to be eligible to apply for a tax-credit
certificate;
“NAICS Canada” means the North American Industry Classification System
(NAICS) Canada, as revised in 2012, published by Statistics Canada and
developed by the federal government and the governments of the United States of
America and Mexico for use in classifying business establishments for the purpose
of collecting, analyzing, and publishing statistical data related to the Canadian
business economy;
“project” means a single project of a corporation;
“revenue from government sources” means revenue received from a federal,
provincial or municipal government, including a crown corporation, agency, board
or tribunal, whether or not received under a contract for services;
“tax-credit certificate” means a tax-credit certificate issued under subsection
49A(6) of the Act.
(2) A reference in these regulations to the Minister of Finance and Treasury Board of
the Province includes a person designated by the Minister of Finance and Treasury
Board of the Province as referred to in subsections 49A(5), (6) and (12) of the Act.
(3) For the purposes of subclause 49A(1)(d)(ii) of the Act, property is considered
qualified property if it meets all of the criteria set out in the definition of “qualified
property” in subsection 127(9) of the Federal Act, except that the following is to be
substituted for paragraph (c) of that definition:
(c) to be used by the taxpayer in the Province primarily for the purpose of
(i) manufacturing aerospace products and parts to be used in space
transportation, falling under NAICS Canada industry 33641
(aerospace product and parts manufacturing), or
(ii) transporting freight, including satellites, by space vehicle into orbit,
falling under NAICS Canada industry 481214 (non-scheduled
chartered air transportation).
Approved projects
3 A project that satisfies all of the following conditions is an approved project:
(a) the aggregate of all amounts, each of which is the capital cost of qualified
property in respect of the project is, or is expected to be, not less than the
following:
(i) $5 million over a period of 24 months from the effective date,
(ii) $7.5 million over a period of 36 months from the effective date,
(iii) $10 million over a period of 48 months from the effective date,
(iv) $15 million over a period of 60 months from the effective date;
(b) less than 50% of the revenue from the project will be revenue from
government sources;
(c) the project is, in the opinion of the Minister of Finance and Treasury Board
of the Province, consistent with the Province’s priority of achieving
sustained economic development and growth through investments in
significant capital projects such as new technologies or expansions that
result in gains in innovation, productivity or competitiveness as well as
increased international trade.
Eligible corporations
4 A corporation that satisfies all of the following conditions is an eligible corporation:
(a) it is incorporated under the laws of Canada or a province of Canada and is a
taxable Canadian corporation;
(b) it has a permanent establishment in the Province;
(c) its principal activity does not fall within 1 of the following classes under
NAICS Canada:
(i) industry group 2111 (oil and gas extraction),
(ii) industry group 2212 (natural gas distribution),
(iii) sector 23 (construction),
(iv) industry group 3273 (cement and concrete product mixing),
(v) industry 32712 (clay building material and refractory manufacturing),
(vi) industry 32412 (asphalt paving, roofing and saturated materials
manufacturing),
(vii) sector 44–45 (retail trade),
(viii) industry 323113 (commercial screen printing),
(ix) industry 323114 (quick printing),
(x) industry 323115 (digital printing).
Eligibility certificate
5 (1) A corporation must apply for and receive an eligibility certificate before applying
for a tax-credit certificate.
(2) An application for an eligibility certificate must be in a form acceptable to the
Minister of Finance and Treasury Board of the Province, and include all of the
following:
(a) proof that the corporation is an eligible corporation and that its corporate
registration status is in good standing;
(b) a business plan containing, at a minimum, all of the following information:
(i) projected financial statements for the corporation for the taxation
years covering the duration of the project,
(ii) financial statements for the corporation’s preceding taxation year,
(iii) a description of the project’s expected outcomes, including the
impact on the economic development of the Province,
(iv) a list of each qualified property that will be acquired in respect of the
project, including:
(A) its estimated capital cost,
(B) the year it will be purchased, and
(C) the year it will be available for use,
(v) a statement outlining how the qualified property is necessary to
achieve the project’s expected outcomes;
(c) a statement signed by an authorized officer of the corporation giving
consent on behalf of the corporation to the Minister to publish all of the
following information:
(i) the name of the corporation,
(ii) the amount of the tax credit applied for,
(iii) the amount of the tax credit received;
(d) any information that the Minister requires in order to determine any of the
following:
(i) that the corporation is an eligible corporation,
(ii) that the project is an approved project,
(iii) that the corporation will be entitled to receive a tax-credit certificate
in accordance with Section 8.
(3) The Minister of Finance and Treasury Board of the Province must issue an
eligibility certificate to an eligible corporation if they are satisfied, based on the
information provided by the corporation, and any other information available to
them, that the corporation will be entitled to receive a tax-credit certificate in
accordance with Section 8.
(4) The decision of the Minister of Finance and Treasury Board of the Province to
issue or refuse to issue an eligibility certificate under subsection (3) is final.
Revocation of eligibility certificate
6 (1) An eligibility certificate is automatically revoked if a project fails to meet any of
the capital cost conditions in clause 3(a).
(2) The Minister of Finance and Treasury Board of the Province may, at any time after
an eligibility certificate has been issued, revoke the eligibility certificate in any of
the following circumstances:
(a) the corporation does not acquire the qualified property or have it available
for use in accordance with the timeline set out in their business plan;
(b) in the opinion of the Minister of Finance and Treasury Board of the
Province, the corporation’s total expenditures on qualified property in
respect of the project are no longer expected to meet the one of the capital
cost conditions in clause 3(a);
(c) in the opinion of the Minister of Finance and Treasury Board of the
Province, the corporation has not complied with any provision of the Act or
these regulations or the spirit and intent of the Act or these regulations;
(d) the Minister of Finance and Treasury Board of the Province determines that
the eligibility certificate was issued based on information or documentation
that is false or misleading, or has materially changed.
(3) An eligibility certificate revoked under this Section is void ab initio.
Reinstatement of eligibility certificate
7 (1) A corporation whose eligibility certificate is revoked under subsection 6(1) may
apply to have the certificate reinstated.
(2) The Minister of Finance and Treasury Board of the Province may reinstate a
corporation’s eligibility certificate if the corporation demonstrates, to the
satisfaction of the Minister of Finance and Treasury Board of the Province, that
there were circumstances beyond the corporation’s control that caused the project
to fail to meet the capital cost conditions in clause 3(a).
Application for tax-credit certificate
8 (1) An application for a tax-credit certificate for a taxation year must be made no later
than 18 months after the end of the taxation year in which the qualified property in
respect of which the tax-credit certificate is sought was acquired by the
corporation.
(2) An application for a tax-credit certificate for a taxation year must be in a form
acceptable to the Minister of Finance and Treasury Board of the Province, and
include any information and records the Minister of Finance and Treasury Board of
the Province requires to determine whether the criteria set out in the Act and
regulations for issuing the tax-credit certificate are met, including all of the
following:
(a) a copy of the corporation’s eligibility certificate for the approved project;
(b) the corporation’s T2 corporate tax return, including Schedule 31, and
financial statements for the taxation year immediately preceding the taxation
year for which the tax-credit certificate is sought;
(c) a draft of the corporation’s Schedule 31 to their T2 corporate tax return for
the taxation year, with a statement identifying which qualified property
shown on the schedule was acquired in respect of the approved project, and
reconciling the acquisition of the qualified property to its business plan;
(d) proof of the capital cost of each qualified property shown on the
corporation’s draft Schedule 31 to their T2 corporate tax return for the
taxation year;
(e) a statement showing the government assistance received, or expected to be
received, by the corporation that may reasonably be considered to relate to
the acquisition of the qualified property;
(f) a status report for the corporation’s approved project with an explanation for
any deviation from its business plan.
Qualified property acquired in respect of an approved project
9 (1) A qualified property acquired by a corporation is acquired in respect of an
approved project if it meets all of the following criteria:
(a) it is identified by property type and cost in the business plan;
(b) it is acquired and became available for use in the taxation year identified in
the business plan;
(c) its acquisition is necessary to achieve the outcomes identified in the
business plan.
(2) A qualified property acquired by a corporation is considered to be acquired in
respect of an approved project, despite subsection (1), if any of the following
circumstances apply, and the Minister of Finance and Treasury Board of the
Province is of the opinion that the difference is immaterial:
(a) the property differs from the description given in the business plan;
(b) the property was acquired or became available for use in a different year
than was identified in the business plan.
Records kept by eligible corporation
10 (1) An eligible corporation must keep records in the form required by the Minister of
Finance and Treasury Board of the Province, and containing any information that
the Minister of Finance and Treasury Board of the Province considers necessary to
determine that the eligible corporation is complying with the Act and these
regulations.
(2) An eligible corporation must keep the records required by subsection (1) at its head
office or at another place approved by the Minister of Finance and Treasury Board
of the Province.
The following regulations are not
yet in force and are not included in the current consolidation: