Administered by Government of Canada · Last verified: July 2026
Federal tax rate reduction for Canadian corporations earning income from manufacturing and processing in Canada. Effective rate drops from 15% to 9% on qualifying income.
You claim this on your tax return, so the money comes back as a lower tax bill or a refund after you file. If you missed it in a past year, you can often still recover it by adjusting a prior return.
Take the 3-minute quiz to find out, and see every other Canadian program you qualify for at the same time.
Check my eligibilityManufacturing and Processing Profits Deduction is generally open to incorporated businesses, in any province or territory, in Manufacturing. Confirm the full criteria on the official program page before applying.
The estimated value is 6% federal tax savings on M&P income. The actual amount depends on your eligible costs, the program's budget, and approval.
Claimed on a return, so a missed year can usually be recovered by amending. How far back depends on whether you file personally or as a corporation; confirm the eligible years with your accountant.
1. Identify portion of corporate income from M&P activities 2. Allocate labour and capital between M&P and non-M&P 3. Complete Schedule 27 4. Apply reduced rate on qualifying income
Annual: claim with T2 return.