To encourage certain types of investments, the Canadian government has created several tax credits aimed at specific sectors of the economy. While their scope and rates vary, they are generally grouped together as Investment Tax Credits. Here is a list of the main credits and who is eligible to claim them.

Scientific Research and Experimental Development

Since 2013, the Scientific Research and Experimental Development ITC represents 15 percent of all qualifying expenditures. In general, a qualifying expenditure is an amount spent on SR&ED in Canada. It can also be a payment made to a third party to conduct SR&ED on your behalf. However, in this situation, only 80 percent of the expenditure will qualify for the ITC.

Mineral Exploration Tax Credit

The Mineral Exploration Tax Credit is designed to assist start-up mining companies raise capital. If you own shares of such a company, known as flow-through shares, you may be able to claim a credit of 15 percent of the qualifying expenses incurred by the company. In general, qualifying expenses are those made during the year of preliminary exploration above ground level and they must be renounced by the company in order to flow-through to the shareholders.

Apprenticeship Job Creation Tax Credit

The Apprenticeship Job Creation Tax Credit can reach up to $2,000 per year and is equal to 10 percent of the salary paid to an eligible apprentice for the first two years of the apprenticeship. Eligible apprentices are those who work in prescribed fields, including most traditional and manual trades, such as construction workers, bakers and painters. The apprenticeship must be registered with the appropriate provincial authority that supervises the trade and must lead to certification of the apprentice.

Investment Tax Credit for Child Care Spaces

The ITC for Child Care Spaces can be claimed if you are an employer and have invested in the creation of child care spaces for either your employees, or a mix of your employees and the local community. The credit is equal to 25 percent of the cost of creating the spaces with a maximum credit of $10,000 per space created.

Atlantic Investment Tax Credit

You can claim this ITC if you have purchased new buildings, machinery and equipment that will be used in farming, fishing, logging, manufacturing and processing in the Atlantic region of Canada. The credit is equal to 10 percent of the value of the property. For the purposes of the ITC, the Atlantic region is defined as the provinces of Newfoundland, Nova Scotia, Prince Edward Island, New Brunswick, and the Gaspé Peninsula region of the province of Quebec.

Claiming Your Investment Tax Credits

To calculate and claim your ITCs, fill out Form T2038(IND), Investment Tax Credit (Individuals). As a rule, unused portions of ITCs can be carried back three years and carried forward up to twenty years.