Capital Structuring Meets Execution: What May Brings for ITC Projects

LCAB Newsletter Issue 007 — May 2026

Capital structuring decisions made early in a project's lifecycle have lasting consequences for ITC compliance. How a project is financed — equity, debt, tax equity, or transferability — affects who bears the compliance obligation, how the ITC is claimed, and what documentation CRA will require at audit.

Tax Equity and ITC Transferability

Canada's ITC framework allows credits to be allocated within consolidated corporate groups. For project developers using tax equity structures or special purpose vehicles, understanding how the credit flows — and who must demonstrate prevailing wage and apprenticeship compliance — is critical to structuring the deal correctly.

Execution: Where Compliance Is Won or Lost

The ITC compliance obligation is triggered at the construction phase, not at financial close. Project developers who wait until construction is complete to think about prevailing wage documentation and apprenticeship ratios face significant retrofit challenges. LCAB recommends integrating compliance planning into EPC contract negotiations.

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