Canadian ITC news: Finance to provide update on ITCs in "Fall" Economic Statement next Monday

After weeks of speculation, the Deputy Prime Minister and Minister of Finance Chrystia Freeland has finally set December 16 as the date of the release of the Fall Economic Statement. Yes, you read that right—the fall update will make its debut just days before winter starts.

We are expecting updates/legislation on the following ITCs:

• Clean Electricity Investment Tax Credit:

  • 15% refundable tax credit rate available to certain taxable and non-taxable corporations, including corporations owned by municipalities or Indigenous communities, and pension investment corporations, as well as provincial and territorial Crown corporations investing in that province or territory

  • Eligible investments in new equipment or refurbishments must be related to low-emitting electricity generation systems; or transmission of electricity between provinces and territories.

• Expansion of the Clean Technology Investment Tax Credit to include biomass:

  • 30% refundable tax credit rate available to certain taxable corporations

  • Eligible investments would include systems that produce electricity and/or heat from waste biomass

• These ITCs apply to property that is acquired and becomes available for use on or after the day of Budget 2024 (April 16, 2024) for projects that did not begin construction before March 28, 2023

The fundamental question about these new pieces of legislation is whether they can be passed before the next election. As a reminder, it took around seven months for the first wave of Clean Economy ITCs to receive Royal Assent. Your crystal ball is a good as ours on this one. While we patiently wait for the release of the Fall Economic Statement to understand the potential implications for current and future projects, four ITCs have already been enacted earlier this year, and the CRA is currently reviewing the first  Clean Economy ITC claims.

Please keep in mind that putting in place robust processes to collect data, audit it and evidence compliance will go a long way in protecting your ITC claim and accelerating the assessment by the CRA.

If you’d like to chat about the ITCs, please don’t hesitate to reach out or book time with us