Is your company eligible for the Clean Economy ITC?

With no Trump executive order on day one cancelling solar, wind and other renewables incentives (yet) and with two US executive orders favouring "reliable energy" (oil, natural gas, coal, hydropower, biofuels, and nuclear energy) and critical minerals (...) it's time to focus back on Canada.

The Canadian parliament is currently prorogued; e.g. all legislative progress is on hold for the next few months. Amid this standstill, you might be wondering whether your organization can still take advantage of the Clean Economy Investment Tax Credits (ITCs).

TLDR: Four ITCs are available to taxable Canadian corporations. Non-taxable entities cannot currently claim any ITC.

The Clean Technology, Clean Hydrogen, Carbon Capture, Utilization, and Storage (CCUS), and Clean Technology Manufacturing ITCs are currently available to taxable Canadian corporations.

This allows companies to claim ITCs for investments in certain types of renewable electricity generation, clean hydrogen or ammonia production, CCUS, and the manufacturing of clean technology equipment or equipment to extract and process  critical mineral. However, eligibility is subject to additional restrictions, including the type of asset acquired, acquisition date, geography, and intended use.

Even with the announcements of the Fall Economic Statement; the Clean Electricity ITC won't be enacted before the next election. As a result, non-taxable entities—such as entities owned by municipalities or Indigenous communities, pension investment corporations, and provincial or territorial Crown corporations—are currently unable to claim any ITC directly.

If you have some questions about your organizations eligibility for any of the Clean Economy ITCs, please don’t hesitate to reach out or book time with us