Introduction
As countries worldwide push toward net-zero emissions by 2050, Canada is taking bold action to support businesses investing in clean energy and sustainable technologies. The federal government has launched six major Clean Economy Investment Tax Credits (ITCs), representing $93 billion in incentives by 2034–35, to spur investment, create jobs, and strengthen Canada’s position in the global clean economy【NRCan, June 21, 2024】.
With the passing of Bill C-59 and Bill C-69, businesses can now apply for some of these tax credits, while others will become available later this year.
At Looknauth CPA Professional Corporation, we specialize in helping businesses navigate these tax credits, ensuring maximum eligibility and financial benefits while staying compliant with Canada Revenue Agency (CRA) requirements.
Why These Clean Economy ITCs Matter
A recent KPMG Business Survey – Federal Budget 2024 Edition found that 83% of small to medium-sized businesses are looking for additional incentives to help them decarbonize. Many businesses lack the capital to invest in clean energy, making these refundable tax credits a critical financial tool to support sustainable growth【KPMG】.
Understanding which tax credits apply to your business, how to claim them, and the project validation requirements is essential for securing government funding.
Which Clean Economy ITCs Can Benefit Your Business?
1. Clean Technology ITC – Refundable up to 30%
✅ Who Qualifies?
- Taxable Canadian corporations, including those in partnerships.
- Real Estate Investment Trusts (REITs).
✅ Eligible Investments:
- Renewable energy systems: Solar, wind, geothermal, nuclear, and waste biomass.
- Stationary electricity storage (non-fossil fuel).
- Low-carbon heating systems, such as heat pumps.
- Zero-emission non-road vehicles and related charging/refueling equipment.
✅ Timeframe:
- Applies to investments made between March 28, 2023, and December 31, 2034.
✅ Status: Enacted – Businesses can claim this credit now【CRA】.
3. Clean Technology Manufacturing ITC – Refundable up to 30%
✅ Who Qualifies?
- Taxable Canadian corporations, including partnerships.
✅ Eligible Investments:
- Machinery and equipment used in:
- Zero-emission technology manufacturing.
- Extraction, processing, and recycling of critical minerals
- Renewable energy conversion/storage equipment production.
✅ Timeframe:
- Applies to investments made between December 31, 2023, and 2035.
✅ Status: Enacted – Businesses can claim this credit now【NRCan】.
Clean Hydrogen ITC – Refundable up to 40%
✅ Who Qualifies?
- Taxable Canadian corporations.
✅ Eligible Investments:
- Equipment and facilities used for hydrogen production.
- Hydrogen-to-ammonia conversion equipment for transport.
✅ Timeframe:
- Applies to projects beginning construction after March 27, 2023.
✅ Status: Businesses can claim this credit now【CRA】.
Clean Electricity ITC – Refundable up to 15%
✅ Who Qualifies?
- Taxable Canadian corporations (including partnerships).
- Crown corporations, municipal corporations, and Indigenous-owned businesses.
- Pension investment corporations.
✅ Eligible Investments:
- New or refurbished renewable energy projects (solar, wind, nuclear, geothermal, and waste biomass).
- Natural gas energy systems.
- Interprovincial electricity transmission.
✅ Timeframe:
- Applies to projects that began construction after March 27, 2023, and before 2035.
✅ Status: Proposed
. Electric Vehicle (EV) Supply Chain ITC – Refundable up to 10%
✅ Who Qualifies?
- Only businesses eligible for the Clean Technology Manufacturing ITC.
✅ Eligible Investments:
Buildings and infrastructure for:
- EV assembly plants.
- EV battery production.
- Cathode active material production.
✅ Timeframe:
- Available for investments made between December 31, 2023, and 2035.
✅ Status: Proposed
How These ITCs Benefit Your Business
✔ Lower Capital Costs – Reduces the upfront cost of clean energy and manufacturing investments.
✔ Boosts Profitability – Sustainable investments improve long-term financial performance.
✔ Enhanced Competitiveness – Stay ahead in an economy shifting toward net-zero emissions.
✔ Additional Funding – Many ITCs stack with provincial tax incentives and grants, further increasing financial benefits.
How Looknauth CPA Can Help You Maximize These Tax Credits
At Looknauth CPA Professional Corporation, we can assist in:
✅ Determining eligibility for clean energy tax credits.
✅ Developing tax-efficient investment strategies for clean energy adoption.
✅ Ensuring full compliance with CRA filing requirements.
With billions in government incentives available, businesses that act now can secure funding, reduce tax burdens, and increase long-term profitability.
📞 Contact Looknauth CPA today to explore how your business can leverage these clean economy tax credits!
Final Thoughts
Canada’s Clean Economy Investment Tax Credits represent a once-in-a-generation opportunity for businesses to transition toward sustainable operations while unlocking significant financial benefits. By understanding and leveraging these ITCs, businesses can lower costs, improve competitiveness, and contribute to a greener future.
At Looknauth CPA, we help businesses navigate complex tax regulations and maximize government incentives. Let’s work together to turn sustainability into a profitable investment for your company.
📞 Call us at 416-450-1549
📩 Email us at info@looknauthcpa.com
