We’re happy to inform you that after nearly two years of legislative work the Federal government finally introduce four new Clean Economy Tax Credits. Tax credit applications are accepted with your corporate tax return – T2. If you already filed your return, you can file an amendment with your tax credit application.

The government reimburses between 30% and 40% of the following expenses, depending on the program. Here is what you need to know to determine if your business qualifies.

Clean Technology Tax Credit

Your business qualifies if you purchased the following after March 28, 2023:

  • Equipment used to generate electricity from solar, wind and water energy
  • Stationary electricity storage equipment that does not use any fossil fuel in operation (such as batteries and pumped hydroelectric storage)
  • Active solar heating equipment, air-source heat pumps and ground-source heat pumps
  • Non-road zero-emission vehicles and related charging and refueling equipment that is used primarily for such vehicles
  • Equipment used exclusively for the purpose of generating electrical energy or heat energy (or a combination of both), solely from geothermal energy, unless it is part of a system that extracts fossil fuels for sale
  • Concentrated solar energy equipment
  • Small modular nuclear reactors

Clean Technology Manufacturing Tax Credit

Your business qualifies if after January 1, 2024 your business starts or expands:

A) Manufacturing of any of the following clean tech equipment:

  • solar energy conversion equipment (including solar thermal collectors, photovoltaic solar arrays and custom supporting structures or frames, but excluding passive solar heating equipment)
  • wind energy conversion equipment (including wind turbine towers, nacelles and rotor blades)
  • water energy conversion equipment (including hydroelectric, water current, tidal and wave energy conversion equipment)
  • geothermal energy equipment
  • equipment for a ground source heat pump system
  • air-source heat pump equipment designed for space or water heating
  • electrical energy storage equipment used for storage of renewable energy or for providing grid-scale storage or other ancillary services (including battery, compressed air and flywheel storage systems)
  • equipment used to charge, or to dispense hydrogen to zero-emission vehicles
  • equipment used for the production of hydrogen by electrolysis of water
  • equipment that is a component of the above, if such equipment is purpose-built or designed exclusively to form an integral part of that equipment
  • zero-emission vehicle used to transport goods or parts within manufacturing facility
  • integral components of the powertrain of zero-emission vehicles, including batteries or fuel cells

B) Extraction of critical minerals

C) Processing of critical minerals

D) Production of the following clean fuels:

  • Hydrogen by electrolysis of water
  • Gaseous biofuel
  • Liquid biofuel
  • Solid biofuel

E) Conversion of conventional vehicles to zero-emission vehicles.

Eligible costs include purchasing industrial buildings, leasehold improvements and purchasing manufacturing or processing equipment to support production of the above eligible clean tech goods.

Clean Hydrogen Tax Credit

Your business qualifies if after March 27, 2023 your business starts or expands production of:

  • Clean hydrogen
  • Clean ammonia

Eligible costs include purchasing industrial buildings, leasehold improvements and purchasing manufacturing or processing equipment to support production of the above clean fuels.

Carbon Capture, Utilization and Storage Tax Credit

Your business qualifies is after January 1, 2022 you:

  • Captured CO2 that would otherwise be released into the atmosphere
  • Captured CO2 directly from the ambient air
  • Transported captured carbon
  • Storing or using captured carbon

Eligible costs include purchasing property for CO2 capturing and storing, CO2 capturing and transportation equipment.