Since 2022, the federal government has introduced a range of Clean Economy investment tax credits (ITCs) to incentivize the switch to green technologies across Canada. With the passing of Bills C-59 and C-69 on June 20, 2024, the legislation for four of these proposed ITCs has now received royal assent.
Through these tax credits, the government aims to support innovation, attract investment and create jobs by making approximately $93 billion in federal incentives available by 2034–35. Here’s what you need to know about the new Clean Economy ITCs in 2024 and beyond:
Canada’s New Clean Economy Investment Tax Credits
Clean Technology (CT) ITC – This refundable tax credit supports investments in specified clean technologies within Canada made between March 28, 2023, and December 31, 2034. Eligible technologies include wind turbines, solar panels, hydroelectric and geothermal equipment, stationary electrical energy storage, small modular nuclear reactors, low-carbon heating systems, and non-road zero-emission vehicles. The Clean Technology ITC rate may be up to 30% of the capital cost of the eligible property and can be claimed by either a taxable Canadian corporation or a real estate investment mutual fund trust.

Carbon Capture, Utilization, and Storage (CCUS) ITC – Available to taxable Canadian corporations for qualified CCUS projects that incur eligible expenses between January 1, 2022, and December 31, 2040. This refundable credit applies to the acquisition of property that captures, transports, stores or utilizes CO2 emissions. To qualify for the credit, at least 10% of the captured carbon must either be stored in dedicated geological storage or used in the production of concrete in a manner that sequesters the CO2. Other uses, like enhanced oil recovery, do not qualify for the credit. Different ITC rates apply depending on the type and date of the CCUS project. Expenditures related to the direct capture of carbon from ambient air will receive the highest rate of 60% (when the expense is incurred before 2030).
Clean Technology Manufacturing (CTM) ITC – Companies that invest in machinery and equipment to manufacture and process clean technology may be eligible to claim this refundable tax credit. Qualifying companies can claim 30% of the cost of eligible investments and activities, including the extraction, processing or recycling of critical minerals that are essential for clean technology supply chains. The tax credit is available from January 1, 2024, to December 31, 2034.
Clean Hydrogen (CH) ITC – This refundable tax credit applies to eligible clean hydrogen property that is acquired and becomes available for use between March 27, 2023 and December 31, 2035. Eligible investments include equipment and technology that is necessary for the production, storage, and transportation of clean hydrogen. The ITC rate varies between 15 to 40 percent, depending on the carbon intensity of the hydrogen production. Projects that result in the lowest carbon footprint are rewarded with higher credit rates, incentivizing the pursuit of the cleanest hydrogen production methods.

The administration of these Clean Economy ITCs is a joint effort between Natural Resources Canada (NRCan) and the Canada Revenue Agency (CRA). NRCan provides guidance on qualifying technologies, while the CRA handles the assessment and issuance of the credits.
It’s important to note that businesses must meet certain prevailing wage and apprenticeship requirements to be eligible for the full Clean Economy ITC rates. Failure to elect or comply with these labour requirements will result in a 10% reduction in the available ITC rate.
The Clean Technology ITC and the Carbon Capture, Utilization, and Storage ITC are now open for applications, while eligible businesses should be able to apply for the Clean Technology Manufacturing ITC and the Clean Hydrogen ITC this fall. A Clean Electricity ITC and an Electric Vehicle Supply Chain ITC are also in the works, with more details to follow over the coming months.
Final Thoughts
The new Clean Economy ITCs are more than just a tax incentive; they are a commitment to a cleaner, more sustainable future for all Canadians. By leveraging these credits, your business can play a pivotal role in this transition, reaping financial rewards while supporting the broader economic and environmental objectives.
To maximize the benefits of these ITCs, it is crucial to understand how they work, from the eligibility criteria to calculating the rates. For further details, please refer to the CRA’s official resources or reach out to your partner contact at NVS.
This article was written by the NVS Professional Corporation team, your knowledgeable Barrie and Markham accountants. The content is intended as a general guide for informational purposes only. For specialist advice tailored to your specific situation, please reach out to our expert team.