The federal government has taken important steps to position Canada at the forefront of the fight against climate change and to seize the economic opportunities provided by the global transition to net-zero. Helping Canadian companies adopt clean technologies will create jobs, ensure Canadian businesses remain globally competitive, and reduce Canada’s emissions.
As committed to in the 2022 Fall Economic Statement, the Department of Finance is today launching consultations on:
- An investment tax credit for clean hydrogen based on the lifecycle carbon intensity of hydrogen, including:
- An appropriate carbon intensity-based system for the Canadian context; and,
- The level of support needed for different production pathways in Canada.
- Labour conditions attached to the investment tax credits for clean hydrogen and clean technologies, including requirements to:
- Pay prevailing wages based on local labour market conditions; and,
- Create apprenticeship training opportunities.
Stakeholders are invited to share their feedback until January 6, 2023.
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- The 2022 Fall Economic Statement proposed a refundable tax credit for clean hydrogen production investments that are made as of the day of Budget 2023, with the credit being phased out after 2030. The lowest carbon intensity tier that meets all eligibility requirements is proposed to receive an investment tax credit of at least 40 per cent.
- The 2022 Fall Economic Statement proposed a refundable tax credit of 30 per cent for clean technology investments made as of the day of Budget 2023, with a phase out starting in 2032, for investments in:
- Electricity Generation Systems, including solar photovoltaic, small modular nuclear reactors, concentrated solar, wind, and water (small hydro, run-of-river, wave, and tidal).
- Stationary Electricity Storage Systems that do not use fossil fuels in their operation, including but not limited to: batteries, flywheels, supercapacitors, magnetic energy storage, compressed air storage, pumped hydro storage, gravity energy storage, and thermal energy storage.
- Low-Carbon Heat Equipment, including active solar heating, air-source heat pumps, and ground-source heat pumps.
- Industrial zero-emission vehicles and related charging or refueling equipment, such as hydrogen or electric heavy duty equipment used in mining or construction.
- Both proposed tax credits will be reduced by 10 percentage points if a company does not meet certain labour conditions, to incentivize companies to support and create good jobs for the workers our economy relies on.