Canada introduces some major investment tax credits for clean energy
Investment tax credits (ITC) for clean technologies and clean hydrogen introduced in the 2022 Fall Economic Statement will spur the transition to net-zero energy and enhance Canada’s competitiveness.
“What Canadian workers need is a government with a real, robust industrial policy; a government committed to investing in the net-zero transition, to bringing in new private investment, and to helping create good-paying jobs from coast-to-coast-to-coast,” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance.
Investments in renewable energy generation and storage, as well as low-carbon heating and zero-emission industrial vehicles, will be eligible for the 30% Canadian tax credit.
The tax credit is just the beginning of Canada’s response. A 2% tax on corporate stock buybacks was also proposed by the Canadian government to encourage corporations to reinvest their profits in their workers and businesses.
It is estimated that the tax will generate $1.5 billion over five years and will go into effect on January 1, 2023. By the end of the year, it will also launch a $15 billion growth fund to mitigate the risks private investors take when investing in new technologies and infrastructure.