Clean Technology (CT) Investment Tax Credit (ITC)
Canada
Offer up to 30% refundable credit for capital investments in new clean technologies in Canada
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|openingDateMarch 28, 2023
- grant_single|closingDateDecember 31, 2033
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- grant_single|allIndustries
grant_single|grantors
- Canada Revenue Agency (CRA)
- Natural Resources Canada (NRCAN)
grant_single|status
grant_card_status|open
grant_single_labels|preview
The Clean Technology Investment Tax Credit (CII) is a refundable tax credit that offers up to 30% for capital invested in adopting and operating new clean technology assets in Canada between March 28, 2023, and December 31, 2034. Eligible activities include investments in equipment for solar, wind, and hydroelectric power generation, energy storage, geothermal systems, and zero-emission non-road vehicles.
grant_single_labels|projects
The eligibility for the credit does not explicitly depend on specific geographical areas but is available to qualifying entities across Canada.
- Canadian provinces and territories.
- Regions where the qualifying entities are conducting business activities in Canada.
grant_single_labels|admissibility
Eligibility for the Clean Technology Investment Tax Credit (CII) is determined by specific requirements related to the type of entity applying and their involvement with clean technology assets.
- The applicant must be a taxable Canadian corporation, including those that are a member of a partnership.
- The applicant can be a mutual fund trust that qualifies as a real estate investment trust, including such trusts that are members of a partnership.
- Applicants must ensure compliance with other labor-related requirements to avoid reduced tax credit rates.
grant_eligibility_criteria|who_can_apply
To apply for the CII for clean technologies, you must be:1. A taxable Canadian corporation (including a taxable Canadian corporation that is a member of a partnership).2. An investment trust mutual fund that is a real estate investment trust (including such a trust that is a member of a partnership).Additionally, you must:- Opt to meet labor requirements to avoid the reduced tax credit rate.
grant_eligibility_criteria|who_cannot_apply
This grant excludes certain entities based on their eligibility as outlined for companies or trusts that do not qualify under the specified criteria. The focus is to ensure compliance with the definitions of taxable Canadian corporations or qualifying mutual fund trusts.
- Non-Canadian corporations or entities without taxable status in Canada.
- Entities that are not mutual fund trusts structured as real estate investment trusts.
- Non-taxable organizations, including non-profits or government bodies.
grant_eligibility_criteria|zone
The grant is available for investments in Canada in certain provinces and territories where the eligible clean technology properties are located.
- Canadian taxable corporations
- Mutual fund trusts that are real estate investment trusts
grant_single_labels|register
Here are the steps to apply for the Crédit d'impôt à l'investissement (CII) pour les technologies propres:
- Step 1: Verify Eligibility
- Ensure your organization is a taxable Canadian corporation or a mutual fund trust that qualifies as a real estate investment trust.
- Confirm that the investments are in eligible clean technology assets.
- Step 2: Gather Required Documentation
- Collect necessary financial records and details of capital investments made in clean technology.
- Prepare a summary of the clean technology investments and the CII claim calculation.
- Step 3: Prepare the Tax Return
- Calculate the CII for clean technologies to include in your corporate or trust income tax return (T2 or T3).
- Ensure to follow guidelines provided by the CRA for calculating and claiming the CII.
- Step 4: Submission of the Tax Return
- Submit your corporate or trust tax return by the due date including the CII claim.
- Attach additional documents as required by the CRA to substantiate the CII claim.
- Step 5: Address Labour Requirements
- Choose to meet labour requirements related to prevailing wages and apprenticeships to qualify for the regular credit rate.
- Understand the implications and responsibilities related to labour requirement compliance.
- Step 6: Await CRA Processing
- After submission, wait for the CRA to process the tax return and assess the CII claim.
- Be prepared to provide additional information if requested by the CRA.
grant_single_labels|otherInfo
The Investment Tax Credit (ITC) for Clean Technologies supports the adoption and use of specified clean technology assets in Canada from March 28, 2023, to December 31, 2034, for eligible businesses.
- Rate of the ITC can be up to 30% for assets available from March 28, 2023, to December 31, 2033.
- Rate of the ITC drops to 15% for assets available in 2034.
- Available to taxable Canadian corporations and certain types of trusts.
- Cannot be combined with other specific ITCs for the same asset, but multiple ITCs can be applied to the same project for different assets.
- Additional technical information and support can be obtained from Natural Resources Canada (NRCan).
Apply to this program
Boost Your Investments in Clean Technology with Tax Incentives
Designed to facilitate the adoption of clean technologies, the Investment Tax Credit for Clean Technologies (CII) in Canada offers refundable tax credits for investments made between March 28, 2023, and December 31, 2034. This initiative aims to encourage Canadian businesses to incorporate environmentally sustainable practices, making significant investments in the latest clean technology assets.
Understanding the Investment Tax Credit for Clean Technologies
The Investment Tax Credit for Clean Technologies (CII) is a pivotal initiative launched by the Canadian government, encouraging companies to invest in sustainable and clean technologies particularly revolutionary in reducing environmental footprints. Under this program, companies are incentivized to integrate advanced clean technologies by receiving substantial financial benefits. These benefits include a refundable tax credit that can cover up to 30 percent of the capital costs incurred for eligible clean technology assets acquired and operational between March 28, 2023, and December 31, 2033. This percentage drops to 15 percent for technology acquired and operational in 2034, illustrating a gradual phasing out, which urges immediate action to maximize tax benefits.
Eligibility for the CII is broad, yet specific; it extends to taxable Canadian corporations, including taxable Canadian corporate members of partnerships, and mutual fund trusts, specifically Real Estate Investment Trusts (REITs), among others. The initiative emphasizes economic growth aligned with environmental stewardship by providing an advantageous tax framework that encourages the use of eco-friendly technologies.
Importantly, the CII program aligns with other regional incentives such as the Atlantic Investment Tax Credit, encouraging cohesive development strategies across different regions in Canada. However, the program maintains clear guidelines that prohibit the double-counting of tax credits for the same physical asset, ensuring focused investment in diversified yet complementary clean technologies.
The credit is available for several types of clean technology properties, such as solar, wind, and hydroelectric power generation equipment, stationary electricity storage equipment operated without fossil fuels, active solar heating equipment, air and ground-source heat pumps, zero-emission off-road vehicles, and small modular nuclear reactors, among others.
To maximize the credit's advantage, applicants must adhere to specific compliance, labor, and reporting requirements. Businesses that willingly comply with labor criteria favor prevailing wages and apprenticeships can access regular tax credit rates, thus benefiting from complete reimbursement potentials. For those who fail to meet these labor standards, the tax credit rate experiences a reduction by 10 percentage points, illustrating the government's commitment to nurturing a skilled workforce alongside promoting clean technology.
The submission process for claiming the Investment Tax Credit is streamlined, requiring claimants to submit detailed applications through corporate or trust tax returns. Essential components include summarizing the clean technology assets, calculating the claimed tax credit, and corroborating adherence to labor standards.
Additionally, the program requires meticulous tracking of each asset's location, cost, and usage, ensuring consistent alignment with the tax credit regulations. Companies are encouraged to present a transparent overview of their technological investments, providing an analysis of expected economic and environmental impacts.
Overall, the CII offers a compelling pathway for Canadian companies striving to modernize their operations and align with global sustainability goals. By leveraging these tax incentives, businesses can reduce operational costs, foster innovation in clean technologies, and contribute significantly to Canada's overarching environmental targets. As the window to optimize these credits narrows post-2033, firms are motivated to act swiftly to capture the full spectrum of benefits intended by this transformative policy.
