Clean Technology Manufacturing (CTM) Investment Tax Credit (ITC)
Canada
Incentivize Canadian companies to invest in clean technology
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|openingDateJanuary 01, 2024
- grant_single|closingDateDecember 31, 2034
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Mining, quarrying, and oil and gas extraction
- Manufacturing
grant_single|grantors
- Canada Revenue Agency (CRA)
grant_single|status
grant_card_status|open
grant_single_labels|preview
The Clean Technology Manufacturing (CTM) Investment Tax Credit (ITC) is a refundable tax credit aimed at encouraging capital investment in clean technology manufacturing, processing, and critical mineral extraction and processing in Canada from January 1, 2024, to December 31, 2034. Eligible activities include manufacturing and processing that utilize specific machinery and equipment, as well as the extraction and processing of critical minerals. The credit covers 30% of capital costs for qualifying assets, with phased reductions starting in 2032.
grant_single_labels|projects
Eligible projects or activities under the Clean Technology Manufacturing (CTM) Investment Tax Credit (ITC) include investments in capital assets for clean technology manufacturing and processing, as well as critical mineral extraction and processing.
- Manufacturing or processing of clean technology equipment such as industrial robots for electric vehicle production.
- Specialized machinery used for the extraction and processing of critical minerals such as copper and nickel.
- Industrial tools like molds for casting in foundries or cutting tools for solar cell manufacturing.
- Non-road electric vehicles and hydrogen-powered equipment used in manufacturing plants and mining operations.
grant_single_labels|admissibility
Eligibility for the Clean Technology Manufacturing Investment Tax Credit is determined by specific requirements related to the company's profile and the nature of its activities.
- The applicant must be a Canadian-controlled corporation subject to tax in Canada, including a tax-paying Canadian corporation that is a member of a partnership.
grant_eligibility_criteria|who_can_apply
To apply for the CTM ITC, you must be a taxable Canadian corporation (including a taxable Canadian corporation that is a member of a partnership).
grant_eligibility_criteria|who_cannot_apply
This grant application does not specify any explicit exclusions for companies or industries based on their status or main activity. Therefore, without additional contextual information, it is unclear which specific sectors or businesses might be ineligible.
grant_eligibility_criteria|eligible_expenses
The Clean Technology Manufacturing Investment Tax Credit (CTM ITC) aims to bolster economic activities centered on clean technology and critical mineral sectors. Eligible projects involve investments in manufacturing equipment, processing facilities, and related technologies.
- Acquisition of new machinery and equipment for manufacturing or processing.
- Installation of industrial robots used in electric vehicle manufacturing.
- Procurement of vats for processing cathode active materials.
- Procurement of specialized tools such as molds for copper ingot casting.
- Use of vehicles designed for manufacturing plants or mining sites.
grant_eligibility_criteria|zone
The grant includes eligible expenses related to the acquisition and utilization of clean technology manufacturing and processing, and critical mineral extraction and processing.
- Cost of acquiring eligible Clean Technology Manufacturing property used in qualified manufacturing, processing, or critical mineral extraction activities.
- Legal, accounting, engineering, or other fees incurred to acquire the property.
- Site preparation, delivery, installation, and testing costs to bring the property into use.
- Material, labor, and overhead costs reasonably attributable to property manufactured for own use.
grant_single_labels|register
Here are the steps to submit an application for the CTM ITC:
- Step 1: Determine Eligibility
- Ensure your corporation is a Canadian taxable entity.
- Verify that your capital investments qualify under the FTP-related eligible activities.
- Check that your assets meet the specified criteria for location, use, and inclusion in acceptable CCA categories.
- Step 2: Calculate the Tax Credit
- Determine the capital cost of the eligible assets by including all acquisition and setup costs and subtracting any relevant government assistance.
- Apply the appropriate ITC rate (30% for assets acquired from 2024 to 2031, 20% for 2032, 10% for 2033, and 5% for 2034) to the capital cost of the eligible assets.
- Step 3: Prepare the Corporate Tax Return
- Ensure all calculations regarding the CTM ITC are accurate and ready to be reported.
- Include the ITC claim in your corporate income tax return filing.
- Step 4: Submit the Tax Return
- File your corporate income tax return with the Canada Revenue Agency, ensuring it is complete and accurate.
- Ensure that your tax return is filed by the deadline to avoid penalties.
- Step 5: Compliance and Follow-Up
- Be prepared for CRA audit and compliance checks by having detailed records and documentation to support your ITC claim.
- Ensure all supporting documents are organized and retain them for a minimum of six years following your claim.
grant_single_labels|otherInfo
This grant encourages capital investment in clean technology manufacturing, processing, and critical mineral extraction in Canada. It provides a refundable tax credit for eligible activities from January 1, 2024, to December 31, 2034.
- The CTM ITC is administered by the Canada Revenue Agency (CRA).
- Changes to provisions may take effect retroactively as per proposed legislative changes.
- Companies cannot claim multiple Clean Economy ITCs for the same property but can for different properties within a project.
- The tax credit percentage decreases over the years: 30% until 2032, 20% in 2032, 10% in 2033, and 5% in 2034.
- Eligible taxpayers include Canadian corporations and members of partnerships which are Canadian taxable corporations.
- No workforce requirements currently apply to this tax credit.
- Eligible goods must be used exclusively in Canada and cannot be previously used or intended for any other purpose before the acquisition.
- Specific depreciation categories apply, including machinery, equipment, non-road vehicles, and specialized tools.
- If leased, certain rental terms and tenant eligibility requirements must be met.
- The capital cost of properties includes all costs incurred to get the property ready for use, less any government or non-government assistance received.
- Unpaid portions of capital costs as of 180 days after the fiscal year-end must be excluded from the capital costs but can be added back upon payment.
Apply to this program
Clean Technology Manufacturing Investment Tax Credit (CTM ITC)
The CTM ITC is a refundable tax credit aimed at fostering the investment of capital into clean technology manufacturing, processing, and critical mineral extraction sectors in Canada. This incentive is available from January 1, 2024, to December 31, 2034, aimed at promoting sustainable industrial growth and innovation.
Understanding the Details and Benefits of the Clean Technology Manufacturing ITC
The Clean Technology Manufacturing Investment Tax Credit (CTM ITC) represents a pivotal move by the Canadian federal government to stimulate growth within the clean technology and critical mineral sectors. Administered by the Canada Revenue Agency, this credit serves as a financial tool designed to encourage corporate investments in new qualifying clean technology properties across the nation. The program is not only vital for encouraging economic development in these sectors but also for supporting the transition towards a more sustainable and environmentally friendly economy, crucial for meeting the nation's climate objectives.
Primarily targeting Canadian tax-paying corporations, the CTM ITC is particularly significant for businesses investing in property that supports either clean technology manufacturing and processing or the extraction and processing of critical minerals. These include various industrial plants and machinery dedicated to producing technologies such as electric vehicles, solar panels, or renewable energy equipment. The eligible properties must be brand new, ensuring that the investments are contributing to the advancement and adoption of cutting-edge clean technologies.
The baseline rate for the CTM ITC is set at 30% of the capital cost of qualified properties, with a phased reduction to 20% in 2032, 10% in 2033, and finally to 5% by 2034. This tiered approach incentivizes earlier investments, aligning with the government's goal to expedite the transition to a low-carbon economy. Notably, businesses can claim this credit on their corporate income tax returns, simplifying the process of availing the benefits and ensuring that capital is returned efficiently to the companies.
A noteworthy aspect of the CTM ITC is that it excludes concurrent claims on similar initiatives for the same property — for instance, the Clean Hydrogen Investment Tax Credit or the Carbon Capture, Utilization, and Storage Credit, maintaining exclusivity of claims on specific properties. However, multiple credits can be pursued within a broader project if it involves different types of qualifying properties, allowing companies to optimize their overall project financing strategy.
Furthermore, the tax credit encompasses a comprehensive coverage of the capital cost, including legal, accounting, and engineering fees associated with acquiring the property, as well as costs tied to site preparation, delivery, installation, and testing. This extensive inclusion aims to ease the initial financial burden associated with significant technological upgrades and developments.
By interacting closely with the CRA's audit and compliance framework, corporations can ensure they adhere to the outlined criteria and avoid potential audits or penalties. The Credit serves not just as a financial incentive but also as a strategic initiative that underscores Canada's commitment to nurturing an innovative approach towards sustainable economic rejuvenation. Ultimately, the CTM ITC not only fosters economic incentives but also aligns corporate strategies with broader environmental goals, making it a cornerstone policy for future-oriented industrial progression in the Canadian economic landscape.
This structured approach ensures that Canadian industry leaders are well-equipped to handle both current economic demands and future challenges, aiding in establishing a resilient and sustainable industrial base. The CTM ITC thus stands as an instrumental program crafted to bridge the gap between policy and practice, enhancing Canada's global competitiveness in the clean technology domain.
In conclusion, the Clean Technology Manufacturing Investment Tax Credit is more than just a financial tool; it is a catalyst for transformation within the Canadian industrial landscape, promoting investment in clean technologies that promise not only economic benefits but also environmental stewardship. Businesses partaking in the CTM ITC not only gain financial advantages but also contribute to the broader goal of creating a sustainable and eco-friendly industrial future in Canada.
