Author: Katerina Ignatova

About Katerina Ignatova

Katerina Ignatova graduated from the University of Toronto’s Faculty of Law, having summered and articled at Fasken. Prior to joining Fasken, Katerina completed an internship at a legal technology start-up where she researched Canadian and US tax law issues. Katerina’s background has provided her with the analytical skills necessary to analyze and solve complex tax issues.

Analysis, Canada, Cross-border (Canada/US)

Clean technology investment tax credit

Close up calculator on business working desk, dark background concept.

On August 4, 2023, the Department of Finance (“Finance”) released draft legislation (the “August 4th Proposals”) in respect of the clean technology investment tax credit (“Clean Technology ITC”), which was initially proposed in the 2022 fall economic statement and updated in the 2023 federal budget (“Budget 2023”). The Clean Technology ITC allows qualifying taxpayers to claim up to a 30% refundable tax credit on the capital cost of clean technology property.

The draft legislation includes labour requirements, which are similar to provisions in the United States Inflation Reduction Act (which in turn references certain labour requirements in the United States Davis-Bacon Act) and that must be complied with to be eligible for the full 30% Clean Technology ITC.

Although Finance announced a clean hydrogen investment tax credit (“Clean Hydrogen ITC”) in Budget 2023, the August 4th Proposals did not include draft legislation regarding the Clean Hydrogen ITC.

The description of the Clean Technology ITC below is based on the draft legislation included in the August 4th Proposals.

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