Canada’s $20.9B Clean-Tech Boost with Investment Tax Credits

The Canadian clean technology sector is ready for a ground-breaking transformation. According to recent industry statistics, the demand for sustainable solutions in manufacturing is at an all-time high, with the environmental and clean technology sector experiencing growth over 21% for the past decade.

In response to this pressing need, the Canadian government has announced a $20.9B investment in clean technology to propel the manufacturing sector into a greener and more sustainable future. This substantial commitment is part of a five-year initiative.

Program Snapshot: Clean Technology Manufacturing ITC

This refundable clean tech ITC will cover 30% of costs in new machinery and equipment used to manufacture or process clean technology. The draft legislation published outlines what this includes:

• Renewable energy and electrical energy storage equipment, such as solar panels, wind turbines and battery storage;
• Nuclear energy equipment and processing/recycling of nuclear fuels;
• Zero-emission vehicles, their components (such as EV batteries) and charging/fueling infrastructure; and
• Equipment that reduces home energy bills, such as heat pumps.

Notably, the ITC extends to the extraction, processing, or recycling of critical minerals essential for manufacturing these clean technologies, such as lithium, cobalt, nickel, copper, rare earth elements, and graphite.

The draft legislation for this ITC is currently undergoing consultations, with plans to introduce it in Parliament in early 2024. If passed, the ITC will be effective from January 1, 2024.

As part of a broader strategy, this Manufacturing ITC is one of five tax credits introduced by the federal government to enhance competitiveness, achieve climate targets, and generate sustainable employment opportunities across Canada.

Accessing Existing Clean Tech Grants

In the Canadian government’s pursuit of sustainability and net-zero objectives, fostering environmentally conscious practices within businesses is paramount. Although adopting clean tech initiatives may present challenges and associated costs for enterprises, the Canadian government stands ready to bolster environmental projects through a range of grants.

Noteworthy among these initiatives are the Strategic Innovation Fund (SIF) and the Low Carbon Economy Fund, tailored to support endeavors aligned with sustainability goals. For comprehensive and current information on available funding opportunities, our Cleantech Funding Directory serves as a valuable resource.

In 2024, we expect to see many sustainability initiatives both from the government and businesses across Canada. Join our newsletter to stay updated on the latest sustainability initiatives within the grant space and align your upcoming projects with Canada’s net-zero goals.