Investment Tax Credits

This bulletin complements last week’s update on the Fall Economic Statement Implementation Act, 2023 (Bill C-59). In addition to the climate-related amendments to the Competition Act (read our earlier bulletin here), Bill C-59 implements significant clean economy investment tax credits (ITCs), for clean technology (CT) and carbon capture utilization and storage (CCUS), as well as clean hydrogen (CH) and clean technology manufacturing (CTM). This bulletin briefly summarizes the amendments to the Income Tax Act (the Act) and Income Tax Regulations (the Regulations) that implement the CT ITC and CCUS ITC. Clean Technology Investment Tax Credit. Bill C-59 amends the Act and Regulations to implement the CT ITC, initially proposed in the 2022 Fall Economic Statement and expanded in both the 2023 Fall Economic Statement (FES) and 2023 Budget (read our earlier bulletins here and here). Key provisions of the now implemented and expanded CT ITC include: refundable tax credit for capital invested in the adoption and operation of new clean technology property in Canada from March 28, 2023, to December 31, 2034; rate may be up to 30% of the capital cost of CT property that is acquired and that becomes available for use from March 28, 2023, to December 31, 2033; rate may be up to 15% for property acquired and that becomes available for use in 2034, and will be unavailable after 2034; available for investments in the following types of CT property: equipment used to generate electricity from solar, wind and water energy; stationary electricity storage equipment that does not use any fossil fuel in operation (such as batteries and pumped hydroelectric storage); active solar heating equipment, air-source heat pumps and ground-source heat pumps; non-road zero-emission vehicles and related charging and refueling equipment that is used primarily for such vehicles; equipment used exclusively for the purpose of…

The Fall Economic Statement Implementation Act, 2023 (Bill C-59) yesterday received royal assent, implementing (1) key climate-related “truth-in-advertising” amendments to the Competition Act and (2) two important investment tax credits (ITCs) for clean technology and carbon capture utilization and storage. Omnibus Bill C-59 was introduced in the House of Commons in November 2023 (and amended several times since then) to implement certain provisions of the Fall Economic Statement (FES) tabled in Parliament in November 2023 (see our earlier bulletin here) and certain provisions of the budget tabled in March 2023 (Budget 2023) (see our earlier bulletin here). This bulletin summarizes the climate-related amendments to the Competition Act. A subsequent bulletin will cover the ITCs. Deceptive marketing practices. Part VII.1 of the Competition Act sets out a number of deceptive marketing practices that are considered “reviewable conduct” under the legislation, and therefore subject to scrutiny by the Competition Tribunal and the courts and related administrative remedies. For example, section 74.01(1)(a) contains a general prohibition on representations to the public that are materially false or misleading, and made for the purpose of promoting the supply or use of a product or a business interest (directly or indirectly). Where the Competition Tribunal or a court determines that a corporation is engaging (or has engaged) in reviewable conduct, it may order the corporation: not to engage in the conduct or substantially similar reviewable conduct; to publish a notice providing a description of the reviewable conduct and related details; and to pay an administrative monetary penalty in an amount not exceeding the greater of $10M (and, for each subsequent order, $15M) and three times the value of the benefit derived from the deceptive conduct (or 3% of the corporation’s annual worldwide gross revenues, if such an amount cannot be reasonably determined). Bill C-59 amendments. The…

Canada Implements Clean Economy Investment Tax Credits

Climate-related Amendments to the Competition Act Become Law as Bill C-59 Receives Royal Assent