Tax Incentives For Canada's Future Energy Visions

The past two federal budgets introduced various new refundable investment tax credits ("Refundable ITCs") to encourage and promote the increased adoption of alternative or renewable energy. In the words of the Federal Government, the "transformational new big five Clean Investment Tax Credit...will help produce, manufacture, or transition to clean energy in Canada, while supporting good jobs for the middle class and ensuring more vibrant communities across Canada".¹

Draft or final legislation is now catching up to the earlier proposals, with the most recent draft proposals released on December 18, 2023 and Bill C-59 making its way through Parliament for enactment.

At a high level, Refundable ITCs operate by deeming the relevant investment tax credit to be an amount of income tax paid by a taxpayer in a taxation year so that, if there are income taxes owing at the end of the taxation year, such income taxes would be offset against the credits and any excess