Tax Reduction for Zero-Emission Technology Manufacturing

Current Status: Open until June 18, 2021

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As more countries commit to achieving net-zero emissions by 2050, the demand for zero-emission technology will only grow. To create jobs and support the growth of clean technology manufacturing in Canada, Budget 2021 proposes to reduce — by half — the general corporate and small business income tax rates for businesses that manufacture zero-emission technologies. The proposed measure is described in detail in the Budget 2021 Annex entitled Tax Measures: Supplementary Information.

This consultation seeks views and feedback on the proposed allocation method for determining income eligible for the reduced tax rates on zero-emission technology manufacturing. Specifically, Budget 2021 proposes to determine income eligible for the reduced tax rates on zero-emission technology manufacturing based on the share of a taxpayers’ labour and capital costs used in eligible zero-emission technology manufacturing activities.

We also welcome any additional comments or feedback relevant to the scope of this consultation.

Who is the focus of this consultation?

Through this consultation, we want to hear from tax practitioners and members of the public. In submitting your comments, please include:

Participate through email

Due to COVID-19 public health considerations, email submissions are preferred. Send us your comments at ZETM-FTZE@canada.ca with “Zero-Emission Technology Manufacturing Consultation” as the subject line.

Should you wish to provide comments by mail, please direct your submission to the attention of the Tax Policy Branch.

What’s next?

We’ll be collecting your feedback and will consider your input alongside the analysis of departmental officials to help inform decisions on the proposed tax rate reductions for businesses that manufacture zero-emission technologies.

Information received through this comment process is subject to the Access to Information Act and the Privacy Act. Those providing comments are asked to indicate clearly the name of the individual or the organization that should be identified as having made the submission. In order to respect privacy and confidentiality, please advise when providing your comments whether you:

Should you indicate that your comments, or any portions thereof, be considered confidential, the Department of Finance will make all reasonable efforts to protect this information.

Related links

Budget 2021 Tax Measures: Supplementary Information Annex

Get in touch

ZETM-FTZE@canada.ca

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