Consultation on Defending Canadian Businesses Against Foreign Tax Credit Restrictions

Current Status: Open

Join In

In Budget 2023, the government committed to consult on the possibility to introduce reciprocal treatment in light of some eligibility conditions associated with certain tax credits under the U.S. Inflation Reduction Act. These consultations seek to ensure that Canadian businesses and their workers can thrive in the clean economy by informing potential measures that would respond to any potential protectionist practices that may arise in other countries' tax credits.

What is the focus of this consultation?

This consultation seeks views and feedback from Canadians and Canadian businesses on matching other countries' domestic content requirements for clean economy measures with similar restrictions for Canada's Clean Electricity Investment Tax Credit and Clean Technology Investment Tax Credit.

Key Questions for Consideration

1. Some countries have included domestic content requirements in their clean economy tax credits. Would it be appropriate for Canada in this instance to implement reciprocal measures for foreign companies doing business in Canada? If so, please:
1. Explain and provide details on the extent of the impact of foreign protectionist practices on Canadian businesses; and,
2. Indicate ways in which you think the federal government could best support Canadian businesses in the face of protectionist practices abroad.

2. Would you be in favour of introducing reciprocal treatment in Canada's Clean Electricity Investment Tax Credit and Clean Technology Investment Tax Credit?

   For instance, Canada could apply reciprocal treatment to goods from any country that either through explicit measures, such as content requirements, or implicit measures, such as unequal regulatory requirements, treats Canadian products differently from those produced in their domestic market.

   1. What would be the impact of such reciprocal treatment measures by Canada on Canadian business?
   2. Is this an appropriate approach to address the issue?
   3. Please identify known discriminatory measures in other countries, as well as impacts on Canadian business.
3. Are there any international trade considerations (e.g., impact on imports or exports, trade obligations) you would like to bring to our attention? Please provide details.

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

Contact Us

Submissions for this consultation will close on November 17, 2023.

Email us your comments and feedback at cleangrowthitc-ciicroissancepropre@fin.gc.ca with "Reciprocal Treatment" as the subject line.

Comments and feedback may also be sent by mail to:

Consultation on Defending Canadian Businesses Against Foreign Tax Credit Restrictions
c/o Business Income Tax Division
Tax Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa ON K1A 0G5

What's next?

Input received through this consultation will be considered alongside the analysis departmental officials are conducting as part of the ongoing work on the Clean Electricity Investment Tax Credit and Clean Technology Investment Tax Credit.

Privacy

Those providing submissions are asked to indicate clearly the name of the individual or the organization that should be identified as having made the submission:

1. Name of the organization
2. Contact person, with email address and telephone number
3. An indication as to whether the information provided in the submission is commercially sensitive
4. If you have a place of business in Canada, the following information:
   1. Location of head office; and,
   2. The sector in which you operate and the type of goods or services you provide.

Information received through this comment process is subject to the Access to Information Act and the Privacy Act. 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.

In order to respect privacy and confidentiality, please advise when providing your comments whether you:

• consent to the disclosure of your comments in whole or in part;
• request that your identity and any personal identifiers be removed prior to eventual publication; or
• wish that any portions of your comments be kept confidential (if so, clearly identify the confidential portions). 

Related links

• Fall Economic Statement 2022
• Budget 2023—A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future
• Government consults Canadians on Budget 2023 measures to grow the clean economy, close tax loopholes, and deliver tax relief for Canadians