For workers: What you need to know about labour requirements for Clean Economy ITCs

An investment tax credit (ITC) is a government benefit. You may be working at a work site where a business is claiming a Clean Economy ITC for investing in a clean economy project or property.

For some of these Clean Economy ITCs, businesses must meet specific labour requirements if they want to receive the regular tax credit rate.

These requirements are meant to help make sure that:

Covered workers get prevailing wages
Apprentices have opportunities to gain work experience on clean economy projects

This page explains what these rules mean for you as a worker, and how to let the CRA know if you believe the rules are not being followed.

Introduction to Clean Economy ITCs

Clean Economy ITCs are refundable tax credits that eligible businesses can claim for investments that they make in Canada that support the transition to net-zero emissions.

For certain Clean Economy ITCs, the business must meet the labour requirements if it wants to claim the ITC at the regular (full) tax credit rate.

If the business chooses to claim the ITC at a reduced rate, it does not have to meet the labour requirements.

What the labour requirements are

There are 2 parts to the labour requirements:

Prevailing wage requirement
Covered workers must be paid at least the prevailing wage for their experience, tasks, and location of work.
Apprenticeship requirement
Businesses must make reasonable efforts to make sure that apprentices registered in Red Seal trades work at least 10% of the total hours of Red Seal workers on the property or project.

Prevailing wage requirements

The prevailing wage requirement states that employers must pay covered workers either:

According to the terms of an eligible collective agreement that applies to the worker
An amount at least equal to the wages and benefits according to the eligible collective agreement that most closely matches their experience, tasks, and location of work, if they are not directly covered under that agreement

In simple terms, if you are a covered worker, your pay must at least be equal to the pay of other workers in your area who do similar work and have similar experience, based on the relevant eligible collective agreement in your area.

Who is a covered worker

Generally, you are a covered worker under the prevailing wage requirement if:

You are doing manual or physical work in the preparation or installation of specified property at a designated work site
You are either of the following:
- An employee of a business that is claiming a Clean Economy ITC
- An employee of a contractor or sub-contractor hired by a business that is claiming a Clean Economy ITC

You are not a covered worker if you are either of the following:

An administrative, clerical, or executive employee
A business visitor to Canada

How do you know if the business is meeting the prevailing wage requirement

If you are working on the preparation or installation of specified property at a designated work site, the business should be:

Paying covered workers the prevailing wage

If you are covered by an eligible collective agreement, that means you are being paid according to the terms of that agreement for your trade, experience level, and region.

If you are not covered by an eligible collective agreement, you must still be paid an amount at least equal to the wages and benefits in the eligible collective agreement that most closely matches your experience, tasks, and location of work.
Communicating the prevailing wage requirement

The business claiming the ITC must also inform workers that it is following the prevailing wage requirements at its designated work site. It must either:
- Post a visible notice at the work site
- Send an electronic notice to workers
This communication should:
- Explain, in plain language, what the prevailing wage means for you
- Tell you how to report possible non-compliance with the prevailing wage requirements to the CRA

What is an eligible collective agreement in provinces and territories other than Quebec

An eligible collective agreement is:

The most recent multi-employer collective bargaining agreement negotiated with a trade union affiliated with Canada’s Building Trades Unions (CBTU) for a given trade in a region or province
A project labour agreement:
- Established with a trade union under applicable provincial law
- That covers the work associated with the investments for specified tax credits
- That provides for covered workers in a given trade, wages and benefits that are at least equal to the regular wages (without overtime) and benefits that covered workers receive under the relevant CBTU-affiliated multi-employer collective agreement

You can find the most recent multi-employer collective bargaining agreements through sources including the CBTU or trade unions that are affiliated with the CBTU.

Refer to: Canada’s Building Trades Unions

What is an eligible collective agreement in Quebec

In Quebec, an eligible collective agreement is a collective agreement negotiated in accordance with applicable provincial law.

Refer to: Collective agreements for Quebec

Apprenticeship requirements

The apprenticeship requirement states that businesses must make reasonable efforts to ensure that apprentices registered in a Red Seal trade work at least 10% of the total hours worked by Red Seal workers at the work site where the specified property is prepared or installed.

If a law or collective agreement limits the percentage of apprentices to less than 10%, businesses can still meet the apprenticeship requirement if they make reasonable efforts to ensure they achieve the highest possible percentage, without breaking other applicable rules.

Application of the labour requirements

The labour requirements apply when any preparation or installation of the specified property takes place on or after November 28, 2023.

The labour requirements do not apply:

When all the preparation and installation of the specified property is completed before November 28, 2023
For the installation of low carbon heat equipment

Consequences of failing to meet the labour requirements

This section explains what can happen if a business says it will meet the labour requirements to claim the regular (full) tax credit rate, but fails to do so.

If a business chooses to claim the ITC at the reduced rate, it does not have to meet the labour requirements.

Failure to meet the prevailing wage requirement

If a business elects to meet the labour requirements but covered workers are not paid the prevailing wage:

The business will have to pay an addition to tax, which the CRA calculates as a dollar amount for each day and for each covered worker who did not get the prevailing wage
The business may cause each affected covered worker to be paid a top-up amount, which is the difference between the pay the worker received and the prevailing wage, plus interest

In simple terms, if a covered worker is not paid the prevailing wage, the business will pay additional tax for each day it failed to meet the prevailing wage and may have to top up the worker’s pay (the shortfall plus interest).

Failure to meet the apprenticeship requirement

If a business elects to meet the labour requirements but does not meet the apprenticeship requirement, it will have to pay an addition to tax based on the number of hours that apprentices registered in a Red Seal trade should have worked but did not.

If you are interested in reading more technical details about the labour requirements, refer to: Avoiding the reduced tax credit rate for Clean Economy ITCs.

Reporting suspected non-compliance with the labour requirements to the CRA

If you believe that you are a covered worker, and you are not being paid the prevailing wage, or that a business is not meeting the labour requirements, you can report it to the CRA.

To learn more about reporting suspected non-compliance, refer to: Report suspected tax cheating in Canada.

When you send us a lead to report suspected non-compliance with the labour requirements, we will not ask you to disclose personal information about yourself. The protection of personal information is important, and the CRA is committed to protecting your identity.

The CRA uses the information that you provide to make sure that the Canadian tax system is fair and everyone pays their fair share.

Contact us

Contact the CRA if you have questions about the labour requirements.

Fraser Valley and Interior Tax Services Office

Telephone number

1-855-825-3262 (opens up phone application)1-855-825-3262

Hours

CRA’s Business Enquiries line hours
Day	Hours
Monday to Friday	8 am to 4 pm (PT)
Saturday and Sunday	Closed
Closed on public holidays

By mail

Canada Revenue Agency
Clean Economy Tax Incentives Division
9755 King George Blvd
Surrey BC V3T 5E1

By email

cleaneconomycpb-economiepropredgpo@cra-arc.gc.ca

If you do email us, do not share personal or confidential information such as your business information or your access code. These emails are not encrypted.

Page details

2026-03-31

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