Budget 2025: What Bill C-15 means for the Clean Economy Investment Tax Credits

Transcript

Slide 1 – Title Page

Hello – and thank you for your interest in the Clean Economy Investment tax credits. This video will highlight changes announced in Budget 2025 and what Bill C-15 means for the Clean Economy Investment Tax Credits

Slide 2 – Clean Economy Investment Tax Credits

Beginning in 2021, the federal government announced a series of refundable Clean Economy Investment Tax Credits, commonly referred to as ITCs. These ITCs are intended to incentivize early adoption and up-front investment in the clean economy as they provide businesses and other investors with the certainty they need to invest and build in Canada.

Advancing the clean energy transition with these investment incentives will benefit all Canadians and future generations by reducing negative climate impacts, creating jobs, and driving economic growth.

Slide 3 – What Bill C-15 means for the Clean Economy ITCs

Bill C‑15 implements key measures from the budget tabled in Parliament on November 4, 2025. It introduces the Clean Electricity ITC and enhances three of the previously enacted ITCs.

The amendments to those four credits apply retroactively.

Slide 4 – Clean Economy Investment Tax Credits

The Government of Canada has now legislated five Clean Economy ITCs, all of which can be claimed through the Canada Revenue Agency. The following credits are available:

• The Clean Technology ITC
• The Clean Technology Manufacturing ITC
• The Carbon Capture, Utilization, and Storage ITC
• The Clean Hydrogen ITC and
• The new Clean Electricity ITC

Slide 5 – Clean Electricity ITC

The Clean Electricity ITC is a refundable tax credit to accelerate the investments needed to expand Canada’s clean electricity grid.

The rate of the credit may be up to 15% of the capital cost of eligible clean electricity property.

This new ITC will be available, including retroactively, for property that is acquired and available for use on and after April 16, 2024, for projects that did not begin construction before March 28, 2023.

Budget 2025 broadens eligibility for the Clean Electricity ITC to include certain pension corporations, designated provincial and territorial Crown corporations, and certain corporations owned by municipalities or Aboriginal governments. It also extends eligibility to qualifying trusts and the Canada Infrastructure Bank.

Slide 6 – Administration of the Clean Electricity ITC

The Clean Electricity ITC is administered by the CRA and Natural Resources Canada, also known as NRCan.

The CRA provides the:

• Ability to claim the credit on a corporate income tax return or trust return
• The administration of the credit, and the CRA performs
• Audit and compliance activities

NRCan provides:

• Engineering and scientific guidance for clean electricity property.
• For qualified natural gas energy systems, NRCan provides
  • System evaluations and property verification,
  • Guidance on emission intensity reporting as well as verification and validation firm requirements, and NRCan
  • Reviews compliance reports

Slide 7 – The Clean Electricity ITC and the Canada Growth Fund

Bill C‑15 includes the Canada Growth Fund as an eligible entity for the Clean Electricity ITC. It also provides that financing from the Canada Growth Fund does not reduce the cost of eligible property when calculating the credit.

The Canada Growth Fund is a $15 billion independent investment fund that operates at arm’s length from the Government of Canada. The fund aims to build a financially prudent portfolio of investments in Canadian businesses and projects to help grow Canada’s economy. Its investment mandate is focused on efficient emission reduction projects, clean technology companies, low-carbon supply chains, and Canada’s natural resources.

Slide 8 – Carbon Capture, Utilization, and Storage ITC (Pre-budget)

The Carbon Capture, Utilization, & Storage, or “CCUS”, ITC is a refundable tax credit available for qualified CCUS expenditures related to carbon capture equipment using direct ambient air, other capture equipment, and qualified carbon transportation, storage, or usage equipment.

Prior to Budget 2025, the tax credit of up to 50% or 60% for direct air capture, that applies to eligible expenditures incurred for a qualified CCUS project, was set to be available from January 1, 2022, to December 31, 2030. 

Also prior to Budget 2025, for qualified CCUS expenditures incurred from 2031 to 2040, the ITC rate was up to 25%, or up to 30% for direct air capture.

Slide 9 – Carbon Capture, Utilization, and Storage ITC (C-15 updates)

Bill C-15 extends the availability of the full credit rates for the CCUS ITC by an additional five years. The credit rates will remain unchanged between 2035 and 2040.

The CCUS ITC will now apply to eligible expenditures incurred for a qualified CCUS project, from January 1, 2022, to December 31, 2035.

Then, for qualified CCUS expenditures incurred from 2036 to 2040, the ITC rate may be up to 25% or up to 30% for direct air capture.

Slide 10 – Clean Technology ITC (Pre-budget)

The Clean Technology ITC is a refundable tax credit of up to 30% of the capital invested in the adoption and operation of new clean technology property in Canada from March 28, 2023, to December 31, 2034.

For property acquired and available for use in 2034, the ITC rate may be up to 15%.

The Clean Technology ITC is for eligible clean technology property such as:

• Solar, wind, and water energy
• Stationary electricity storage equipment
• Solar heating equipment
• Non-road zero-emission vehicles
• Concentrated solar energy equipment
• Small modular nuclear reactors

Slide 11 – Clean Technology ITC (C-15 updates)

With Bill C-15, the changes for the Clean Technology ITC’s list of eligible clean technology property are:

• The replacement of “small modular nuclear reactors” with “small nuclear energy property” and
• The addition of “systems that produce electricity and/or heat from waste biomass

Slide 12 – Bill C-15 changes for the Clean Technology ITC

To recap the changes,

• Bill C-15 enhances the Clean Technology ITC by expanding eligibility requirements, which will apply retroactively
  • For systems developed as of November 21, 2023, the eligibility now includes systems that produce electricity and/or heat from waste biomass
  • For systems developed as of March 28, 2023, the eligibility requirements were revised for small nuclear energy property

Slide 13 – Clean Technology Manufacturing ITC (Pre-budget)

The Clean Technology Manufacturing, or “CTM” ITC provides a credit of 30% for investments in new machinery and equipment used to manufacture or process clean technologies and extract, process, or recycle critical minerals.

CTM properties generally fall in the following categories:

• Machinery and equipment used for manufacturing or processing
• Certain tangible property attached to buildings and other structures used for manufacturing or processing or that is required for machinery or equipment
• Certain specialized tooling
• Non-road vehicles and automotive equipment and
• Certain property used for mineral extraction and processing

Slide 14 – Clean Technology Manufacturing ITC (C-15 updates)

With Bill C-15, the Clean Technology Manufacturing ITC’s list of general categories of CTM property is expanded to include “eligible polymetallic mining projects” for “certain property used for mineral extraction and processing.”

Slide 15 – Qualifying materials for the Clean Technology Manufacturing ITC (Pre-budget)

Critical minerals eligible for the CTM credit include:

• Lithium
• Cobalt
• Nickel
• Copper
• Rare earth elements and
• Graphite

Slide 16 – Qualifying materials for the Clean Technology Manufacturing ITC (C-15 updates)

With Bill C-15, the following critical minerals are added to the CTM ITC’s list of qualifying materials:

• Antimony
• Indium
• Gallium
• Germanium and
• Scandium

Slide 17 – Bill C-15 changes to the Clean Technology Manufacturing ITC

To recap the changes,

• Bill C-15 expands the eligibility requirements, retroactively, for the Clean Technology Manufacturing ITC
• For projects developed as of January 1, 2024, the eligibility now includes qualifying equipment used in eligible polymetallic mining projects
• Budget 2025 also expands the list of critical minerals eligible for the credit to include antimony, indium, gallium, germanium, and scandium. This will support investments in the extraction, processing, and recycling of co-product and by-product critical minerals

Slide 18 – Questions?

If you have any questions about the Clean Electricity ITC or changes to a previously enacted credit, please don’t hesitate to reach out!

To reach us, please contact our Fraser Valley and Interior Tax Services Office weekdays from 8 am to 4 pm Pacific Time. This is a dedicated line that allows you to connect with Clean Economy specialists that have the tools, resources and knowledge base to answer your specific questions. If you’d like to learn more about the clean economy credits, you can visit our website at Canada.ca slash clean economy credits.

For up-to-date information on the Clean Economy program, including news, legislative updates, and information on upcoming webinars, scan the QR code to subscribe to our electronic mailing list.