Greg Johnson, Wesley Novotny and Brendan Sigalet write for the
Resource Sector Taxation journal on federal tax policies aimed at
reducing greenhouse gas emissions by incentivizing clean energy
technologies. The article reviews various proposed initiatives and
existing incentives, emphasizing their integration with current
legislation and the importance of providing certainty to businesses
making long-term investment decisions.
Part II of their article, Climate Change Initiatives: Selected
Recent Changes and the Application of Existing Tax Principles to
Clean Energy, focuses on the practical application of the
Clean Technology, Clean Hydrogen, Clean Technology Manufacturing
and Clean Electricity ITCs, many of which were enacted in 2024
through Bill C-59 and Bill C-69. The authors also examine the
soon-to-be-legislated EV supply chain ITC and the growing
complexity of compliance, recapture and carbon intensity testing
requirements.
Together these initiatives represent a growing effort by the
federal government to close the competitive gap with U.S. policies
under the Inflation Reduction Act and provide businesses with
certainty in their clean energy investments.
The authors explain how existing tax concepts are being adapted to
support the build-out of everything from clean hydrogen to battery
manufacturing and highlight the need for legislative clarity,
particularly around recapture rules and project qualification
standards.
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