Bill C-59 Advances Cleantech Tax Credit for Renewable Energy Boost

June 27, 2024
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The cleantech investment tax credit (ITC), first introduced in the 2023 federal budget, is now one step closer to being realized after the passage of Bill C-59 in Parliament. This omnibus bill includes the provisions needed to activate the ITC.

Although the ITC’s approval on Wednesday didn’t receive as much attention as a notable anti-greenwashing measure in the same legislation, it finalizes tens of billions of dollars in tax incentives initially outlined by Finance Minister Chrystia Freeland in March 2023.

Vittoria Bellissimo, the President and CEO of the Canadian Renewable Energy Association (CanREA), stated that the Clean Technology ITC is set to stimulate expansion in Canada’s renewable energy and energy storage industries. She stated, “This initiative will make Canada a more appealing destination for investment, creating new opportunities across all regions.”

Bill C-59 provides a refundable tax credit for companies investing in Canada’s wind, solar, and energy storage sectors, covering 20 to 30% of their capital expenses.

On Thursday, a cabinet sub-committee chaired by Labour Minister Seamus O’Regan announced a plan to accelerate the approval process for major projects, aiming to get them underway within five years.

“We are in a race to develop significant projects and secure our energy future,” O’Regan commented. “Our priorities include constructing more mines, dams, nuclear facilities, as well as solar and wind farms.”

Fernando Melo, Federal Director at CanREA, pointed out that the ITC could be extremely valuable to the renewable energy and energy storage industries, with a design that makes Canada competitive with the U.S. and other regions. He emphasized the need for Ottawa to advance efforts to involve Indigenous communities and businesses in the clean electricity sector.

With Bill C-59 now in place, Canadian firms could begin claiming the tax credit as soon as this summer. CanREA is collaborating with the Canada Revenue Agency and Natural Resources Canada to finalize the guidelines for companies to utilize the credit for their renewable energy and energy storage projects.

In anticipation of this legislation, CanREA members have already begun incorporating the cleantech ITC into their bids for power projects nationwide. Melo believes the impact of the ITC will be felt quickly.

As a federal election looms, the climate and energy community is considering what might happen if the government changes direction. Melo emphasized that these tax credits benefit businesses and Canada, improving electricity affordability for everyone in the country.

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