Finance Minister Chrystia Freeland Enacts Clean Tech Manufacturing 30% Investment Tax Credits

OTTAWA — Deputy Prime Minister and Minister of Finance Chrystia Freeland announced on Monday the formal gazetting and operational enforcement of regulations governing the Clean Technology Manufacturing Investment Tax Credit (Clean Tech Manufacturing ITC), providing a 30 percent refundable tax credit on capital equipment used in clean technology manufacturing and critical mineral extraction and processing.

The regulatory framework, enacted through amendments to the Income Tax Act, provides statutory investment certainty matching international clean economy incentives, covering eligible machinery used to manufacture zero-emission vehicles, electric vehicle batteries, solar panels, wind turbines, nuclear equipment, and the extraction of 31 designated critical minerals.

Securing Billions in Domestic Industrial Clean Manufacturing Federal economic forecasts estimate that the Clean Tech Manufacturing ITC will catalyze over $45 billion in private capital investment in Canadian manufacturing facilities over the next decade, while anchoring clean supply chains in Ontario, Quebec, Alberta, and British Columbia.

"Canada is building a world-class, clean industrial economy that creates great careers for generations of Canadian workers," Deputy Prime Minister Chrystia Freeland said in Ottawa. "By delivering this 30 percent refundable investment tax credit, we are ensuring Canadian manufacturers can compete and win against the world, attracting billions in global investment to build electric cars, advanced batteries, and clean energy technology right here at home."

Prevailing Wage and Union Apprenticeship Requirements Under the statutory regulations, companies claiming the full 30 percent tax credit must adhere to strict labor requirements:

• Prevailing Wage Guarantees: Ensuring all construction and trade workers on eligible project sites are paid union-negotiated prevailing wages.
• Union Apprenticeship Benchmarks: Requiring at least 10 percent of total trade labor hours to be performed by registered apprentices.
• Failure to meet labor benchmarks reduces the credit rate by 10 percentage points to 20 percent.

Canadian Manufacturers & Exporters (CME), clean energy developers, and building trades labor unions commended the government's decisive regulatory action, highlighting that refundable tax credits provide predictable, bankable capital for domestic clean manufacturing.