Canada's 5 Clean Economy Investment Tax Credits, Explained
Up to 30% back on clean technology, up to 60% on carbon capture, and 15–40% on clean hydrogen — all refundable. Bill C-15 finalized Canada's clean economy investment tax credits in March 2026, including the long-awaited Clean Electricity ITC. Here is what each credit is worth, who qualifies, and the labour-requirement rule that quietly costs non-compliant claimants 10 percentage points.
The short answer
Canada's clean economy investment tax credits (ITCs) are refundable federal credits that pay a percentage of the capital you invest in clean energy and decarbonization back to you as cash — even if your business owes no tax. The five most widely applicable are the Clean Technology ITC (up to 30%), the Clean Electricity ITC (up to 15%), the Clean Hydrogen ITC (15% to 40%, tiered by carbon intensity), the Carbon Capture, Utilization and Storage ITC (up to 60%), and the Clean Technology Manufacturing ITC (up to 30%).
These five were finalized when Bill C-15 received Royal Assent on March 26, 2026, formally enacting the previously-draft Clean Electricity ITC and expanding several of the others. Four of the five offer two rate tiers: claim the higher rate only if you elect to meet labour requirements, or accept a 10-percentage-point reduction. The Clean Technology Manufacturing ITC is the exception and is never subject to labour requirements.
The 5 Clean Economy ITCs at a Glance
Every credit below is refundable, meaning the Canada Revenue Agency pays it out as cash even when the claimant has no tax payable. The "full rate" column shows the headline rate when labour requirements are met; the reduced rate applies when they are not.
| Credit | Full rate | What qualifies | Who can claim | Refundable? | Labour requirements |
|---|---|---|---|---|---|
| Clean Technology ITC | 30% (20% if not met) |
Clean tech property: solar, wind, water and geothermal generation, energy storage, heat pumps, non-road zero-emission vehicles, certain waste-biomass systems. | Taxable Canadian corporations (including partners of a partnership). | Yes | Yes — reduces rate by 10 pts if not met. |
| Clean Electricity ITC | 15% (5% if not met) |
Low-emitting electricity generation, stationary electricity storage, and interprovincial transmission equipment. | Taxable corporations plus provincial/territorial Crown corporations, municipal- and Indigenous-owned corporations, pension corporations, and the Canada Growth Fund. | Yes | Yes — reduces rate by 10 pts if not met. |
| Clean Hydrogen ITC | 15–40% (by carbon intensity) |
Clean hydrogen production property; 15% also for clean-hydrogen-to-ammonia conversion equipment. | Taxable Canadian corporations. | Yes | Yes — each tier drops 10 pts if not met. |
| CCUS ITC | Up to 60% (by expenditure type) |
Carbon capture (60% direct air capture / 50% other), transport, storage, and use equipment (37.5%). | Taxable Canadian corporations. | Yes | Yes — reduces rates by 10 pts if not met. |
| Clean Technology Manufacturing ITC | 30% | Property used in zero-emission tech manufacturing and the extraction, processing, and recycling of eligible critical minerals. | Taxable Canadian corporations (including partners of a partnership). | Yes | No — exempt; always pays 30%. |
The 10-percentage-point rule that catches people off guard
For the Clean Technology, Clean Electricity, Clean Hydrogen, and CCUS credits, the headline rate is only available if you elect to meet labour requirements: covered workers must be paid at least a prevailing wage tied to an eligible collective agreement, and at least 10% of the labour hours performed by Red Seal trades must be done by registered apprentices. Skip the election and a 30% credit becomes 20%, a 15% credit becomes 5%, and so on. Plan compliance before construction — it is tied to the work performed, not added afterward.
Each Credit in Detail
A closer look at what each clean economy ITC covers, what it is worth, who can claim it, and how it is claimed.
1. Clean Technology ITC
The workhorse credit for businesses buying and operating clean energy equipment.
Refundable Labour requirements applyThe Clean Technology ITC is a refundable credit worth up to 30% of the capital cost of eligible clean technology property acquired and available for use from March 28, 2023 to December 31, 2033 (the rate falls to 15% for property available for use during 2034). Eligible property includes solar, wind, water, and geothermal electricity generation, concentrated solar, stationary energy storage, low-carbon heat equipment such as air- and ground-source heat pumps, non-road zero-emission vehicles, and — following a Bill C-15 expansion — certain systems that produce electricity or heat from waste biomass.
The full 30% rate requires the claimant to elect to meet labour requirements. If the election is not made, the rate is reduced by 10 percentage points to 20%.
Source: Canada Revenue Agency, Clean Technology Investment Tax Credit (canada.ca).2. Clean Electricity ITC
The newest credit — and the only one open to public power producers.
Refundable Labour requirements applyThe Clean Electricity ITC is a refundable credit worth up to 15% of the capital cost of eligible low-emitting electricity property: clean generation systems such as solar and wind, stationary electricity storage, and interprovincial transmission equipment. It applies to qualifying property available for use after April 15, 2024 that is not part of a project whose construction began before March 28, 2023. Bill C-15 was the legislation that formally enacted this credit, so businesses can now claim it.
What makes the Clean Electricity ITC distinct is its unusually broad eligibility. Beyond taxable Canadian corporations, it reaches provincial and territorial Crown corporations, corporations at least 90% owned by Canadian municipalities or Indigenous governing bodies (and their wholly-owned subsidiaries), qualifying pension corporations, and the Canada Growth Fund. Because the credit is refundable, these non-taxable entities receive it as a cash payment. As with the others, not electing to meet labour requirements reduces the rate by 10 percentage points, to 5%.
Source: Canada Revenue Agency, Clean Electricity Investment Tax Credit (canada.ca); EY, "Canada substantively enacts ... Bill C-15," 2026.3. Clean Hydrogen ITC
A tiered credit where the cleaner your hydrogen, the bigger your rate.
Refundable Labour requirements applyThe Clean Hydrogen ITC is a refundable credit whose rate is tiered by the carbon intensity (CI) of the hydrogen a project produces, measured in kilograms of carbon dioxide equivalent per kilogram of hydrogen. The credit is 40% for a CI below 0.75, 25% for a CI from 0.75 to under 2, and 15% for a CI from 2 to under 4. Hydrogen with a CI of 4 or higher does not qualify. A 15% credit also extends to equipment used to convert clean hydrogen into ammonia where the ammonia production is tied to the clean hydrogen.
Carbon intensity is not self-declared: a project must assess its expected CI using the Government of Canada's Fuel Life Cycle Assessment Model, maintained by Environment and Climate Change Canada. The assessment sets the credit rate, so it is a prerequisite to a valid claim. If the claimant does not elect to meet labour requirements, each rate above drops by 10 percentage points.
Source: Canada Revenue Agency, Clean Hydrogen Investment Tax Credit (canada.ca); ECCC Fuel Life Cycle Assessment Model guidance.4. Carbon Capture, Utilization & Storage (CCUS) ITC
The highest-rate credit of the five — built for heavy industry.
Refundable Labour requirements applyThe CCUS ITC is a refundable credit for qualified carbon capture projects, and it carries the highest headline rates of the five. For eligible expenditures incurred after 2021 and before 2031, the rates are 60% for equipment that captures carbon directly from ambient air, 50% for other carbon capture equipment, and 37.5% for carbon transportation, storage, and use equipment. These rates are cut in half for expenditures incurred from 2031 onward; Bill C-15 extended the full-rate window. The CCUS ITC is jointly administered by the Canada Revenue Agency and Natural Resources Canada.
As with the other rate-tiered credits, not electing to meet labour requirements reduces each rate by 10 percentage points (to 50%, 40%, and 27.5% respectively). The CCUS ITC applies to qualified projects from January 1, 2022 through the program's end date.
Source: Canada Revenue Agency, Carbon Capture, Utilization, and Storage Investment Tax Credit (canada.ca); Natural Resources Canada.5. Clean Technology Manufacturing ITC
For makers and miners — and the only credit with no labour-requirement strings.
Refundable No labour requirementsThe Clean Technology Manufacturing (CTM) ITC is a refundable credit worth up to 30% of the capital cost of eligible property used in zero-emission technology manufacturing and processing, and in the extraction, processing, and recycling of eligible critical minerals such as lithium, cobalt, nickel, copper, rare earth elements, and graphite. The 30% rate applies from January 1, 2024 to December 31, 2031, then phases down to 20% in 2032, 10% in 2033, and 5% in 2034. Eligible property includes manufacturing machinery and equipment, certain tangible property attached to manufacturing buildings, and equipment used in mineral extraction and processing. Bill C-15 expanded the eligible critical minerals list and added qualifying equipment for eligible polymetallic mining projects.
Unlike the other four credits, the CTM ITC is not subject to labour requirements — there is no two-tier rate. An eligible claimant receives the full headline rate without electing to meet prevailing-wage or apprenticeship conditions.
Source: Canada Revenue Agency, Clean Technology Manufacturing Investment Tax Credit (canada.ca).ITCs are tax credits — what grants are you also leaving on the table?
The clean economy ITCs reward capital you spend. But Canada also runs hundreds of clean-tech, manufacturing, and energy grants that fund the project up front. The Precision Match quiz finds the programs you actually qualify for in under two minutes.
Find My Funding Matches →Free · 2 minutes · No credit card required
Who Qualifies, and How the Credits Fit Together
Eligibility, not just the rate, determines whether a claim is possible. Here is how the credits map to different kinds of businesses and projects.
Entity eligibility differs by credit
Four of the five credits — Clean Technology, Clean Hydrogen, CCUS, and Clean Technology Manufacturing — require a taxable Canadian corporation, which includes corporations that are members of a partnership. The Clean Electricity ITC is the outlier: it was deliberately designed to reach public and non-taxable power producers, so it also covers provincial and territorial Crown corporations, municipal- and Indigenous-owned corporations, qualifying pension corporations, and the Canada Growth Fund. If your project is a utility, a municipal energy authority, or an Indigenous-owned generation project, the Clean Electricity ITC is likely your relevant credit.
Source: Canada Revenue Agency, Clean Economy Investment Tax Credits (canada.ca), 2026.One property, one credit — but a project can mix them
A single piece of property can only be claimed under one clean economy ITC; the credits are mutually exclusive at the property level, so you cannot claim the same equipment under both the Clean Technology and Clean Electricity ITCs. A larger project, however, can claim different credits on different property. A clean hydrogen facility might claim the Clean Hydrogen ITC on its electrolyzers while a co-located solar array claims the Clean Technology ITC, and a manufacturer building zero-emission products could pair the Clean Technology Manufacturing ITC on its production line with a Clean Technology ITC on the rooftop solar that powers it.
Government assistance reduces your cost base
The credit is calculated on the capital cost of eligible property after subtracting other government assistance. If a grant or other program covers part of the same equipment, that assistance lowers the base on which the ITC is calculated. This is why it pays to map your full funding stack before you file: grants that fund a project up front and ITCs that refund capital after the fact interact, and stacking them without planning can shrink the credit. For project-stage funding that complements these capital credits, see our guides to clean technology grants and manufacturing grants.
Recapture: the credit can be clawed back
Clean economy ITCs come with recapture rules. If eligible property is sold, exported from Canada, or converted to a non-eligible use within a defined period after it becomes available for use, the Canada Revenue Agency can recover part or all of the credit. Keeping property in eligible use and maintaining documentation protects the claim.
What's Changed in 2026
The clean economy ITCs moved from "announced" to "claimable" this year. Here is what is new.
Bill C-15 received Royal Assent on March 26, 2026
Bill C-15 — the legislation implementing Budget 2025 — received Royal Assent on March 26, 2026. For the clean economy credits, the headline change is that it formally enacted the Clean Electricity ITC, which had previously existed only in draft legislation. Businesses and eligible public entities can now actually claim it, removing the uncertainty that had stalled clean power investment decisions.
Source: Department of Finance Canada, "Legislation passes to implement Budget 2025" (March 2026); EY tax alerts, 2026.The CCUS full-rate window was extended
Bill C-15 extended the period during which the CCUS ITC pays its full headline rates (60% / 50% / 37.5%) before they are cut in half, giving carbon capture projects a longer runway to incur expenditures at the higher tier. For capital-intensive CCUS projects with multi-year build schedules, this extension materially changes the math.
Clean Technology and Clean Tech Manufacturing eligibility expanded
The Clean Technology ITC was expanded to include systems that produce electricity and/or heat from waste biomass. The Clean Technology Manufacturing ITC was broadened to cover qualifying equipment used in eligible polymetallic mining projects and to add to the list of eligible critical minerals. Several of these expansions apply retroactively, so projects already underway should re-check eligibility against the enacted rules.
The scale of the commitment
The Government of Canada projects more than $93 billion in clean economy tax incentives through 2034. The Parliamentary Budget Officer has estimated the broader family of economic investment tax credits will cost on the order of $103 billion across 2022-23 to 2034-35, with annual support peaking around $12.9 billion in 2031-32. Whatever the precise figure, the direction is clear: these credits are now a central, funded pillar of Canada's industrial policy — not a pilot.
Sources: Government of Canada clean economy ITC materials (canada.ca); Parliamentary Budget Officer, "Long-Term Fiscal Cost of Major Economic Investment Tax Credits."How to Claim a Clean Economy ITC: Step by Step
The process is technical but consistent across the credits. Here is the path from planning to payment.
Identify which credit your property falls under
Match your planned investment to one credit: clean tech equipment (Clean Technology ITC), low-emitting generation, storage, or transmission (Clean Electricity ITC), clean hydrogen production (Clean Hydrogen ITC), carbon capture, transport, storage, or use equipment (CCUS ITC), or zero-emission manufacturing and critical mineral processing (Clean Technology Manufacturing ITC). A single property is claimed under only one credit.
Confirm your entity is eligible
Four credits require a taxable Canadian corporation. The Clean Electricity ITC also reaches Crown corporations, municipal- and Indigenous-owned corporations, pension corporations, and the Canada Growth Fund. Verify your entity type before committing capital, because eligibility, not just the rate, decides whether a claim is possible at all.
Decide whether to meet labour requirements
For the Clean Technology, Clean Electricity, Clean Hydrogen, and CCUS credits, electing to meet labour requirements — prevailing wages plus at least 10% of Red Seal labour hours performed by registered apprentices — earns the full rate. Not electing reduces the rate by 10 percentage points. Plan compliance before construction begins. The Clean Technology Manufacturing ITC is exempt.
Complete technical validation where required
Clean Hydrogen projects must have their expected carbon intensity assessed using the federal Fuel Life Cycle Assessment Model, because the assessed CI sets the rate. CCUS projects are evaluated by Natural Resources Canada alongside the CRA. Build time for these validations into your schedule, as they are prerequisites to a valid claim.
File the claim on your T2 return
Claim the credit on the corporate income tax return for the tax year the eligible property becomes available for use. File the prescribed ITC schedule, attach the required information returns, include your labour-requirement election where applicable, and reduce the capital cost by any other government assistance received before applying the rate. Because the credits are refundable, an approved claim is paid out as cash.
Maintain records for CRA review
Keep capital cost documentation, labour-requirement attestations, carbon intensity assessments, and project evaluations on file. The CRA can review clean economy ITC claims, and recapture rules can claw back the credit if property is sold, exported, or converted to a non-eligible use within a defined period. Strong contemporaneous records protect the claim.
Frequently Asked Questions
Canada's clean economy investment tax credits (ITCs) are a family of refundable federal tax credits that pay businesses back a percentage of the capital they invest in clean energy and decarbonization. The five most widely applicable are the Clean Technology ITC (up to 30%), the Clean Electricity ITC (up to 15%), the Clean Hydrogen ITC (15% to 40%), the CCUS ITC (up to 60%), and the Clean Technology Manufacturing ITC (up to 30%). All five were finalized when Bill C-15 received Royal Assent on March 26, 2026. Because the credits are refundable, an eligible corporation receives cash back from the CRA even if it owes no tax.
The Clean Technology ITC is a refundable credit worth up to 30% of the capital cost of eligible clean technology property acquired and available for use from March 28, 2023 to December 31, 2033, dropping to 15% for property available for use in 2034. The full 30% rate requires the claimant to meet labour requirements covering prevailing wages and apprenticeship hours for workers preparing or installing the property. If those labour requirements are not met, the rate is reduced by 10 percentage points to 20%.
Yes. All five credits covered here — Clean Technology, Clean Electricity, Clean Hydrogen, CCUS, and Clean Technology Manufacturing — are refundable. A refundable credit means the Canada Revenue Agency pays the credit amount as cash to the eligible entity even if it has no tax payable. This makes the credits valuable to pre-revenue clean energy projects, capital-intensive manufacturers, and non-taxable entities such as municipal and Indigenous-owned corporations that qualify for the Clean Electricity ITC.
Four of the five credits — Clean Technology, Clean Electricity, Clean Hydrogen, and CCUS — offer two rate tiers. To claim the higher rate, the business must elect to meet labour requirements: covered workers must be paid at least a prevailing wage tied to an eligible collective agreement, and at least 10% of the labour hours performed by Red Seal trades must be done by registered apprentices. If a business does not elect to meet these requirements, the applicable rate is reduced by 10 percentage points. The Clean Technology Manufacturing ITC is the exception — it is not subject to labour requirements and always pays its headline rate.
For qualified CCUS expenditures incurred after 2021 and before 2031, the rates are 60% for equipment that captures carbon directly from ambient air, 50% for other carbon capture equipment, and 37.5% for carbon transportation, storage, and use equipment. These rates are halved for expenditures from 2031 onward, and Bill C-15 extended the full-rate window. As with the other rate-tiered credits, the rates are reduced by 10 percentage points if labour requirements are not met. The CCUS ITC is jointly administered by the CRA and Natural Resources Canada.
The rate is tiered by the carbon intensity (CI) of the hydrogen a project will produce, measured in kilograms of carbon dioxide equivalent per kilogram of hydrogen. The credit is 40% for a CI below 0.75, 25% for a CI from 0.75 to under 2, and 15% for a CI from 2 to under 4. Hydrogen with a CI of 4 or higher does not qualify. CI is assessed using the Government of Canada's Fuel Life Cycle Assessment Model maintained by Environment and Climate Change Canada. A 15% credit also extends to equipment that converts clean hydrogen into ammonia. If labour requirements are not met, each rate drops by 10 percentage points.
The Clean Electricity ITC has the broadest eligibility because it was designed to reach public and non-taxable electricity producers. Eligible entities include taxable Canadian corporations, provincial and territorial Crown corporations, corporations at least 90% owned by Canadian municipalities or Indigenous governing bodies (and their wholly-owned subsidiaries), qualifying pension corporations, and the Canada Growth Fund. The credit is worth up to 15% of the capital cost of eligible low-emitting generation, stationary storage, and interprovincial transmission equipment available for use after April 15, 2024.
A single piece of property can only be claimed under one clean economy ITC — the credits are mutually exclusive at the property level, so you cannot double-claim the same equipment. However, a larger project can claim different credits on different property: a clean hydrogen plant might claim the Clean Hydrogen ITC on its electrolyzers while a co-located solar array claims the Clean Technology ITC. Check whether project costs overlap with other federal or provincial programs, because total government assistance reduces the cost base on which a credit is calculated.
A clean economy ITC is claimed on the corporate (T2) income tax return for the year the eligible property becomes available for use. The corporation files the relevant prescribed schedule with the CRA, attaches the required information returns, and elects to meet labour requirements where it wants the higher rate. The CCUS and Clean Hydrogen credits also involve technical validation: CCUS projects work with Natural Resources Canada, and Clean Hydrogen projects must have their carbon intensity assessed using the federal Fuel Life Cycle Assessment Model. Because the credits are refundable, an approved claim results in a payment from the CRA, not just a reduction of tax owing.
On March 26, 2026, Bill C-15 — the legislation implementing Budget 2025 — received Royal Assent. This formally enacted the Clean Electricity ITC, which had previously existed only in draft legislation. Bill C-15 also extended the CCUS ITC's full-rate window, expanded the Clean Technology ITC to include systems producing electricity or heat from waste biomass, and broadened the Clean Technology Manufacturing ITC to cover additional critical minerals and polymetallic mining projects. Several expansions apply retroactively. The Government of Canada projects more than $93 billion in clean economy tax incentives through 2034.