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The 2023 federal budget (the 2023 Budget) delivers on the Federal Government’s promise to provide significant tax credits to help Canada meet its climate change goals and reduce carbon emissions. The suite of tax credits includes the refundable clean technology investment tax credit (the Clean Tech Credit), the clean hydrogen tax credit (the Clean Hydrogen Credit), the clean technology tax incentives for air-source heat pumps (the Clean Tech Incentives), the investment tax credit for carbon capture, utilization and storage (the CCUS Tax Credit) and the clean electricity tax credit (the Clean Electricity Credit, together the Climate Change Tax Credits). This article focuses on the Clean Hydrogen Credit. The Federal Government’s introduction of the Climate Change Tax Credits is due in large part to the tax incentives put in place by the Biden administration as part of the Inflation Reduction Act (the IRA), which was passed in August 2022. The IRA carried with it significant tax reform focussed on climate change initiatives. One such measure included an investment tax credit ranging between 6 and 30 per cent of the capital cost of qualifying equipment for production of hydrogen. The IRA also included a hydrogen production tax credit ranging between US$0.60 […]
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