Clean Technology Manufacturing Investment Tax Credit-Schedule 76

Clean Technology Manufacturing Investment Tax Credit (CTM ITC)

The Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit supports the development and deployment of projects that capture, transport, store, or use carbon dioxide emissions from industrial processes. Qualified expenditures include the cost of acquiring eligible equipment located in Canada and used for these purposes. The CCUS Investment Tax Credit is proposed to be available for eligible expenditures incurred after 2021 and before 2041.

The credit rates vary based on the type of expenditure and the year the equipment was acquired, ranging from 18.75% to 60% of the eligible CCUS costs. These rates are also subject to labour requirements, which can reduce the credit by 10 percentage points if the taxpayer chooses not to comply with specific prevailing wage and apprenticeship standards related to equipment installation. The credit equals 30% of the equipment cost, but the rate will gradually decline over time.

To Qualify, the Property Must:

Be located in Canada and used only in Canada

Be new (never used or leased before)

Fall into specific asset classes, such as:

Machinery and equipment for manufacturing (e.g., robots, vats)

Building-related assets like ventilation or wiring used in production

Mining equipment such as rock crushers or kilns

Specialized tools like moulds or machine parts

Non-road vehicles, such as electric or hydrogen-powered factory/mine vehicles

The equipment must be used 90% or more for one of the following:

Qualified zero-emission technology manufacturing activities

Producing qualifying materials in a qualifying mineral activity

Note: The credit rates are also subject to labour requirements, which may reduce the credit rate by 10 percentage points if the taxpayer does not elect to comply with certain prevailing wage and apprenticeship conditions for the installation of the property.