Before the end of 2023, the Government of Canada quietly announced its Fall Economic Statement that included changes to tax credits (Bill C-59) with impact on the climate venture space. Here are the top four things we think you should know. 

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CCUS technology a priority: more specifics around ‘first day of commercial’ operation that will provide more opportunity for expenditures to be claimed during start-up operations. In addition, guardrails have been developed to restrict political influence from the Minister and maintain integrity and consistency. 

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As a country with extensive heavy industry, Canada continues to position itself as a supportive ‘first mover’ in many carbon capture efforts. 

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Geothermal and Biomass opportunities: The amendments also broaden the definition of clean technologies to include energy created through waste biomass and heat recapture. Clear definitions have been provided for the types of waste and integrated systems, with a heat threshold of 11,000 BTUs

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With abundant biomass and geothermal potential, this positions Canada to be an attractive place for companies looking to grow into these spaces, including biogas.

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Costal opportunities featured:  The new amendment includes property in the exclusive economic zone (the 200 nautical miles area of the sea where a state has exclusive rights) that are using wind or water for electricity generation.

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As one of only a few countries with three coastlines, this expansion opens up new opportunities in an area where Canada could be uniquely positioned to lead including tidal energy and offshore wind. 

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Broader definition of ‘investor’: The definition of qualified taxpayer has been expanded and now allows taxable Canadian corporations, REITs, or partnership members to claim the Clean Tech ITC.

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This expansion should broaden the spectrum of active investors into climate venture, hopefully further stimulating growth capital and project financing. 

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In closing, the Canadian government continues to double down its emphasis of green growth and positions itself as a hub for growth in emerging verticals. 

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