Recommendation 1: Extend the Clean Economy Investment Tax Credits to at least 2040 to align with major project timelines.
Recommendation 2: Streamline and clarify the Clean Economy Investment Tax Credits to reduce administrative burden and preserve the value of the ITCs for catalyzing investment into clean energy projects.
Electricity Alliance Canada’s mandate is to enable, promote and advocate for the increased use of electricity throughout the Canadian economy to help achieve Canada’s net-zero emissions target. The Alliance’s founding members are the Canadian Nuclear Association, Canadian Renewable Energy Association, Electricity Canada, Electricity Human Resources Canada, Marine Renewables Canada and WaterPower Canada.
The government has established an ambitious goal of making Canada a global energy superpower. Powering Canada Strong: A National Strategy for an Electrified Canadian Economy, seeks to build new infrastructure to double Canada’s electricity supply by 2050 to meet growing demand and accelerate electrification across the economy to support competitiveness and address climate change. This will require an aggressive build out of electricity infrastructure over the next 25 years.
As we advance Canada’s energy future, the Clean Economy Investment Tax Credits (ITCs) are vital to unlocking nation-building projects of all sizes that connect our regions, diversify our economy, and create hundreds of thousands of high-paying careers while mitigating the cost impacts of the build out for Canadians.
Recommendation 1: Extend the Clean Economy Investment Tax Credits to at least 2040 to align with major project timelines.
Canada’s clean energy build out will span decades. Its investment framework should reflect this long-term horizon. The availability of the ITCs must align with project timelines for energy generation projects, and the transmission and distribution infrastructure required to bring clean Canadian electricity to market. Extending the ITCs through to the end of 2040 at a minimum will give investors, developers and utilities the confidence and framework needed to advance clean energy projects across the country.
For example, in the case of offshore wind, projects can take 7-10 years to come online. The cumulative impact of government timelines to adopt C-49, establish the regulatory framework and follow the land tenure process, to obtain environmental approvals and licencing, and then complete construction, creates significant risk that projects may not come online in time to meet the current 2035 deadline. As it stands, offshore wind developers do not have enough certainty on timelines to include the ITCs into their project development plans.
Similarly, the planning, permitting and construction timelines for large hydropower projects typically span 8-10 years. It is therefore unlikely that large hydro projects could be completed within the ITC’s time horizon, particularly since the Time of Acquisition provision contained in paragraph 127.491 (7) limits eligibility to property available for use. Since hydro facilities are not generally available for use until the majority of the asset is commissioned, and commissioning can be delayed because of a permitting or construction delay, or because of other unforeseen events, the value of the Clean Electricity ITC could be forgone for many hydro projects.
The planning and licensing process to first license a nuclear power plant can be 5-8 years and then additional time to obtain construction and operating licenses. The total time required to reach operation is well over 10 years. Like large hydro projects, it is very unlikely that these projects could be completed within the ITC’s time horizon. The nuclear industry requires an extension to the ITCs for them to be included in the projected nuclear build out.
The planning, approvals and construction of transmission lines can similarly take 8-10 years or more depending on the length and geography of the line. Interprovincial transmission lines, the only transmission lines currently covered by the ITCs, can take even longer during the planning phase as the jurisdictions involved negotiate the benefit framework. Building both new transmission lines and upgrading existing lines are essential for connecting new clean generation projects to the grid and supporting the government’s objective of greater electricity trade within Canada. If the government intends to expand the Clean Electricity ITC to include certain major high-voltage intra-provincial transmission projects as announced in the National Electricity Strategy, extending the ITC out to 2040 would be warranted given the narrow timeframe the ITC would be available for those projects post-implementation.
The extension out to 2040 would also align the Clean Technology ITC, Clean Electricity ITC, Clean Hydrogen ITC and the Clean Technology Manufacturing ITC with the Carbon Capture, Utilization, and Storage ITC which is already available until the end of 2040.
We appreciate that the government has many competing priorities for limited financial resources. However, extending the ITCs to at least 2040 will help unlock Canada’s share of global clean energy investments that reached over USD $2 trillion annually in 2024. Investment into clean energy projects will spur economic growth and emissions reductions across the country. Given the low uptake of the ITCs to date compared to the initial projections, there may be room to extend the ITCs out to or beyond 2040 within the government existing fiscal framework[1].
Recommendation 2: Streamline and clarify the Clean Economy Investment Tax Credits to reduce administrative burden and preserve the value of the ITCs for catalyzing investment into clean energy projects.
The Clean Economy ITCs have been slow to rollout and complex to claim. As a result, proponents of the clean energy projects that are needed to reduce emissions and meet the growing demand for electricity have been unable to claim the ITCs at the desired rate.
The ITCs are complex policy tools as they are applied at the component level, necessitating detailed reporting by proponents and detailed policy making by government. The range of corporate structures and partnerships that exist within the electricity sector adds to this complexity, as does the inclusion of the labour requirements. The administrative, data collection and verification tasks required to make a successful ITC claim are significant. This is particularly challenging for small and medium size businesses. It has taken multiple years to establish clear rules for the ITCs, and this work is still ongoing, contributing to the ITCs’ delayed implementation.
To improve clarity for proponents the government should issue clear guidance as soon as possible that fully articulates which components are eligible for which ITC. The government should consider the feasibility of establishing one Schedule for all eligible property.
To avoid adding complexity to the process of making an ITC claim the government should not implement a domestic content requirement as a penalty. This would introduce significant tracking and verification challenges for proponents and may be misaligned with the timelines and practicalities of increasing procurement from domestic sources. Rather, a domestic content requirement should only be introduced as an optional additional incentive.
Further, the government should allow the market to determine labour rates. In a period of sector growth and known limited labour supply, labour rates will increase as a result of market economics and will be aligned to local and regional markets. Adding a labour rate requirement adds unnecessary regulatory complexity.
Electricity Alliance Canada recommends streamlining and simplifying the Clean Economy ITCs to reduce the administrative burden involved with making an ITC claim and so that proponents can count on the full value of the ITCs. This will more effectively incentivize investment in the clean energy projects needed to make Canada an energy superpower.
Thank you for your consideration of Electricity Alliance Canada’s proposal. We would be happy to discuss these recommendations at your convenience.
Signed Respectfully,
| George Christidis
President & CEO Canadian Nuclear Association |
Vittoria Bellissimo
President & CEO Canadian Renewable Energy Association |
| Francis Bradley
President & CEO Electricity Canada |
Michelle Branigan
CEO Electricity Human Resources Canada |
| Elisa Obermann
Executive Director Marine Renewables Canada |
Lorena Patterson
President & CEO WaterPower Canada |
[1] The Commissioner of the Environment and Sustainable Development, Implementing the Canadian Net-Zero Emissions Accountability Act – Financial Measure report tabled in November 2025 found that there had been low initial uptake of the Clean Economy ITCs compared to Finance Canada’s projections. The Department’s refined forecast, published in March 2025, expected $9.2 billion to be claimed by the end of 2025. The Commissioner however found that as of July 2025 only the Clean Technology ITC had paid out any claims and those claims only totalled $22 million. The Clean Electricity ITC, first announced in 2023, just received Royal Assent in March of this year, later than initially anticipated.