Federal Government Introduces Clean Technology Tax Incentives and Announces Amendments to the Nisga’a Final Agreement Act

On April 7, 2022, Finance Minister (and Deputy Prime Minister) Chrystia Freeland tabled the Liberal Government’s federal budget, A Plan to Grow Our Economy and Make Life More Affordable (“Budget 2022”).

Among other things, Budget 2022 proposes to:

• introduce an investment tax credit for carbon capture, utilization, and storage, which would be refundable and available to businesses incurring eligible expenses beginning January 1, 2022;
• expand capital cost allowance Classes 43.1 and 43.2 to include air-source heat pumps that are used primarily for space or water heating; and
• include the manufacturing of air-source heat pumps used for space or water heating as an eligible zero-emission technology manufacturing or processing activity.

Budget 2022 also proposes to:

• provide all provisions of the Nisga’a Nation Taxation Agreement with the force of law by amending the Nisga’a Final Agreement Act (the “Final Agreement Act”);
• amend the Final Agreement Act to provide for an income tax exemption to citizens of the Nisga’a Nation who receive amounts from a registered pension plan if the employment income to which the pension amounts are based was exempt from tax. 

For a discussion of these tax measures and others in Budget 2022, please see McCarthy Tétrault's Budget 2022 Commentary. 2022 Canadian Federal Budget Commentary – Tax Measures | McCarthy Tétrault