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Federal Government Introduces Clean Technology Tax Incentives and Proposes to Review the Scientific Research and Development Program

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:

  • 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;
  • include the manufacturing of air-source heat pumps used for space or water heating as an eligible zero-emission technology manufacturing or processing activity; and
  • review the Income Tax Act (Canada)’s scientific research and experimental development (SR&ED) program.

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.



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