2023 Federal Budget Highlights

On March 28, 2023, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the government’s budget. The budget:

In brief

introduces a refundable investment tax credit for certain clean hydrogen equipment
expands the refundable investment tax credit for clean technology equipment to include certain geothermal energy systems
announces a public consultation on a refundable investment tax credit for certain clean electricity systems and equipment
announces proposed labour requirements that would apply to the clean hydrogen, clean technology and clean electricity investment tax credits
introduces a refundable investment tax credit for certain clean technology manufacturing and processing equipment
expands the eligible activities and extends the phase out period for the reduced tax rates that apply to zero‑emission technology manufacturing and processing income
provides design and implementation details for the 2% tax on the net value of share repurchases by public corporations that was announced in the 2022 Fall Economic Statement
announces a consultation on specific proposals to strengthen the general anti-avoidance rule (GAAR)
amends the alternative minimum tax (AMT) to better target the AMT to high-income individuals
amends the rules introduced by Bill C-208 that facilitate certain intergenerational business transfers, to ensure that they apply only when a genuine intergenerational business transfer occurs
introduces rules to define and facilitate the use of Employee Ownership Trusts to acquire and hold shares of a business

This Article discusses these and other tax initiatives proposed in the budget.

Investment Tax Credit for Clean Hydrogen
Clean Technology Investment Tax Credit – Geothermal Energy
Investment Tax Credit for Clean Technology Manufacturing
Investment Tax Credit for Clean Electricity
Investment Tax Credit for Carbon Capture, Utilization, and Storage
Labour requirements related to certain investment tax credits
Zero-emission technology manufacturers
Flow-through shares and Critical Mineral Exploration Tax Credit – Lithium from brines
Scientific research and experimental development (SR&ED)
Tax on equity repurchases
General anti-avoidance rule
Dividend received deduction by financial institutions
Tax treatment of credit unions