Should EV Factories Get a 10% Tax Credit on Buildings?

Official title: Electric Vehicle Supply Chain investment tax credit

Closed Regulations & Permits Economy & Jobs Environment & Climate
The government offered a 10% tax credit to companies building EV assembly plants, battery factories, or cathode material facilities in Canada. This consultation asked whether the draft rules made sense before they become law. The comment period has now closed.

Why This Matters

Want more EV jobs in Canada? This tax credit aims to attract factories that build electric cars and batteries. More plants could mean more manufacturing jobs and a stronger domestic supply chain. It's part of Canada's push to compete with US incentives.

What Could Change

Companies investing in EV assembly, battery production, or cathode materials could claim a 10% refundable tax credit on eligible building costs. The final rules will be tabled in Parliament based on feedback received. This could influence where automakers decide to build their next Canadian facilities.

Key Issues

  • Are the draft legislative proposals for the EV Supply Chain tax credit appropriate?
  • Which building costs should qualify for the 10% credit?
  • Are the three qualifying segments (EV assembly, battery production, cathode materials) the right focus?

How to Participate

  1. Review the Legislative Proposals Relating to the Income Tax Act to understand the draft rules.
  2. The formal consultation has closed, but you can still share your ideas with the Department of Finance.

What Happened

The consultation ran from February 21 to March 14, 2025. Feedback will be considered and reflected in final legislative proposals to be tabled in Parliament.

Key Documents