The 2024 federal budget, presented by Finance Minister Chrystia Freeland, includes incentives aimed at attracting more EV assembly to Canada. One of the key measures is a new tax credit designed to support the EV supply chain and secure the future of Canada’s automotive industry. Specifically, this credit applies to businesses that invest in Canada across three EV segments: assembly, battery production, and cathode active materials used in batteries. The credit can be applied to the cost of buildings.

Additionally, companies can combine this new Electric Vehicle Supply Chain investment tax credit with the existing Clean Technology Manufacturing investment tax credit, which was introduced last year. To qualify for the new tax credit, a company must claim the Clean Technology Manufacturing credit in all three specified segments or in two of the three segments while holding a qualifying minority interest in an unrelated corporation that claims the credit in the third segment.

Flavio Volpe, President of the Automotive Parts Manufacturers’ Association, mentioned that significant new EV investments are on the horizon. However, it’s worth noting that this credit primarily targets established companies rather than startups.

Source: Electric Autonomy Canada