Nova Scotia Clean Tech, Green Investment & Manufacturing Credits (2025)

1. Capital Investment Tax Credit (CITC)

The CITC is Nova Scotia’s flagship green/manufacturing tax credit, providing a 15% refundable tax credit for investments in eligible capital assets used in manufacturing, processing, or clean technology projects. The CITC can significantly lower the after-tax cost of major upgrades and expansions.

• Eligibility: Incorporated businesses with permanent establishment in Nova Scotia; project must be pre-approved by NS Finance.
• Eligible Expenditures: New, unused machinery and equipment purchased and installed for use in NS manufacturing, processing, or clean technology operations.
• Ineligible: Used or leased equipment, vehicles, assets outside NS, or assets primarily for administrative use.

Step-by-Step Claim Process

1. Pre-Approval: Submit an application to Nova Scotia Finance with project details and estimate of eligible expenditures before incurring costs.
2. Approval Letter: Receive written confirmation of eligibility and maximum credit amount.
3. Acquire & Install Assets: Purchase and install the approved equipment; keep all invoices, contracts, and proof of payment.
4. File Claim: Complete the CITC claim forms and schedules (usually NS479 and supporting forms) with your T2 corporate tax return, including all supporting documentation.
5. Refund Issued: After review, the refundable CITC is issued as a refund or applied against provincial tax owing.

Calculation Example

If you invest $600,000 in new manufacturing equipment (all eligible), your CITC claim = $600,000 x 15% = $90,000 refund. If you receive a $20,000 Efficiency Nova Scotia grant toward the same equipment, your CITC is based on $600,000 - $20,000 = $580,000 x 15% = $87,000. Grants must be netted off.

2. Energy Efficiency & Green Grants

Efficiency Nova Scotia offers rebates and grants for a variety of business upgrades:

• Lighting, HVAC, refrigeration, process equipment, insulation, building envelope, and more.
• Solar, geothermal, and other renewable energy installations.
• Custom project grants for large or unique energy-saving measures.

Eligibility & Application

1. Available to businesses, non-profits, multi-unit residential, and institutions in Nova Scotia.
2. Apply online or through a registered contractor. Some grants require pre-approval or energy audit.
3. Complete upgrades, submit proof of work and invoices, and receive rebate payment.

Calculation Example

If you spend $100,000 on a lighting upgrade and receive a $30,000 Efficiency Nova Scotia rebate, you claim the rebate directly and may also claim the federal accelerated CCA on the net cost ($70,000). If combined with CITC, subtract the $30,000 rebate before calculating your CITC claim.

3. Accelerated Capital Cost Allowance (CCA)

The federal/provincial accelerated CCA allows Nova Scotia businesses to deduct qualifying clean energy and manufacturing equipment faster, improving cash flow:

• Eligible assets: Class 43.1/43.2 (renewable energy, energy storage, high-efficiency manufacturing equipment, etc.)
• Deduct up to 100% of asset value in the first year (for certain classes) under the Accelerated Investment Incentive regime.
• Claimed on your T2 return via federal and NS schedules.

Calculation Example

Purchase of $200,000 in eligible solar equipment may allow a full $200,000 CCA claim in year 1, reducing taxable income and deferring tax. This can be combined with the CITC and Efficiency Nova Scotia rebates (netting rebates off before calculating CCA).

4. Green Innovation Funding

• Grants and R&D funding for demonstration projects, pilot plants, and commercialization of clean technologies.
• Most require a competitive application; check NS government, ACOA, and federal program portals for current offerings.
• Stackable with CITC and CCA, but you must net any grant received off your CITC/CCA claims.

Stacking with Federal & Other Programs

Many Nova Scotia green and manufacturing incentives can be combined with federal programs, including:

• Federal Clean Technology Investment Tax Credit (30% for certain renewable energy and grid modernization equipment)
• Class 43.1/43.2 CCA for accelerated depreciation of clean energy equipment
• Canada Greener Homes Grant for building upgrades (some overlap for commercial landlords)
• Climate Action Incentives and carbon tax refunds on eligible investments

Stacking Scenario Example

A Nova Scotia manufacturer invests $500,000 in new solar panels, receives a $100,000 Efficiency NS grant, and claims the federal 30% Clean Tech ITC. Stacking works as follows:

• Net eligible expenditure = $500,000 - $100,000 = $400,000
• CITC (15% of $400,000) = $60,000
• Federal Clean Tech ITC (30% of $400,000) = $120,000
• Accelerated CCA on $400,000 (up to 100% in year 1)

Common Mistakes, Documentation & Audit Risk

• Claiming for ineligible assets (used/leased, admin equipment, or outside NS) – only new, qualifying equipment is eligible.
• Not netting off government grants/rebates before calculating tax credits (CITC/federal ITC/CCA).
• Missing pre-approval steps for CITC – always get written authorization before project start.
• Inadequate documentation: Failing to keep proof of purchase, payment, installation, or project completion. Audits can occur up to 7 years later.
• Poor records for grant-funded R&D or innovation projects—retain all technical documents, contracts, and government correspondence.

Frequently Asked Questions

Related Nova Scotia & National Clean Tech Resources

• Back to Nova Scotia Business Tax Directory
• Innovation & Digital Media Credits
• Climate Action Incentives
• Canada-Wide Business Credits
• Nova Scotia CITC Official Application
• CRA Accelerated CCA Info