Ontario Green & Clean Tech Business Credits & Incentives Guide (2025)

Ontario is a Canadian leader in clean technology, sustainable manufacturing, and climate innovation. The province's green economy is driven by ambitious climate goals, a diverse cleantech sector, and a suite of tax credits, grants, and incentives designed to help businesses adopt sustainable technologies, reduce emissions, and boost competitiveness. Whether you're a manufacturer, cleantech startup, municipal enterprise, or innovator in renewable energy, this comprehensive guide covers all major Ontario green and clean technology business credits and incentives. You'll find detailed eligibility criteria, step-by-step claim instructions, calculation examples, audit tips, and practical scenarios for stacking credits with federal programs.

Quick Links: Ontario Green & Clean Tech Credits Directory

Ontario Innovation Tax Credit (OITC) – Green & Cleantech R&D

The OITC is a refundable tax credit equal to 8% of eligible R&D expenditures carried out in Ontario by Canadian-Controlled Private Corporations (CCPCs), including projects focused on green and clean technology.

Eligibility

Step-by-Step Claim Process

  1. Track all eligible R&D costs (payroll, contracts, materials, overhead, etc.)
  2. File federal SR&ED claim (T661 and related schedules) with your T2 return
  3. Complete Ontario Schedule 566 (OITC) and include with your T2 return
  4. Retain detailed technical documentation, payroll, and project records

Calculation Example

If a manufacturer spends $150,000 on eligible green R&D, the OITC is $12,000 (8%). This is in addition to the federal SR&ED credit (up to 35% refundable for CCPCs).

Documentation Required

Ontario Clean Technology Investment Tax Credit (ON Clean Tech ITC)

The ON Clean Tech ITC is a new (2024+) non-refundable credit to support eligible capital investments in clean energy generation, energy storage, and green manufacturing assets in Ontario.

Eligibility

Step-by-Step Claim Process

  1. Purchase/install eligible clean tech equipment (keep invoices and contracts)
  2. File Ontario Schedule (TBD, likely Schedule 573 or similar) with your T2
  3. Calculate credit as % of eligible investment (rate may change, e.g., 10%-20%)
  4. Credit carried forward if not used in current year

Calculation Example

An Ontario manufacturer invests $500,000 in solar panels and battery storage. At 15%, the credit is $75,000 (non-refundable, reduces Ontario corporate tax).

Documentation Required

Ontario Net Zero Accelerator & Green Infrastructure Grants

Ontario partners with federal Net Zero Accelerator and Strategic Innovation Fund (SIF) programs to provide grants for large-scale decarbonization, green manufacturing, and cleantech demonstration projects.

Eligibility

Step-by-Step Application Process

  1. Monitor open calls (Ontario Ministry of Economic Development, SIF website)
  2. Submit Expression of Interest (EOI) with project summary and impact
  3. If shortlisted, submit detailed proposal (technical, financial, ESG, etc.)
  4. Negotiate funding agreement and track/report milestones

Calculation Example

Grant rates range from 10%-50% of eligible costs. A green steel plant retrofit of $10M could receive $2M-$5M in grants, plus stackable tax credits.

Documentation Required

Ontario Energy Efficiency & Retrofit Incentives

Ontario businesses can access a variety of provincial and utility-led incentives for energy retrofits, electrification, and green building upgrades.

Eligibility

Step-by-Step Claim/Application Process

  1. Check eligibility with the IESO Save on Energy, Enbridge Gas, or local utility
  2. Apply before purchase/installation (pre-approval required for most programs)
  3. Complete project and submit proof of completion, invoices, photos
  4. Receive grant/rebate (usually direct deposit or cheque)

Calculation Example

Save on Energy's Retrofit Program may cover up to 50% of project costs. $80,000 HVAC upgrade could net a $40,000 rebate.

Documentation Required

Ontario Cleantech Startup & Demonstration Grants

Startups and SMEs developing green/clean technology can access direct grants through organizations like Ontario Centre of Innovation (OCI), Sustainable Development Technology Canada (SDTC), and MaRS.

Eligibility

Step-by-Step Application Process

  1. Identify relevant grant program (OCI, SDTC, MaRS, etc.)
  2. Submit online application with business plan, technical detail, and financials
  3. Pitch/interview if shortlisted
  4. Sign grant agreement and complete regular reporting

Calculation Example

OCI’s ENCQOR 5G program: up to $50,000 for cleantech pilots; SDTC: up to 33% of eligible project costs, often $100,000–$2M+.

Documentation Required

Stacking Ontario & Federal Green Tech Credits

Most Ontario programs allow stacking with federal credits, but total combined support is typically capped at 75%-100% of project costs.

Case Studies & Practical Scenarios

Scenario 1: Cleantech Manufacturer
An Ontario manufacturer invests $400,000 in new energy-efficient production equipment. They receive a $120,000 federal Clean Tech ITC (30%), a $40,000 ON Clean Tech ITC (10%), and a $30,000 Save on Energy retrofit grant. Net cost: $210,000 after incentives. They maintain all invoices and claim forms for audit.
Scenario 2: Green Tech Startup
A Toronto-based startup develops AI-powered energy management software. They claim $80,000 in eligible payroll as SR&ED, getting $28,000 OITC and $28,000 federal SR&ED refund. They also receive a $50,000 demonstration grant from OCI for pilot deployment.
Scenario 3: Multi-Site Retailer
A retail chain upgrades seven Ontario locations with LED lighting and HVAC. Save on Energy rebates cover $35,000; remaining cost stacked with accelerated CCA and municipal green property tax reductions.

Audit Risk, Common Errors & Best Documentation Practices

Frequently Asked Questions (FAQ)

Can I claim both Ontario and federal credits for the same clean tech investment?
Yes, most Ontario credits and grants allow stacking with federal programs (such as the Clean Technology ITC or SR&ED), but total support may not exceed 75%-100% of costs. Always review program stacking rules and keep clear documentation.
What is the deadline to claim Ontario green tech credits?
Most credits must be claimed with your corporate tax return (T2) within six months of fiscal year end. Grants/rebates require pre-application and have specific program deadlines—check with the funding body.
What documentation is required for a credit/grant audit?
Keep all technical reports, invoices, proof of payment, contracts, photos, R&D logs, and copies of all claim forms. For grants, keep pre-approval letters and milestone reports. Maintain records for at least 7 years.
What if my project spans multiple provinces?
You may apportion costs and claim Ontario credits for the Ontario portion only. Maintain detailed allocation and ensure only eligible Ontario expenditures are claimed on Ontario schedules.
Are the Ontario Clean Tech ITC and OITC refundable?
The OITC is refundable for CCPCs, meaning it can generate a refund even if no tax is owed. The ON Clean Tech ITC is currently non-refundable but may be carried forward to offset future tax.
Can I claim for used equipment or only new?
Most clean tech credits require new equipment, but some retrofit grants/rebates allow for upgrades or re-use of assets. Check the program guidelines to confirm eligibility.
What happens if I miss a filing deadline?
Late tax credit claims may be denied. For SR&ED/OITC, you have 18 months after year-end to file an amendment, but for most grants/rebates, you must apply before starting the project—late applications are generally not accepted.

Official Resources & Internal Links

For a full directory of Ontario business credits, see Ontario Business Tax Breaks Directory. For clean tech credits in other provinces, visit Canada Green Tech Credits or use the navigation above.