Canada’s hydrogen sector welcomes Budget 2023

OTTAWA – Last October, the CHFCA and its members hosted the sector’s first Hydrogen Day on the Hill in Ottawa to meet with federal officials and discuss the need for regulatory, policy and funding support for hydrogen in Canada in response to the United States’ passage of the Inflation Reduction Act (IRA).

Today, the Canadian Hydrogen and Fuel Cell Association (CHFCA) and our 200 members across Canada are pleased to see hydrogen and a number of our recommendations reflected in the 2023 federal budget presented by the Honourable Chrystia Freeland, Canada’s Minister of Finance last week.

The federal budget confirmed the details of the Clean Hydrogen Investment Tax Credit (ITC), which is a refundable investment tax credit on clean hydrogen projects.  The credit offers varying levels of support between 15 and 40 per cent of eligible project costs, with projects that produce the cleanest hydrogen receiving the highest levels of support.  The Clean Hydrogen ITC will also extend a 15 per cent tax credit to equipment needed to convert hydrogen into ammonia in order to transport the hydrogen. The tax credit will only be available to the extent the ammonia production is associated with the production of clean hydrogen.

Further conversations and awareness will be necessary for clarity on specific details and we look forward to working with the government to advance the best ITC for the Canadian hydrogen industry.

“The CHFCA is committed to working closely with the federal government to promote a comprehensive understanding and support for all clean hydrogen production, storage, and transportation pathways,” says Ivette Vera-Perez, President and CEO of the CHFCA. “By adopting an inclusive and cross-sectoral approach, we will strive to ensure that Canada’s hydrogen sector can achieve scale and remain globally competitive.”

The 2023 Budget also included the following measures to ensure that Canada can accelerate the deployment of hydrogen and other clean-energy technologies:

    • Clean Technology Investment Tax Credit: A refundable 30% tax credit on capital cost of investments made by taxable entities in wind, solar PV and energy-storage technologies.  This Credit will be available to all project spending starting today, March 28, 2023, though to 2034.
    • Clean Electricity Investment Tax Credit: A newly announced, refundable 15% tax credit on the capital costs of investments made by non-taxable entities, such as Indigenous communities, municipally owned utilities and Crown corporations that make investments in renewable energy, energy storage and inter-provincial transmission and other non-emitting electricity infrastructure.
    • Canadian Infrastructure Bank:  Budget 2023 also includes $20 billion in support for Clean Electricity investments, including at least $10 billion through the Clean Power priority area and at least $10 billion through the Green Infrastructure priority area.
    • Canada Growth Fund: The Budget provides an enhanced commitment to carbon-price stability via new tools in the Canada Growth Fund, which will be managed by the Public Sector Pension Investment Board.

The Canadian Government’s support for hydrogen has increased steadily over the past year and has included the launch of the Hydrogen Strategy for Canada in 2020 along with funding support under the $1.5 billion Clean Fuels Fund and other budgetary commitments.  Provincial governments have expressed their commitment to hydrogen, including the release of hydrogen roadmaps in Alberta, Ontario and Quebec.

Earlier in January, the federal government launched its Indo-Pacific Strategy which seeks to position Canada as a key partner to Japan and other nations in the supply of hydrogen and critical minerals.  Last August, Canada also announced a new alliance with Germany to collaborate in the export of clean hydrogen and enable investment in commercial projects.

The CHFCA and its members will continue to collaborate closely with the federal and provincial governments to ensure that the country will maintain its global competitiveness and achieve its 2025 hydrogen export goals and 2030 targets set out in the national Hydrogen Strategy.


About the Canadian Hydrogen and Fuel Cell Association (CHFCA)

The Canadian Hydrogen and Fuel Cell Association (CHFCA) is a national sector association that supports industry, academia, government agencies, financial organizations and other stakeholders focused on hydrogen and fuel cell technologies and products. As the collective voice of Canada’s world-leading hydrogen and fuel cell sector, the CHFCA’s mission is to strengthen Canadian leadership, raise awareness of the benefits of the technology, and accelerate the adoption of its members’ products and services in Canada and abroad.  The CHFCA currently has nearly 200 members across Canada and regional affiliates in British Columbia, Alberta, Ontario and Quebec. The CHFCA can be followed on LinkedIn at @CHFCA, Twitter at @PoweringNow and visited at