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Or sign-in if you have an account.The longer it takes for clean energy developers to receive a tax refund, the longer they must carry interest on loans used to finance renewable projects, raising the costs of further construction. Photo by Walter Bibikow/Getty ImagesA key federal program designed to reduce carbon emissions and spur investment in clean electricity has been beset by delays, with only a fraction of applications processed, government figures show.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe Clean Technology Investment Tax Credit is expected to cost tens of billions of dollars over the next decade and spur far more in investment, by giving developers that build solar, wind and other types of low-emission projects between 20 to 30 per cent of their costs back as a cash refund.But a backlog of unprocessed claims is building up, threatening to dampen the investment environment that the policy is intended to bolster.In the first 20 months since the tax credits were unveiled, between June 2024 and March 2026, the Canada Revenue Agency processed only 31 per cent or 396 of the 1,261 total claims valued at $1.2 billion that it received during that time, CRA figures show.Andrew Kennedy, chief financial officer at Toronto-based Capstone Infrastructure Corp., expressed concern that it has taken more than a year for the CRA to process a claim on what he described as a relatively small project for his company — the roughly 60 megawatt Buffalo Atlee wind turbine farm in Jenner, Alta.“That claim was just us getting up to speed and making sure we really understood how they were going to audit and review it,” said Kennedy.Now, he said he is more anxious as Capstone moves ahead on the single-largest project it has ever undertaken — the 192-megawatt Wild Rose Two wind project in Cypress County, Alta., southwest of Medicine Hat, which was commissioned last September.Kennedy said he filed a claim with the CRA in the spring, but is still waiting for an audit to begin. The length of time it takes the CRA to process a tax credit is important because the longer it takes for a project developer such as Capstone to receive a cash refund, the longer they must carry the interest on loans used to finance their projects. That in turn raises the costs of building projects.“My request (to CRA) has been, as you get more familiar with this, please start changing this so that you’re not waiting to audit everything until the last invoice is reviewed,” he said. “You’re just adding costs to projects, and if this is how you keep progressing, this will get priced in and ratepayers potentially pay more.”This spring, KPMG released a memo to clients that was viewed by the Financial Post and described the CRA as “severely backlogged” on processing clean economy tax credit claims —which also include carbon capture, EV battery manufacturing and other types of projects.The memo further advised that all clean economy tax credits claims are being audited by the CRA, and that for clean technology ITCs, roughly 30 per cent are being adjusted downwards and another 30 per cent are being rejected outright.In a statement, the CRA acknowledged that there is a backlog and said the agency needed time to ramp up.“Processing volumes were lower during the early stages as capacity was being established,” the CRA said in a statement. “Capacity has since increased, including the addition of approximately 60 staff, and timelines are now improving as the backlog is gradually resolved.”A CRA spokesperson declined to say how long it takes on average for a claim to be processed. The investment tax credit program comes as Canada is entering a period of unprecedented electricity demand growth.According to the Canada Energy Regulator (CER), electricity demand could double by 2050 as a result of data centres, population growth and the transition away from fossil fuels.Prime Minister Mark Carney has identified electrification as a cornerstone of his vision for the Canadian economy, and in May, unveiled a national electricity strategy to expand the grid.“The path to affordability is electrification; the path to competitiveness is electrification; the path to net zero is electrification,” Carney said at the time. “Electrification underpins everything, our emissions, our environment, our economy.”Against that backdrop, some environmental advocates have been dismayed by the slow rollout of the clean investment tax credits for renewable energy. Others, however, said that the CRA’s careful approach makes sense, given that the tax credits result in a cash refund back to project applicants, and so any errors could quickly stir political controversy and endanger the program.In the end, many in the industry said they want to be patient with the CRA while it learns how to manage the tax credit.“I wouldn’t say we’re anywhere close to a boom,” said Fidel Reijerse, president of RESCo Energy Inc., an engineering and construction firm that specializes in solar projects. “But I’d say it’s definitely helped get projects across the line financially.”He added that it’s still early days, and expects that processing times will move quicker as time progresses.“This is the most dynamic we’ve seen the Canadian renewable energy landscape in a long time,” said Etienne Lecompte, chief executive of Local Content Assurance Bureau (LCAB), which advises renewable energy developers on the regulatory framework. “We’re going to see a huge investment come into Canada because of those tax credits.” Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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