Owners of small and medium-sized companies looking to steer a course through the ins-and-outs of what green tax incentives and credits are available from governments can find themselves lost. And for individuals, there are myriad tax credits and breaks that cover a wide range of actitivies.

“There’s not an easy path — it takes a lot of research to figure out what’s going on,” says Leanne Sereda, a partner in the tax services department of PricewaterhouseCoopers LLP.

To a large degree, Canada’s two governments are developing green tax incentives and credits programs independently of each other, compounding the confusion for companies. Several key green tax credit programs designed to help firms, launched by both levels of government, stick out as particularly useful, however.

At the federal level, the most noteworthy green tax incentive programs are the Scientific Research & Experimental Development program and the Canadian Exploration Expense, Sereda says.

The SR&ED offers tax credits to every sector, including those that are implementing sustainable ways of operating. (All Canadian taxpayers, if they meet certain criteria, can claim a non-refundable credit against income tax equal to 20% of eligible expenditures BEING CONFIRMED). Certain private companies are eligible for a cash refund of 35% of the first $3 million of expenses, including those arising in respect of sustainability.

The SR&ED provides smaller companies with a tax credit they can use to reduce their federal income tax, and some small private firms can actually get part of that credit back in cash, Sereda says.

Meanwhile, the CEE allows companies to deduct the cost of initiatives which they can show are in support of renewable energy. They aren’t obliged to take the tax deduction in the year they receive it, but instead can carry it forward indefinitely. “Companies love it,” Sereda says.

Also worth mentioning are the federal environmental grants available from Sustainable Development Technology Canada, a program geared towards companies pursuing clean technology projects.

The SDTC not only provides financial assistance, but also a wide range of other kinds of help for fledgling firms looking for a boost, says Maria Mavroyannis, a Toronto-based senior manager at Deloitte & Touche LLP .Her specialty is green programs for technology, media, and telecommunications firms.

“For some of the earlier stage companies that I deal with, [the SDTC] actually assisted them in drafting a business plan,” Mavroyannis says.

Meanwhile, provincial governments are continuing to rollout green programs for both companies and individuals. Several haven’t fully articulated what they’re going to do, and how.

Here are the most noteworthy developments:

> British Columbia: The government launched its carbon tax July 1, which has been set up to be revenue neutral, with the carbon taxes being returned to individuals and businesses through personal and corporate income tax cuts.

> Manitoba: Introduced last year, the Green Energy Manufacturing Tax Credit is designed to promote the production and purchase of new equipment used to generate renewable energy. The refundable tax credit is set up to equal 10% of the value of qualifying equipment produced in Manitoba and sold for residential or commercial use in the province before 2019.

> Ontario: Canada’s largest province has opted to go for funding, rather than tax incentives. The Next Generation of Jobs Fund is a $1.15 billion program that offers funding to help firms create jobs in the areas of green products, efficient technologies, health cures and treatments.

NGJOF has three sub-programs: the Jobs and Investment Program, Biopharmaceutical Investment Program, and the Strategic Opportunities Program. The JIP Program funds 15% of eligible costs with a minimum investment of $25 million over five years or creation/retention of 100 jobs. The BIP Program funds 20% of eligible costs with a minimum project value of $5 million — the company must have at least one human drug patent. And the SOP Program, which is the newest program, funds 25% of eligible costs. Academic collaborations are required.

> Quebec: Launched last year, the province’s carbon tax program takes a different approach than the one taken by B.C. In Quebec, the roughly $200 million a year raised from gas and diesel fuel is used to fund their green sustainable projects.

> Nova Scotia: The province’s green energy tax credit, for tax years ending after June 30, 2006, offers corporations a tax credit equal to a total of 25% of the capital cost of acquisitions and/or additions to eligible equipment, located in the province, in a given tax year. The unused balance of the energy tax credit is non-refundable and may be carried forward seven tax years.

@page_break@For individuals, governments at every level are providing green tax incentives, usually in the form of rebates. These incentives typically help Canadians with either retrofitting their homes or investing in more environmentally friendly transportation. A good resource covering tax rebates in every province can be found at www.ec.gc.ca/incitatifs-incentives/index_eng.asp. There is also a federal tax credit of up to $150.00 for individuals using public transit. IE