Federal government outlines $83B in clean economy tax credits in bid to compete with U.S. incentives
Federal government outlines $83B in clean economy tax credits in bid to compete with U.S. incentives
OTTAWA -
Serious money is heading for Canadian industries looking to reduce emissions after the federal government unveiled its answer to the U.S. Inflation Reduction Act.
The spending commitments announced in Tuesday's federal budget include tax credits for investments in clean electricity, clean-tech manufacturing, and hydrogen that together are expected to cost some $55 billion through to the 2034-35 fiscal year.
Total tax incentives amount to almost $83 billion over that timeframe when the carbon capture and storage and clean-tech investments credits announced last year are factored in, both of which saw minor boosts this round.
The government says the funding is necessary to boost clean economy spending from some $15 billion a year to the $100 billion a year needed. The spending is also needed to not fall behind as other countries roll out subsidies, most notably with the US$369 billion contained in the landmark U.S. legislation passed last year.
"In what is the most significant economic transformation since the Industrial Revolution, our friends and partners around the world, chief among them the United States, are investing heavily to build clean economies," said Deputy Prime Minister Chrystia Freeland as she introduced the budget.
Tax credits are the backbone of the effort because they are stable and efficient way to roll out government support, while leaving decision-making with the expertise of the private sector, said a senior government official in the budget lockup.
Clean electricity is the biggest focus of the credits, costing $6.3 billion over the first four years starting in 2024, and $25.7 billion through to the 2034-35 year. Notably, provincial utilities and Indigenous-owned corporations will be eligible for the credits.
The spending is meant to help spur both more generation, as well as a better-connected east-west grid to meet the expected doubling of electricity demand by 2050.
The clean electricity package is where the government has likely done enough to meet its goals, said Michael Bernstein, executive director of Clean Prosperity.
Other funding areas however, including the $11.1 billion in credits for manufacturing and $12.4 billion for carbon capture through to 2034, likely aren't enough to close the gap with what the U.S. is offering, he said.
"It really is one of those situations where your competitor has stepped up and said we are going to be providing an almost unthinkable amount of money."
Canada has opted for construction-focused project support, while the U.S. IRA covers operational costs with payments based on production volumes. It's like Canada is offering a single large cup of soda, whereas the U.S. is offering endless kiddy-cup sized refills, meaning Canada needs to offer a pretty big cup to compete, said Bernstein.
Since it's not covering operations, Canada needs to move quickly on offering the carbon pricing backstop that it's promised to develop in the budget, he said.
The so-called contracts for difference would provide certainty to industry on future carbon pricing and credits, but so far they're still in consultation, as are several other key policies.
"What surprised me was how many things are still left to be determined," said Rachel Samson, vice-president of research at the Institute for Research on Public Policy.
Along with the contacts for difference, she noted that details are scarce about how the $15 billion Canada Growth Fund will be spent.
The government announced in the budget that the fund will be administered independently by the Public Sector Pension Investment Board, with money starting to flow in the first half of the year, but didn't provide guidance on priority areas.
Samson said it was good the government isn't trying to direct the money itself, but worried that pension fund managers are too cautious to put the money in the bold projects needed.
"We need projects that are more on the cutting-edge, that are riskier."
The government also pushed down the road any commitments on biofuels such as sustainable jet fuels, which surprised Samson as Canada is currently exporting the raw wood pellet feedstock and knows companies have projects ready to go.
The budget was also notable for what wasn't in it for the oil and gas industry. While it did tweak last year's carbon capture incentives, it didn't go as far as some were pushing for, while the emissions cut-off for hydrogen production will likely exclude most carbon-capture based hydrogen projects.
"Oil and gas did not get a lot of what I think it wanted in this," said Samson.
The lack of funding comes as climate advocacy groups have pushed against support for both programs as wasteful projects that don't achieve the emission cuts needed in the near term, while also pushing against support for an industry that has reported record profits.
The government has also framed the budget as one of fiscal restraint that it hopes will allow private capital to do much of the heavy lifting to keep Canada in the running.
"Canada must either meet this historic moment, this remarkable opportunity before us, or we will be left behind as the world's democracies build the clean economy of the 21st century," said Freeland.
This report by The Canadian Press was first published March 28, 2023.
A New Democrat MP is trying to convince his colleagues to change the rules that govern the House of Commons in a series of ways he says would instill 'democratic controls' on the prime minister's 'unfettered' powers.
Monday morning, the Public Service Alliance of Canada announced it had reached a 'tentative' agreement with the federal government for the 120,000 picketing Treasury Board workers who, since April 19, had been engaged in one of the largest strikes in Canadian history. Here's a rundown of the developments from Parliament Hill as they happened.
The House committee studying foreign election interference heard from top 2019 and 2021 Liberal and Conservative campaign directors on Tuesday, with party officials from both camps speaking about the need for politicians to come together to address any "legislative gaps" ahead of the next vote.
In the 2023 federal budget, the government is unveiling continued deficit spending targeted at Canadians' pocketbooks, public health care and the clean economy.
U.S President Joe Biden and Prime Minister Justin Trudeau have announced updates on a number of cross-border issues, after a day of meetings on Parliament Hill.
Danielle Smith's win in the Alberta election hands her the most starkly divided province confronting any premier in Canada, writes commentator Don Martin.
Special rapporteur David Johnston didn't recommend public inquiry knowing it was a pathetically insufficient response for a foreign democratic assault of this magnitude, writes Don Martin in an exclusive column for CTVNews.ca.
To frame a few new illustrations on pages tucked inside a passport as proof of a Liberal plot to purge the Canadian historical record seems like a severe stretch, writes Don Martin in an exclusive column for CTVNews.ca.
Public Safety Minister Marco Mendicino is a bright former federal prosecutor, who was destined to be a star in Justin Trudeau's cabinet. But in an opinion column on CTVNews.ca, Don Martin argues Mendicino has taken a stunning fall from grace, stumbling badly on important issues just 18 months into the job.
It's the most peculiar of elections with the frontrunner and her main opponent being the same person, writes columnist Don Martin. 'In the looming Alberta showdown, it's Premier Danielle Smith versus her mouth.'
Although remote work has cleared the way for workplace flexibility, allowing employees to work in various locations (and climates), a new study suggests it’s taking a serious toll on work-life balance.
The Nova Scotia government says it is investigating the theft of personal information stolen through a global privacy breach to a third-party file transfer system the province was using.
Quebec provincial police (SQ) have identified the adult victim of a fishing incident that claimed five lives over the weekend, most of them children. Keven Girard, 37, was among a group of 11 people swept up by the tide late Friday night while fishing along the shore in Portneuf-sur-Mer, a village about 550 kilometres northeast of Montreal.
A wildfire that tore through homes and businesses in the Halifax area is 100 per cent contained, but a historic fire in southwestern Nova Scotia remains out of control.
Natural Resources Minister Jonathan Wilkinson says the federal government is not ruling out finding ways to achieve net zero sooner than the existing 2050 goal, but would not say whether there would be a definitive commitment to move up the target.
Apple appears poised to unveil a long-rumoured headset that will place its users between the virtual and real world, while also testing the technology trendsetter's ability to popularize new-fangled devices after others failed to capture the public's imagination.
A Ukrainian man rushed to his home outside the central city of Dnipro in hopes of rescuing his family, only to find his two-year-old daughter dead and wife seriously wounded as he helped pull them from the rubble of their apartment destroyed in one of Russia's latest airstrikes of the war, authorities reported Sunday.
The derailment in eastern India that killed 275 people and injured hundreds was caused by an error in the electronic signalling system that led a train to wrongly change tracks and crash into a freight train, officials said Sunday.
Quebec provincial police (SQ) have identified the adult victim of a fishing incident that claimed five lives over the weekend, most of them children. Keven Girard, 37, was among a group of 11 people swept up by the tide late Friday night while fishing along the shore in Portneuf-sur-Mer, a village about 550 kilometres northeast of Montreal.
The Nova Scotia government says it is investigating the theft of personal information stolen through a global privacy breach to a third-party file transfer system the province was using.
Allowing new Canadians to take the oath of citizenship by clicking a box online is a disgusting idea that will cheapen the process and open the door to fraud -- or a forward-thinking notion that will help decrease a backlog of citizenship applications, depending on who you ask.
A wildfire that tore through homes and businesses in the Halifax area is 100 per cent contained, but a historic fire in southwestern Nova Scotia remains out of control.
Wildfires in northwestern Quebec prompted thousands to evacuate the area over the weekend, as the number of blazes pushed past 140 and the military geared up to fight the encroaching flames -- even as that threat eased slightly Sunday on the North Shore.
The number of forest fires in northern Ontario continues to grow with a total of 48 active fires in the region, including 33 that are not yet under control. Only two months into the fire season and there have already been more than double the total number in 2022.
The derailment in eastern India that killed 275 people and injured hundreds was caused by an error in the electronic signalling system that led a train to wrongly change tracks and crash into a freight train, officials said Sunday.
China tightened access to Tiananmen Square in central Beijing on Sunday, the anniversary of the military suppression of 1989 pro-democracy protests that left a still unknown number of people dead and discussions and commemorations forbidden within the country.
China's defence minister defended sailing a warship across the path of an American destroyer and Canadian frigate transiting the Taiwan Strait, telling a gathering of some of the world's top defence officials in Singapore on Sunday that such so-called 'freedom of navigation' patrols are a provocation to China.
Russian forces declared victory in Bakhmut last month after the longest, deadliest battle since their full-scale invasion of Ukraine began 15 months ago, but Ukrainian defenders aren't retreating. Instead, they are keeping up the pressure and continuing the fight from positions on the western fringes of Bakhmut.
NATO Secretary-General Jens Stoltenberg made no breakthrough on Sunday in talks about Sweden's membership in the military organization with Turkish President Recep Tayyip Erdogan, with officials from the two countries to meet in just over a week to try to bridge their differences.
Natural Resources Minister Jonathan Wilkinson says the federal government is not ruling out finding ways to achieve net zero sooner than the existing 2050 goal, but would not say whether there would be a definitive commitment to move up the target.
Jenny Kwan has been outspoken against human-rights violations by the Chinese Communist Party and often advocates for the country's Uyghur Muslim minority. The Hong Kong-born member of Parliament said in an interview with The Canadian Press that that's what made her an 'evergreen' target of the Chinese government.
New study finds increase in antipsychotic drugs use in long-term care homes across Canada, despite no significant increase in behavioural symptoms – something that may expose a potential area of concern for quality of care, researchers say.
The number of people in Canada with inflammatory bowel disease is increasing rapidly and is expected to grow to 470,000 by 2035, according to a new report from Crohn's and Colitis Canada.
Racial bias built into a common medical test for lung function is likely leading to fewer Black patients getting care for breathing problems, a study published Thursday suggests.
Apple appears poised to unveil a long-rumoured headset that will place its users between the virtual and real world, while also testing the technology trendsetter's ability to popularize new-fangled devices after others failed to capture the public's imagination.
The Nova Scotia government says it is investigating the theft of personal information stolen through a global privacy breach to a third-party file transfer system the province was using.
Constructed by a team at London, Ont.’s Western University, a tiny satellite — roughly the size of a Rubik’s cube — will ride aboard a SpaceX mission bound for the International Space Station.
'Spider-Man: Across the Spider-Verse' opened in U.S. and Canadian theatres with a massive US$120.5 million, more than tripling the debut of the 2018 animated original and showing the kind of movie-to-movie box-office growth that would be the envy of even the mightiest of Hollywood franchises.
Apple appears poised to unveil a long-rumoured headset that will place its users between the virtual and real world, while also testing the technology trendsetter's ability to popularize new-fangled devices after others failed to capture the public's imagination.
Saudi Arabia will reduce how much oil it sends to the global economy, taking a unilateral step to prop up the sagging price of crude after two previous cuts to supply by major producing countries in the OPEC+ alliance failed to push oil higher.
A tanker transporting crude oil broke down in a single-lane part of Egypt's Suez Canal on Sunday, briefly disrupting traffic in the global waterway, Egyptian authorities said.
Constructed by a team at London, Ont.’s Western University, a tiny satellite — roughly the size of a Rubik’s cube — will ride aboard a SpaceX mission bound for the International Space Station.
The joy Paul Maurice felt on the morning of the start of the Stanley Cup Final was also tinged with sadness. The veteran coach knew there were only at most seven more games left to play.
Max Verstappen had warned that his Red Bull team was good enough to win every single race of the Formula One season. On Sunday he took one more step toward that ambitious sweep by easing to victory at the Spanish Grand Prix.
The prospect of Fernando Alonso ending a decade-long wait for his 33rd Formula One win in front of tens of thousands of fans at his home race proved too good to be true on Sunday.
America apparently needs more car seats. So, when Volkswagen unveiled the ID. Buzz, a retro-styled electric van, last year, it noted that the version for the North American market would be longer and would have three rows of seats.
Max Verstappen had warned that his Red Bull team was good enough to win every single race of the Formula One season. On Sunday he took one more step toward that ambitious sweep by easing to victory at the Spanish Grand Prix.
