Economic statement points to supply sided agenda: Sean Speer
The federal government put a spotlight on its plans to improve investment in sustainable energy in its Fall Economic Statement on Thursday.
Finance officials said with the United States recently introducing the Inflation Reduction Act, “the need for a competitive clean technology tax credit in Canada is more important than ever.”
TAX CREDIT ANNOUNCEMENTS
The Fall Economic Statement proposed a refundable tax credit for clean technologies and hydrogen production.
The technology-focused credit would be “equal to 30 per cent of the capital cost of investments” for a range of clean electricity generation systems and equipment.
Companies will be expected to follow certain labour conditions such as paying wages based on local job conditions and creating apprenticeship opportunities. If they fail to meet those conditions, they would only be eligible for a 20 per cent tax credit. It is expected to cost the government $6.7 billion over five years starting in fiscal 2024.
“The credit would be available as of the day of Budget 2023 and no longer in effect at the start of 2035, subject to a phase-out starting in 2032,” it said in the economic statement.
Finance officials also said it’s following through with its previously-announced investment tax credit for clean hydrogen production.
The Department of Finance will launch a consultation on how to best implement the credit in the coming weeks.
“The proposed investment tax credit will be refundable, and available for eligible investments made as of the day of Budget 2023. The credit will be phased out after 2030,” it said in the economic statement.
INVESTING IN SKILLS
The federal government announced plans to provide $250 million over the next five years to Employment and Social Development Canada, to “help ensure Canadian workers can thrive in a changing global economy.”
The money would be allocated to a Sustainable Jobs Training Centre, a new stream of jobs under the Union Training and Innovation Program, and the Sustainable Jobs Secretariat, which would provide up-to-date information on federal programs.
The federal government also proposed $60 million over the next three years to “create new supplemental supports to existing federal and provincial or territorial programming.”
The skills investments will both start next year and additional details will be announced in the first half of 2023.
CANADA GROWTH FUND
Ottawa also expanded on how it plans to implement the Canada Growth Fund, set to be formally created in the first half of 2023.
The government said the fund’s goal is “to help to attract private capital to invest in building a thriving, sustainable Canadian economy with thousands of new, good-paying jobs.”
Finance officials said the investments will help Canada meet policy goals such as reducing emissions, accelerate the development of clean technology and capitalize on Canada’s natural resources.