According to a recent report, Canada’s clean technology projects are facing delays in receiving the promised incentives, putting over $50 billion worth of investments at risk. Prime Minister Justin Trudeau’s government had announced investment tax credits (ITCs) amounting to around $27 billion over five years to encourage investment in green technologies. However, more than a year later, there has been no progress in implementing these incentives.
The delay in providing these incentives is concerning for industries that have proposed investments awaiting approval. Bob Masterson, president and CEO of the Canadian Chemical Industry Association, stated that there are “well over $25 billion in proposed investments” in his industry alone. He also highlighted that companies may become impatient and turn their focus towards the United States where generous incentives have been available for some time.
The Canadian government initially announced $10 billion in ITCs for net-zero technologies and carbon capture and storage (CCS). This was followed by an additional $17 billion for clean hydrogen, electricity, and manufacturing. While some companies have already started investing with confidence that the money will eventually flow, many others are still waiting for the legislation to be enacted.
A Finance Ministry official mentioned that the consultation process took time because the government wanted to ensure correct legislation. However, they emphasized that approving the first set of ITCs is now a top priority. The retroactive application of these credits once fully legislated provides some assurance to businesses considering green investments.
For Prime Minister Trudeau, transitioning to a low-carbon economy is a significant part of his economic policy. These incentives play a crucial role in helping Canada achieve its goal of reducing net emissions to zero by 2050.
Several companies are eagerly awaiting these incentives to proceed with their environmentally friendly projects. Cement manufacturer Lafarge plans to capture 1 million metric tons of carbon emissions per year at its plant in Alberta but acknowledges that having ICTs would strengthen its business case and promote decarbonization investment in Canada. The Canadian Manufacturers & Exporters (CME) association, representing 2,500 companies, also stressed the urgency of implementing these incentives to compete with the United States.
The delay in providing ITCs has raised concerns about potential missed opportunities for Canada’s clean technology sector. For example, Dow Chemicals has a project in Alberta that could be the world’s first decarbonized petrochemical facility. However, if uncertainty regarding ICT persists, it may discourage other global chemical industry players from investing in Canada.
To ensure progress and attract investments, it is crucial for the Canadian government to address these delays promptly. Companies need clarity and certainty to make investment decisions this year. With an estimated $25 billion to $50 billion worth of green investments required over the next few years, Canada must act swiftly to maintain its competitiveness and position as a leader in clean technology.
The crux, while Canada’s commitment to clean technology projects is commendable, the delay in implementing promised incentives puts billions of dollars of investments at risk. It is essential for the government to prioritize approving and enacting these investment tax credits to provide businesses with certainty and encourage sustainable development. Failure to do so may result in missed opportunities and hinder Canada’s transition towards a low-carbon economy.
It is understood that: (https://globalnews.ca/news/9967804/canada-clean-tech-incentives/amp/)
