Budget 2023 offers $35B in green tax credits, still trails U.S. incentives
Global News
Trudeau's government has been under pressure to level the playing field with the U.S. since Washington passed massive uncapped incentives for clean energy investments last year.
Canada’s 2023 budget took a big step toward luring more investment in clean technology to build a low-carbon economy, analysts said on Wednesday, but gaps must still be filled to make the country more competitive with the United States.
The Trudeau government unveiled on Tuesday a series of new green investment tax credits worth some C$35 billion on Tuesday, including almost C$26 billion for producing and transmitting electricity.
“Given the role that electricity is going to play in the decarbonisation of the Canadian economy, this is probably the most important federal budget ever for addressing climate change,” said Francis Bradley, the chief executive of trade association Electricity Canada.
Before the budget, Canada was “in neutral,” Bradley said. “This puts us right up into second gear.”
Trudeau’s government has been under pressure to level the playing field with its largest trading partner since Washington passed massive uncapped incentives for clean energy investments in the (IRA) last year.
While the budget makes headway on the green transition, it does not put the kind of money on the table the United States has, said Michael Bernstein, executive director of climate think-tank Clean Prosperity. The IRA could offer more than $1 trillion to clean tech investors there.
Canada’s investment tax credits help companies make one-time capital expenditures, but the U.S. is offering ongoing production tax credits that cover operational costs.