Ottawa considering tax credit restriction for clean electricity
Global News
Committing to a net-zero electricity grid is an easy move for six of the provinces, which are already more than 90 per cent of the way there.
The federal government is considering restricting billions of dollars in tax credits and grants for electricity projects to provinces that commit to the 2035 target for an emissions-free electricity grid.
The federal budget already made clear the restriction would be in place for the new refundable 15 per cent clean electricity investment tax credit, which is for investments in non-emitting electricity production, storage and interprovincial transmission.
But there are several other new investment tax credits for hydrogen production, clean technology and carbon capture and storage systems, worth tens of billions over the next 12 years. There is also at least $3 billion in grants for renewable electricity projects and technology upgrades to make the grid more efficient, and the federal government has promised to consider helping fund transmission lines inside provinces in certain situations.
A new document released Tuesday by Energy Minister Jonathan Wilkinson and Environment Minister Steven Guilbeault leaves the door opened to making provinces commit to the 2035 non-emitting electricity grid deadline to access those as well, at least for their applications to electricity projects.
“We certainly are considering that,” Wilkinson confirmed to The Canadian Press in an interview.
“But there is obviously consultation that’s going on with respect to the investment tax credits. We want to hear from people. We also want to think about if we’re going to put those kinds of constraints or strings on those things, how we best do that.”
The option could be the latest political grenade in the federal-provincial relationship when it comes to environmental matters.
The 2035 clean-power target will be enshrined in regulations, and Guilbeault is expected to publish the first draft of those rules as early as this week. They will spell out, for example, a timeline for natural gas power plants to be closed or fitted with carbon-capturing systems.