Industry groups welcome $10 billion in Ottawa budget update
Canada’s leading mining industry group and green energy think tank welcome nearly $10 billion in tax credits for clean tech, improved mining project approvals, innovation research and industry training announced in a federal budget update.
Ottawa is offering $6.7 billion in tax credits over five years for up to 30% of investments in clean technologies like battery storage, electric industrial vehicles and small nuclear reactors, according to the Ottawa Economic Statement. fall of the Liberal government released Thursday.
It also provides $1.28 billion over six years to several federal departments, including the Impact Assessment Agency, to speed up the project approval process; $962.2 million over eight years to modernize the National Research Council; and $802.1 million over three years for the Youth Employment and Skills Strategy.
“This investment tax credit will benefit the Canadian mining industry in several ways as the deployment of zero-emission vehicles and solutions without greenhouse gas emissions accelerates in our sector,” said Pierre. Gratton, president and CEO of the Mining Association. of Canada, said in a press release. “This tax credit will help our sector achieve its climate action priorities.
Mark Zacharias, executive director of Clean Energy Canada, a Vancouver-based research group at Simon Fraser University, said the tax credit was an appropriate response to the United States boosting its own energy industries. clean energy with US$1.7 billion in incentives in recent legislation by the Biden Administration.
“Canada simply had to react,” Zacharias said in a statement after the budget update. “It is an acknowledgment of a global reality in which our largest trading partners are charting their own industrial futures and planting flags.”
Canada is among Western nations trying to boost and protect the critical mineral industries it needs for a clean energy transition that would cost trillions of dollars globally. Ottawa announced a national critical minerals strategy in April, which it plans to update by the end of the year, and toughened rules on foreign investment last month. This week he ordered three China-based companies, which control some 80% of rare-earth elements in world markets, to divest themselves of Canadian projects.
Federal Natural Resources Minister Jonathan Wilkinson said on Oct. 25 that Canada would respond to US tax incentives in its Inflation Reduction Act. Wilkinson, who served on the board of Hydrogen and Fuel Cells Canada, also spoke about the need to promote the hydrogen industry in Canada.
Zacharias and Gratton welcomed the budget update’s increase to 40% of a previously announced investment tax credit for clean hydrogen.
Wilkinson and his provincial counterparts such as Ontario Mines Minister George Pirie have said Canada needs to reduce its mine approval times. Gratton criticized the Federal Impact Assessment Agency for an “unsatisfactory job” of reviewing projects.
“It is imperative that more knowledgeable subject matter experts, rather than just more staff, be hired,” Gratton said. “Canada has had tremendous success in attracting new investment into the battery value chain with the promise of a reliable supply of battery materials, and now we need to deliver on that promise.
Zacharias said Ottawa’s increased clarity on its policies to foster clean energy innovation and improve training is needed to improve Canada’s competitiveness.
“The idea that climate action is also economic action has never been truer,” Zacharias said. “We had climate plans with economic benefits. It’s economic planning with climate benefits.