On November 21, Chrystia Freeland, Deputy Prime Minister and Minister of Finance, delivered the 2023 Fall Economic Statement, including some notable support for the environment and clean energy solutions. However, there have been mixed reactions within the environment industry.
There was some good news. Freeland noted that inflation is coming down, wage increases are outpacing inflation, and private sector economists now expect Canada to avoid the recession that many had predicted.
However, in the face of a rapid global increase in interest rates, many Canadians are feeling the squeeze, so the economic statement attempts to address two key challenges:
First, with new, targeted measures to help stabilize prices, make life more affordable, and protect Canadians with mortgages. Second, the government is accelerating its work to build more homes, faster, and make housing more affordable.
When it comes to the environment, to reduce biowaste and support new affordable electricity and heat generation in Canada, the 2023 Fall Economic Statement proposes to expand eligibility for the 30-per-cent Clean Technology investment tax credit to include systems that produce electricity, heat, or both electricity and heat from waste biomass. The Canada Growth Fund is now operational and will begin investment in Canadian projects.
In addition, a plan for subsidizing carbon capture, utilization, and storage (CCUS) and net-zero energy projects – worth approximately $20 billion over five years – will foster support for hard-to-abate heavy industries looking to reach their net zero goals. If Parliament embraces this tax credit proposal, Canada will become one of the best places in the world to develop industrial carbon capture projects to meet emission reduction targets.
“Our economic plan is about building a strong economy that works for everyone, and this Fall Economic Statement is the next phase of our plan,” said Freeland. “With a focus on supporting the middle class and building more homes, faster, we are taking action on the priorities that matter most to Canadians today and we will continue doing everything we can to deliver for Canadians from coast to coast to coast.”
Clean energy producers have responded positively.
“We are pleased to see that Canada continues to provide a comprehensive and effective policy response to the U.S. Inflation Reduction Act (IRA). Today’s Fall Economic Statement builds on last year’s FES as well as Budget 2023, and makes progress in key areas vital for developing Canada’s clean energy sector,” said Trent Vichie, founder and chief executive officer of EverWind Fuels.
“Specifically, greater clarity on eligibility and timing for the Clean Technology ITC and Clean Hydrogen ITC will help ensure Canada attracts the investment and talent needed to be a global leader in clean energy. We are especially pleased to see new details and clarity regarding loan guarantees for Indigenous partnerships in clean energy projects.”
Vichie is also pleased to see that the Canada Growth Fund is operational and will begin investment in Canadian projects. “This could be transformative for Canada’s position in the global race, and help bring Atlantic Canadian projects online faster. This will generate widespread benefits for economies across Canada’s east coast as we create sustainable businesses bringing new revenues into Nova Scotia.”
Aniruddha Sharma, Chair and CEO of Carbon Clean.
Similarly, Aniruddha Sharma, chair and CEO of Carbon Clean is pleased with the increased support for CCUS that will turbocharge Canada’s efforts to achieve net zero emissions by 2050.
“Canada is keeping pace with the U.S. on incentives to spur investment in new, low-carbon technologies” said Sharma. “With this announcement, Canada is showing its commitment to leading on CCUS by embracing policies to spur upfront private investment before government funding starts to flow.”
Meanwhile, Climate Action Network Canada (CAN-Rac) is calling on the federal government to show leadership and invest in “all-in solutions” that respond to people’s needs and prioritize low-income households while reducing emissions.
“After a summer of record wildfires across the country that displaced hundreds of thousands of Canadians, it is puzzling that Minister Freeland’s speech today delivering the Fall Economic Statement made not even a single mention of climate action,” said Caroline Brouillette, executive director of CAN-Rac.
“The solutions are at our fingertips to cut households’ energy costs and reduce our dependence on fossil fuels: heat pumps, retrofits, convenient public and active transportation options. We need an ambitious spending approach that puts people first, addresses the housing crisis, takes advantage of the opportunities of transitioning to a clean economy, and makes sure big polluters do and pay their fair share.”
Brouillette adds that the commitment to amend the Competition Act to prohibit greenwashing is promising, and much-needed amid massive misleading advertising campaigns from big polluters.
However, she has her concerns: “It’s concerning to see that Minister Freeland’s strategy to build a clean economy locks in subsidies and tax breaks to the fossil fuel sector and emphasizes Investment Tax Credits that will direct public funds towards unproven and expensive solutions like Carbon Capture, Utilization, and Storage. The most effective way to reduce emissions from the oil and gas industry – Canada’s most-polluting industry – is by moving ahead with a strong emissions cap, with a clear target and no further delays.”
CAN-Rac also highlights that the inclusion of independent climate experts is crucial for a rigorous and credible green taxonomy that includes no fossil fuels – a key measure for avoiding stranded assets and aligning Canada’s financial sector with a zero-emissions global economy.
To read the complete Fall Economic Statement, click here.
Featured image: Unsplash/Rajesh Kavasseri
