Vancouver/Calgary/Montreal/Toronto, March 28, 2023. Canada Cleantech Alliance applauds the direction the federal government is taking with the 2023 Budget. With many initiatives that will help Canada build a competitive clean economy, it is a huge step forward, but there is still plenty of work to be done.
Beyond investments in clean electricity and infrastructure as well as the hydrogen economy, the budget introduces a 30% Manufacturing Investment Tax Credit (MITC) for investments in equipment used to extract and process critical minerals and to purchase equipment used in manufacturing along the entire EV supply chain, including for batteries. It also covers the production of components for clean energy generation and storage. Canada Cleantech Alliance advocated for the MITC in an open letter to Minister Freeland, signed by more than 100 Canadian clean technology CEOs. However, the scope of clean technologies eligible for the MITC is limited.
Canada Cleantech Alliance has also been advocating for a broader scope of clean technologies qualifying for the 30% Investment Tax Credit (ITC) that was detailed in the 2022 Fall Economic Statement. The budget is expanding its scope to include geothermal energy systems and complements it through a 15 % refundable ITC for clean electricity technologies, but a wide range of important clean technologies, especially circular economy solutions, are still missing. There is also no mechanism that allows for the inclusion of innovative new technologies that will no doubt be needed to reach our 2050 climate targets. Also missing from the suite of fiscal policy instruments that would allow us to better compete with the US is a production tax credit.
While the budget focuses on more established clean technologies through additional funding allocated to the Strategic Innovation Fund (SIF), it falls short on mechanisms to support pilots for emerging, innovative technologies, as well as their commercialization. Yet the global market for clean technologies beyond clean electricity and electrification is growing. As a result, Canada remains at risk of missing out on global market opportunities.
Quotes from Canada Cleantech Alliance Board Directors:
“Canada’s economic well-being and its global competitiveness are intrinsically linked. The 2023 Budget is an important step to secure both. The 30% Manufacturing Investment Tax Credit will make a big difference in this regard. Now we quickly need to fill the gaps and put the different pieces together in a meaningful way.” – Denis Leclerc, Chair, Canada Cleantech Alliance.
“I applaud the federal government on another important step towards achieving net zero. The investment and manufacturing tax credits in this budget are a huge step forward. However, it is important to note that the federal government can’t fix all of our challenges. It’s going to take trillions of dollars for us to reach our net zero objectives. We need decisive and collaborative action from all levels of government, as well as from the private sector and individuals. We all own this issue.” – Peter McArthur, Chair, Ontario Clean Technology Industry Association (OCTIA).
Interviews with Canada Cleantech Alliance’s Executive Director, Chair, and Directors available upon request.
About Canada Cleantech Alliance
Canada Cleantech Alliance is a Canadian coalition of 22 cleantech industry associations and accelerators representing over 2,000 cleantech manufacturers, innovators, investors, industry adopters and researchers across the country. It is governed by Clean Energy Canada, Écotech Québec, Energia Ventures, Foresight, the Ontario Clean Technology Industry Association (OCTIA) and the Smart Prosperity Institute.
Contact:
Maike Althaus, Executive Director, Canada Cleantech Alliance
Email: maike@canadaclean.tech
Phone: +1 647 984 0618