The 2023 Fall Economic Statement (FES) released on Tuesday contains some good news for Canada’s clean technology sector. Ultimately, however, it falls short of what is needed. The FES recognizes the growing demand for affordable housing and the need for a response to spiking interest rates. However, it fails to make the connection between the clean technology sector and the role it can play in supporting affordable housing and in shielding homeowners from climate risks and related costs. At the same time, the FES provides some clarity on the timelines for the clean technology related tax credits announced in Budget 2023, but their rollout remains slow.
Given the FES focus on housing, Canada Cleantech Alliance would like to highlight that the Canadian cleantech sector with its innovative solutions can help address Canada’s housing crisis. Today, companies with related technologies include Carbon Cure, Carbicrete, Cogenerate Solar, Circuit Meter, Ecobee, Mysa, ZS2 and others. Any government spending for housing should be tied to making new and existing buildings more sustainable, more affordable, and more resilient to climate change.
With regards to the tax credits, Canada Cleantech Alliance welcomes the clarity on the implementation timelines. However, Canadian cleantech companies cannot afford to wait any longer. Without further details on how they will work, the risk remains that Canada’s most promising companies will move to where incentives are currently in place. In fact, many have already shifted their business focus and manufacturing to the United States.
The Alliance also welcomes the inclusion of technologies that help produce electricity or heat from biomass into the scope of the Clean Technology Tax Credit. However, there are many made-in-Canada solutions that can help our country reach its climate targets and contribute to a competitive economy. In particular, circular technologies such as waste heat to power can help decarbonize heavy industry and clean up the electricity grid.
In February 2023, Canada Cleantech Alliance had submitted an open letter, signed by several hundred cleantech CEOs, to Minister Freeland. The letter requests that the credits apply to a broader scope of clean technologies. The Alliance also included this request in this year’s pre-budget submission, as well as into its feedback on the legislative proposal for the 30% Clean Technology Investment Tax Credit.
“The Fall Economic Statement recognizes the need for affordable housing in Canada and we are glad to see progress implementing the cleantech investment tax credits that will help with the delivery of clean technologies that can build sustainable housing on a cost-effective basis. The adoption of clean technologies can reduce home operating and construction costs and reduce the environmental footprint of housing. We encourage the Government of Canada to expedite the passing and implementation of legislation regarding the proposed cleantech investment tax credits to keep innovative Canadian businesses in Canada and accelerate the deployment of the solutions that we need sooner than later. “- Peter McArthur, Chair, Ontario Clean Technology Industry Association (OCTIA) and Vice-Chair, Canada Cleantech Alliance.
“There is a broad range of Canadian solutions at our disposal that can reduce construction costs and mitigate the effects of climate change for the most vulnerable – with the right policies in place. It is not a question of addressing climate change or the housing crisis. Any policy and funding considerations need to address climate change and affordable housing at the same time! One leads to the other. They are not mutually exclusive.” Maike Althaus, Executive Director, Canada Cleantech Alliance.