Investing in a Green Economy: Canada’s 2023 Federal Budget
On March 28th, the Government of Canada released its annual Budget 2023: A Made-In-Canada Plan. This will provide a roadmap to the nation and indicate the key areas of focus in federal investment now and into our future. In a previous article, Partners in Project Green identified the urgency expressed in the IPCC AR6 Synthesis Report for intense climate action across all industries and nations. This year’s Federal Budget indicates significant investments to the green economy to work towards Canada’s goal of achieving net-zero emissions by 2050.
When it comes to lowering greenhouse gas (GHG) emissions, Canada is prioritizing actions such as electrification, clean energy generation, clean manufacturing, emission reduction, and the production and use of electric vehicles and batteries. In Chapter 3 of A Made-In-Canada Plan: Affordable Energy, Good Jobs, and a Growing Clean Economy , it is clear that business operations are key to addressing these green economy priorities. Below are four significant tax credits featured in the budget that you could be eligible for as you work increasing sustainable and efficient operations of your business:
- The Tax Credit for Clean Energy will offer a credit of 15% for investments in non-emitting electricity, natural gas fired electricity generation, and energy storage, available until 2034. Requirements to access the tax credit include a commitment by a competent authority that the federal funding will be used to lower electricity bills and a commitment to achieve a net-zero electricity sector by 2035.
- The Clean Hydrogen Investment Tax Credit will cover somewhere between 15 – 40% of eligible project costs; higher rebates will go to projects that produce the cleanest hydrogen. This credit will also extend a 15% credit to equipment needed to convert hydrogen into ammonia -in order to transport the hydrogen – granted that this ammonia production is associated with the production of clean hydrogen.
- The Investment Tax Credit for Carbon Capture, Utilization and Storage is available to businesses that invest in storing carbon dioxide or use it in other industrial processes, including storing CO2 in concrete. This also includes dual use heat and/or power equipment and water use equipment, with tax support prorated in proportion to the use of energy or material in the carbon capture, utilization, and storage process. The government intends to apply pending labour requirements to the Investment Tax Credit for Carbon Capture, Utilization, and Storage, coming into effect on October 1, 2023.
- There is expansion of the Clean Technology Investment Tax Credit to include geothermal energy systems and would be available to businesses investing in such property that is acquired and becomes available for use on or after the day of Budget 2023. Projects that will co-produce oil, gas, or other fossil fuels would not be eligible for the Clean Technology Investment Tax Credit. The 2023 budget also proposes to modify the phase-out of the Clean Technology Investment Tax Credit starting in 2034 and would not be available after that year.
Tax credits are beneficial to help make financing your efforts to minimize carbon-emissions related to your business operations. Learn more about accessing capital with Partners in Project Green’s part two and three of our Financing Net Zero series. Head to our Events Page for more information and to register.
Investing in Water
Canada is making commitments to invest in water quality and management. During President Biden’s recent visit to Canada, Prime Minister Justin Trudeau announced a historic investment of $420 million in new funding to protect and restore the Great Lakes. This initiative is focused on cleaning up a series of pollution hot spots. With three sites already remediated, it’s part of the Canadian government’s plan to clean up 12 of the 14 worst sites in the lakes by 2030.
Also featured in the Federal Budget is some historic funding to create a new Canada Water Agency based in Winnipeg. While details are still pending, this national agency set to start in 2024 is likely to focus on water science, water quality assessment and water management.
Complimenting these proposals is new funding for a strengthened Freshwater Action Plan to protect Canada’s other major watersheds. This plan will benefit future generations and people living around bodies of water who rely on them as their drinking water source, and people working in sectors such as tourism, agriculture, and fisheries that depend on freshwater for their livelihoods.
The Federal government is making these investments in programs and initiatives to make Canada more resilient to climate change and reach their net-zero emission targets. Your business is a part of the equation and Partners in Project Green is here to support you with knowledge, resources, and building a climate-resilient business community. Please make use of our Climate Resource Kit as it grows to help you understand the impacts and implications that climate change has on your business.
Partners in Project Green is strives to provide relevant content and resources to help our members, our subscribers, and the GTA business community understand how climate change will impact their operations and their bottom line. Reach out to us today to find out how our programs can support your work on sustainable business practices. Contact our Coordinator for Community Relations, Julia Kole at julia.kole@trca.ca for details.