The federal government is trying to capitalize on a latest era of “friendshoring” amongst democratic nations with a latest suite of unpolluted technology and natural resources investment incentives designed to try to maintain Canada competitive in an increasingly green-focused global economy.
In the autumn economic statement Thursday, Finance Minister Chrystia Freeland, who can be the country’s deputy prime minister, says the world’s economy is at a “turning point,” and that Canada will be poised to profit from this shift with its wealthy cache of resources which might be in high global demand.
“We’re entering an era of friendshoring — a time when our democratic partners and their most significant firms need to shift their dependence from dictatorships to democracies,” Freeland said in a prepared copy of her speech within the House of Commons.
“Now we have the natural resources to power the worldwide net-zero transition and to support our allies with their energy security as that transition continues to select up speed.”
Global economic tensions and a push amongst democratic countries toward net-zero economies underpin most of the latest initiatives outlined within the Trudeau government’s fall economic statement.
The document outlines how record-high inflation and rates of interest are slowing economic growth, but in addition how global forces similar to Russia’s war with Ukraine and provide chain woes have also been wreaking havoc with efforts to stabilize the fee of living for Canadians.
Canada just isn’t the one country grappling with these volatile global market conditions, but it could stand to profit from countries and personal sector firms looking to take a position in green technology and clean energy solutions as they appear to prioritize trade and investment with countries that share their values, Freeland said in her prepared remarks.
But america’ Inflation Reduction Act also appears to have played a task in spurring Canadian efforts to raised sustain with the U.S. on clean energy investments and incentives.
The bill includes nearly US$400 billion in tax incentives, grants and loan guarantees for clean energy sectors including electricity production, electric cars and battery manufacturing.
Ottawa has been seized with an absence of business investment in Canada lately, a senior government official told reporters Thursday.
The U.S. inflation bill, designed to drive foreign direct investment, has been a “game changer” that has created a “gravitational black hole” for foreign capital, the official said, describing it as an “aggressive and impressive industrial policy” from the U.S.
That’s why Thursday’s fiscal update includes measures aimed toward driving more investment in Canadian green technologies along with latest initiatives focused on clean power, electric vehicles, battery manufacturing and demanding minerals.
The autumn economic statement proposes a refundable tax credit equal to 30 per cent of the capital cost of investments in electricity generation and storage systems, including solar, wind and hydro solutions, in addition to low-carbon heating equipment, similar to heat pumps and solar heating.
This tax credit may also apply to industrial zero-emission vehicles and related charging or refueling equipment, similar to hydrogen or electric heavy-duty equipment utilized in mining or construction.
To qualify for the total 30 per cent credit, firms may have to stick to certain labour conditions to make sure “good jobs” are created consequently of this measure.
The fiscal update also outlines the design, operations, and investment strategy of the $15-billion Canada Growth Fund announced in Budget 2022.
The mandate of this fund can be to make investments to draw private sector investment in Canadian businesses and projects that reduce emissions in addition to speed up the event of key technologies, similar to low-carbon hydrogen and carbon capture and projects that capitalize on Canada’s natural resources.
In one other move aimed toward matching the U.S. inflation act, Ottawa has restated its commitment — announced in Budget 2022 — to determine an investment tax credit for clean hydrogen production.
In the approaching weeks, the Department of Finance plans to launch a consultation on how best to implement this tax credit based on the lifecycle carbon intensity of hydrogen.
Freeland says she believes the worldwide shift toward net-zero technologies and the trend of democracies banding together to scale back reliance on foreign dictatorships represents the “most vital opportunity for Canadian staff and Canadian businesses in a generation.”
“With major investment tax credits for clean technology and clean hydrogen, we are going to make it more attractive for businesses to take a position in Canada to supply the energy that can power a net-zero global economy,” Freeland said, adding the country is at “a pivotal moment.”
The worldwide green transition calls for an industrial transformation comparable in scale only to the Industrial Revolution itself, and Canada has the manpower, the natural resources and the manufacturing base needed to drive that transformation, she said.
“We will lead the worldwide economy in a way that far exceeds our footprint as a rustic of just 39 million people… But we cannot wait, because time truly doesn’t wait.”
In response to the fiscal update, Conservative Leader Pierre Poilievre derided Freeland’s guarantees to take a position in and promote Canada’s natural resources, accusing the Liberals of planning to present “corporate welfare” to mining firms while also making it too onerous to get extraction permits.
“Those mining firms who can fill their bank accounts with taxpayers’ money – in the event that they can’t get a constructing permit to dig the mine, they won’t give you the option to show it into anything aside from big fat boondoggles for taxpayers.”
He said Conservatives would as a substitute wish to repeal the Liberal government’s controversial environmental impact laws, often known as Bill C-69, and eliminate the carbon levy “in order that it’s actually possible for our industries to compete and for our people to afford energy on this country.”