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Canada’s clean technology industry is at risk of losing C$50 billion in investments due to delays in implementing promised government incentives, according to industry groups.
Prime Minister Justin Trudeau’s government has pledged C$27 billion in investment tax credits (ITCs) over five years to spur investment in green technologies, partly in response to the generous incentives that have been on offer in the United States for more than a year.
The ITCs are part of the government’s plan to transition to a low-carbon economy and achieve net-zero emissions by 2050. The incentives are designed to help companies invest in clean technologies such as wind and solar power, carbon capture and storage, clean hydrogen, and electric vehicles.
However, the implementation of the ITCs has been delayed, and none of the money has yet flowed. This is causing frustration among businesses in the clean technology sector, which are eager to invest in new projects.
“Companies are going to get pretty tired of waiting around given the certainty that they do have in the U.S.,” said Bob Masterson, President and CEO of the Chemistry Industry Association of Canada.
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The government says the consultation process for the ITCs has taken time because it wants to get the legislation right. However, industry groups say there is urgency, as companies are making investment decisions now.
“CME members are going to need to make between C$25-C$50 billion in green investments over the next four or five years to compete with the United States,” said Dennis Darby, President of Canadian Manufacturers & Exporters.
The delay in implementing the ITCs is also putting Canada at risk of falling behind other countries in the race to develop and deploy clean technologies. The United States, China, and the European Union are all investing heavily in clean tech, and they are already ahead of Canada in many areas.
The government has said it is committed to getting the ITCs in place as soon as possible, but it is unclear when the first set will be passed. In the meantime, some companies are already investing on the promise of future incentives.
However, others are holding off, and industry groups warn that further delays could cost Canada billions of dollars in investment and put thousands of jobs at risk.
In addition to the financial risks, the delay in implementing the ITCs is also sending a negative message to the global community about Canada’s commitment to climate action. At a time when the world is facing a climate crisis, Canada needs to be a leader in the development and deployment of clean technologies.
The government should expedite the implementation of the ITCs and show the world that Canada is serious about climate action.tuneshareGoogle it