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Fall budget update promises tax credits for clean electricity and hydrogen production

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OTTAWA — Finance Minister Chrystia Freeland’s fall economic update creates two new federal tax credits for clean technology and low-emitting hydrogen production, with the caveat that companies that pay fair wages and train apprentices will get a bigger credit than those that do not.

The statement tabled in the House of Commons on Thursday is Freeland’s first big push to keep Canada in the clean-tech economy race in the shadow of the massive Inflation Reduction Act south of the border, and move Canada’s transition to a green economy further along.

“The green transition is the most significant economic transformation since the Industrial Revolution,” Freeland said.

The Inflation Reduction Act, signed into law in August by U.S. President Joe Biden, invests nearly US$400 billion in everything from critical minerals to battery manufacturing, electric vehicles, and clean electricity, including hydrogen.

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Experts and industry associations have been warning ever since that Canada would be shoved aside in the global competition for investment, skilled workers and materials if it did not step up and do more to match the U.S. investments.

Freeland said the fall update is just the “down payment on the work that lies ahead to respond to the inflation Reduction Act.”

Most of the heavy lifting to respond will need to wait until the Liberals introduce the next federal budget, expected in spring 2023.

But Freeland outlined in Thursday’s mini-budget the broad strokes of some of it, including launching consultations to design an investment program for electric vehicle and battery manufacturing and plans to create a new tax credit for companies that start producing low-carbon hydrogen.

That credit is being carved away from the clean-tech investment tax credit she said last April would be ready in time for this fall update.

Freeland made good on that promise, introducing an investment tax credit of up to 30 per cent for renewable electricity systems, industrial electric vehicles, energy storage systems and heat pumps. The credit will kick in the day the 2023 budget is tabled and Freeland expects it to cost almost $6.7 billion over the next five years.

The credit will be phased out starting in 2032 and end entirely in 2035.

Hydrogen was going to be included in that program but that is no longer the case. It will get its own tax credit of up to 40 per cent of the investments made to produce low-emitting or zero-emissions hydrogen. The size of the credit will be tied to the size of emissions from a production facility, with the final details worked out in time for the spring budget.

Mark Zacharias, the CEO of Clean Energy Canada, a renewable energy think tank at Simon Fraser University in Burnaby, B.C., said splitting the hydrogen credit out is a smart move because it mirrors what the U.S. did in the Inflation Reduction Act.

He said Canada’s tax credit isn’t identical, but along with clean tech credit, it will keep Canada competitive with the U.S.

“This (update) does help close the gap between the Inflation Reduction Act in the U.S. and make Canada a little bit more competitive in the clean technology space,” he said.

“I think it’ll catalyze climate spending in Canada, both public and private.”

Both tax credits will, for the first time, include labour conditions that make them more lucrative for companies that pay fair market wages and include apprenticeship training for young workers.

The idea was taken from the U.S. Inflation Reduction Act and Freeland said it is one of the most noteworthy policies in her economic statement.

“Our basic view is if the government is investing in businesses, encouraging them to do things that we need done … it is entirely reasonable, in fact, I would say long overdue, for us to say ‘and as you’re doing it, you need to be creating good paying jobs for Canadian workers.’”

Government officials indicated Thursday that if the labour conditions are successful in this initial context they likely will become a common part of any future government investment programs.

Freeland also used the update to release more details of the new Clean Growth Fund she promised in last spring’s budget, and says it will launch before the end of the year with $15 billion in startup capital.

The Liberals are hoping the fund will ease the risks of investing in emerging clean technologies and attract “substantial private sector investment.”

The update also includes some movement on the government’s promise to help retrain workers to succeed in clean technology companies, with $250 million over the next five years to create two new sustainable job training programs.

One would build a new training centre that could retrain 15,000 workers in low-carbon economy jobs, and the other would fund apprenticeship training through an existing union training program.

This report by The Canadian Press was first published Nov. 3, 2022.

 

Mia Rabson, The Canadian Press

 

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Trudeau 'extremely concerned' about report Canadian parts ended up in Iranian drones – National | Globalnews.ca – Global News

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Prime Minister Justin Trudeau is “extremely concerned” over a report Canadian-made parts have been discovered in Iranian drones used by Russia in its war on Ukraine.

Trudeau shared his worries with reporters in Ingersoll, Ont., Monday after the Globe and Mail reported on Sunday the discovery by a non-profit organization, Statewatch. Its “Trap Aggressor” investigation detailed last month that an antenna manufactured by an Ottawa-based Tallysman Wireless was featured in the Iranian Shahed-136 attack drone.

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Canada sanctions Iranian drone makers amid Russian strikes in Ukraine


Click to play video: 'Federal government ‘extremely concerned’ about report Canadian-made parts found in Iranian attack drones used in Russia: Trudeau'

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Federal government ‘extremely concerned’ about report Canadian-made parts found in Iranian attack drones used in Russia: Trudeau


The drones have been used recently by Russia in Ukraine as Moscow increases its strikes on the country’s energy and civilian infrastructure.

“We’re obviously extremely concerned about those reports because even as Canada is producing extraordinary, technological innovations … we do not want them to participate in Russia’s illegal war in Ukraine, or Iran’s contributions to that,” Trudeau said.

“We have strict export permits in place for sensitive technology that are rigorously enforced, and that’s why we’ve been following up with this company, that’s fully cooperating, to figure out exactly how items that we’re not supposed to get into the hands of anyone like the Iranian government actually ended up there.”

The Shahed-136 is manufactured by Shahed Aviation Industries, one of two Iranian drone makers Ottawa sanctioned last month for reportedly supplying Russia with its lethal drones. After denying reports it was supplying Moscow, Iran acknowledged for the first time on Nov. 5 it had sent Moscow drones before the Feb. 24 war began.


Click to play video: 'Russian missiles smash apartment block in Ukraine’s Mykolaiv: mayor'

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Russian missiles smash apartment block in Ukraine’s Mykolaiv: mayor


It denied continuing to supply drones to Russia. Ukrainian President Volodymyr Zelenskyy has accused Iran of lying, previously saying Kyiv’s forces were destroying at least 10 of its drones every day.

Aside from its Iranian-made engine, the Shahed-136 consists entirely of foreign components, Statewatch said in its report. It cited Ukrainian intelligence managing to identify more than 30 European and American companies’ components, with most parts coming from the United States.


A drone is seen in the sky seconds before it fired on buildings in Kyiv, Ukraine, on Oct. 17.


Efrem Lukatsky/AP

Drones like the Shahed are packed with explosives and can be preprogrammed with a target’s GPS coordinates. They can nosedive into targets and explode on impact like a missile, hence why they have become known as suicide drones or kamikaze drones.

Shaheds are relatively cheap, costing roughly US$20,000 each — a small fraction of the cost of a full-size missile.

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‘Game-changing’ drone warfare in Ukraine may tee up new phase of conflict: official

Drones “provide a critical capability” to exploit vulnerabilities in defences, and their use may be a prelude to a new phase in the conflict, U.S. Army Lt.-Col. Paul Lushenko previously told Global News.

Gyles Panther, president at Tallysman, told the Globe the company is not “complicit in this usage” and “is 100-per cent committed” to supporting Ukraine.

Ottawa is working to understand how the parts ended up in the drones, and wants to “ensure” incidents like this don’t “happen again in the future,” Trudeau said.

&copy 2022 Global News, a division of Corus Entertainment Inc.

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Available Nexus appointments Canada

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There’s good news for those looking to expedite their border crossing experience.

To mitigate the ongoing backlog issues at Canadian border crossings, border officials have reopened two Nexus and Free and Secure Trade (FAST) enrolment centres in Canada.

It’s the first time any Nexus and FAST offices have been open in Canada since the pandemic began, and federal officials say more offices will be opening in the future.

The Nexus program, which has over 1.7 million members, is designed to speed up the border clearance process for its members, while also freeing up more time for Canadian and U.S. border security agents to tend to unknown or potentially higher-risk travellers and goods.

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The benefit of Nexus is that it allows for those travelling between the two countries to save time, skipping long lineups and using the shorter, dedicated Nexus lanes when crossing the border, as well as designated kiosks and eGates at major airports, and quicker processing at marine crossings.

Reopening these two Canadian centres is the first phase of a larger plan to address the lengthy Nexus and FAST backlog, and will increase availability for applicants to book appointments to interview for Nexus pre-approval, the Canada Border Service Agency said in a statement Monday.

Those looking to get Nexus approval can now schedule interviews, by appointment only, at the Lansdowne, Ont. (Thousand Islands Bridge) and Fort Erie, Ont. (Peace Bridge) enrolment centres, through the trusted traveller programs portal.

Travellers looking to apply will still need to complete a new two-step process, and the Canadian offices don’t mean applicants won’t have to cross the border to finalize the process.

If conditionally approved for Nexus status, travellers can complete the first part of the interview at one of the two reopened Canadian enrolment centres, then complete the second interview portion just across the border at the corresponding U.S. enrolment centres on the other side. For Lansdowne, that’s Alexandria Bay, N.Y., and for Fort Erie, it’s Buffalo, N.Y.

To become conditionally approved, both the CBSA and U.S. Customs and Border Protection (CBP) have to grant approval prior to scheduling the interview portion, and interviews need to be conducted on both sides of the border.

“Nexus and FAST are a win-win for Canada and the United States – and we’re working hard to find creative solutions to reduce wait times, address the backlog and help more travellers get Nexus cards,” said Marco Mendicino, minister of public safety, in a press release. “This new, two-step process is further proof of our commitment to it. We’ll keep finding solutions that leverage technology and streamline renewals.”

Applicants also have the option to complete a one-step process and schedule complete interviews at enrolment centres in the U.S., which may be a preferred option for those who don’t live near the two centres currently open in Canada.

And those who are already members of the Nexus program and are awaiting an interview can renew their membership ahead of its expiry date in order to retain their travel benefits for up to five years.

More centres are expected to open at select land border crossings in the future, as this initial phase carries on, CBSA says.

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China slams U.S. Inflation Reduction Act for ‘disrupting international trade, investment’

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The Chinese Ministry of Commerce on Thursday criticized the U.S. for disrupting international trade and investment by adopting the Inflation Reduction Act (IRA), urging the U.S. to fulfill its obligations under WTO rules.

The criticism came after the Chinese delegation attending a meeting of the World Trade Organization (WTO) Council for Trade in Goods expressed serious concern over the ‘discriminatory and distorted subsidy provisions’ of the U.S. IRA, as well as its series of policies that disrupt the global semiconductor industry chain and supply chain.

The meeting of the WTO Council for Trade in Goods was held in Geneva between November 24 and 25.

Speaking at a press conference in Beijing, Ministry of Commerce Spokeswoman Shu Jueting said that China’s response is an exercise of its rights as a WTO member to challenge the trade measures of another member and their impact on such an occasion.

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“In its speech, the Chinese side expounded on the suspected violations of WTO rules by the relevant provisions of the U.S. law from a professional perspective, noted that the U.S. approach has seriously disrupted international trade and investment while undermining the stability of the global industrial and supply chains, and expressed grave concern over the U.S. application of double standards and acts of bullying regarding international trade rules,” Shu said.

“China urges the U.S. to strictly fulfill its obligations under WTO rules and earnestly safeguard the authority and effectiveness of the multilateral trading system,” she said.

Stressing that the world today is facing multiple challenges including setbacks in economic globalization and a sluggish economic recovery, Shu reiterated China’s commitment to opposing unilateralism and stabilizing global industrial and supply chains.

“China is ready to work with other members to follow through on the outcomes of the WTO 12th Ministerial Conference (MC12), engage fully and deeply in the reform of the WTO, stand against unilateralism and protectionism, and support the WTO in better playing its role, so as to contribute to stability of the global industrial and supply chains and recovery of the global economy at an early date,” said the spokeswoman.

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