Two years after the federal government began announcing what it calls “clean investment tax credits” to jump-start an anticipated net-zero investment bonanza, no company has managed to access the incentives.
The government says it is still finalizing the terms of the investment tax credits, or ITCs. Industry and other climate policy researchers say ITCs are needed to decarbonize Canada’s economy and achieve net-zero emissions by 2050.
The incentives, which could be worth $27 billion over five years, include refundable tax credits for clean electricity generation, hydrogen and carbon capture utilization and storage.
Some of these measures were announced as recently as March, while others, such as the clean technologies and hydrogen credits, were announced a year ago during the 2022 fall economic statement.
The carbon capture utilization and storage credit was announced way back in budget 2021.
Canada risks falling behind in the global race to attract billions of dollars in low-emission investments — especially given the rapid pace of the Biden administration’s efforts to green the U.S. economy — said NDP natural resources critic Charlie Angus.
NDP MP for Timmins-James Bay Charlie Angus says Canada risks being left behind in the race to create a low-carbon economy. (Spencer Colby/The Canadian Press)
“It seems like the Liberals are continuing to dawdle around and talk about it,” Angus told CBC News. “Meanwhile … the Biden administration is driving an economic transformation unlike anything we’ve ever seen.
“And we risk being left at the side of the road if we do not move quickly.”
Angus cited International Energy Agency (IEA) reports that predict a radically different energy market by 2030. The IEA projects thatby then, nearly half of the world’s electricity supply will come from renewable sources and heat pumps, and other electric heating systems will outsell fossil fuel systems.
“This is an industrial revolution that’s happening at an accelerated level. International investors are choosing where to go,” Angus said.
Angus’s comments echo a warning delivered by the Macdonald Laurier Institute policy think-tank this week.
During her testimony before a House of Commons committee, Heather Exner-Pirot, the institute’s director of natural resources, energy and the environment, told MPs the federal government developed the tax credits in response to the Biden administration’s Inflation Reduction Act (IRA).
The IRA is a multi-billion-dollar program that pledges government funding for developing low-carbon energy. The IRA looks to boost the country’s manufacturing sector and takes aim at China’s dominant position in the clean energy technology supply chain. The law is regarded as the most ambitious climate bill ever passed in the U.S.
The Commons standing committee on natural resources is looking at whether Canada’s clean energy plans meet the challenge posed by the IRA.
“As of today, none [of the ITCs] are in force,” Exner-Pirot told the standing committee. “Delays in finalizing the terms and conditions of each ITC through law effectively freezes capital and diminish Canada’s ability to achieve its emissions reductions targets.”
A fast charging station manufactured by Sumitomo Electric at Fully Charged Live, an electric vehicle (EV), renewable and clean energy and urban mobility exhibition, in Vancouver, B.C. on Sept. 8, 2023. (THE CANADIAN PRESS/Darryl Dyck)
While draft legislation has been published for the clean technology and carbon capture and storage tax credits, she said, the tax credits for hydrogen, clean manufacturing and clean electricity “remain conceptual.”
Freeland working to get the ITCs across the line
Finance Minister Chrystia Freeland was in Calgary Wednesday to announce the first investment from the government’s Canada Growth Fund — a $15 billion arm’s-length public investment vehicle to support Canada’s clean economy.
Through the fund, Ottawa will invest $90 million in the Calgary-based geothermal energy company Eavor Technologies.
Freeland suggested the investment tax credits will be finalized soon.
“Our government absolutely shares that sense of urgency, and you will hear more from us soon about getting all of those ITCs across the line and available for companies like this one,” Freeland told reporters.
In follow-up comments, Freeland’s senior communications adviser said tax credits for technology, manufacturing, and carbon capture, utilization and storage tax would be backdated — so some investments being made now could still qualify.
“The tax credits are retroactive, deliberately, as we know Canada cannot afford to miss out on this opportunity to build a thriving, sustainable, clean economy with economic opportunities for Canadians across the country,” said Katherine Cuplinskas in a media statement.
Finance Minister Chrystia Freeland takes part in a press conference in Ottawa on Tuesday, Oct. 17, 2023. (THE CANADIAN PRESS/Sean Kilpatrick)
Although Freeland hinted there could be more news about investment tax credits soon, the tax credits would still need to be tabled in legislation and approved by Parliament.
Meanwhile, companies are postponing investment decisions, said Green Party MP Mike Morrice.
“I am hearing directly from clean tech companies in my community that the decision to purchase and move ahead is being delayed,” said Morrice, the MP for Kitchener Centre.
“And that’s the real concern here and why it is so important for these tax credits to be put in legislation as soon as possible.”
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
