Question Period Note: CLEAN TECHNOLOGY

What is the Government of Canada doing to support advances in clean technology and the adoption and commercialization of cleantech?

• Canadian clean technology companies are turning ideas into solutions that the world needs as it races towards net-zero.

• Budget 2024 continues to accelerate the transition to clean growth through new tax credits and the renewal of Canada’s Clean Growth Hub.

• These investments build on a suite of supports that are attracting new investments to Canada and creating good-paying jobs.

• They will also encourage clean tech companies to scale-up, maintain their operations, retain ownerships of intellectual property, secure jobs here in Canada and help the clean economy to thrive.

Budget 2024 delivers the Government’s plan to grow the economy by investing in the technologies, incentives, and supports to increasing productivity, fostering innovation, and attracting more private investment to Canada. Budget 2024 measures supporting the clean technology sector include:
A new Electric Vehicle Supply Chain investment tax credit

A new 10% EV Supply Chain Investment Tax Credit (ITC) on the cost of buildings used in segments of the EV supply chain, for businesses that invest in Canada across three key supply chain segments: EV assembly; EV battery production; and, cathode active material production. The ITC is expected to cost $80M over five years, starting in 2024-25, and an additional $1.02B from 2029-30 to 2034-35.

 
Funding for the Clean Growth Hub

The Clean Growth Hub is the federal government’s main source of information and advice on federal funding and other supports for clean technology projects in Canada. It supports thousands of companies and organizations, ranging from emerging small businesses to Canada’s world-leading cleantech companies. Innovation, Science and Economic Development Canada and Natural Resources Canada partner with 16 other departments and agencies to offer this one-stop shop to help businesses seeking to invest in Canada and create net zero growth navigate the federal government’s numerous clean economy programs and incentives—helping them discover new funding opportunities.

Budget 2024 has proposed to provide $6.1M over two years, starting in 2024-25, for the Clean Growth Hub. The funding will be used to continue to support clean technology stakeholders to identify and access relevant support and advice.

Funding for the Clean Tech Data Strategy

The Clean Technology Data Strategy provides information to measure the economic, environmental and social contributions of the cleantech sector in Canada. It consists of several data dashboards published by Statistics Canada that includes information on employment and labour force characteristics in the clean technology sector, the number of companies by industry and province, environmental protection expenditures, and international trade flows. This information strengthens the evidence base for decisions, improves understanding of the emerging cleantech landscape and ensures the creation of impactful policies and programs to support the production and adoption of clean technologies.

Budget 2024 has proposed $27M over five years, starting in 2024-25, to continue to develop and disseminate clean technology statistics and to leverage industry and administrative data.

Previous commitments

Budget 2023 delivers the government’s plan to further build Canada’s green economy through financial incentives designed to stimulate economic growth in Canada’s green economy, including investment tax credits, strategic financing and targeted programming.

Specific budget measures that support the cleantech sector include:

• A Clean Electricity Investment Tax Credit to support and accelerate clean electricity investment in Canada by providing a 15% refundable tax credit for eligible investments.
• A Clean Technology Manufacturing Investment Tax Credit worth 30% of capital investment costs in manufacturing equipment for cleantech and for activities related to key critical minerals.
• Modifications to the Clean Hydrogen Investment Tax Credit, Carbon Capture, Utilisation and Storage Investment Tax Credit and Clean Technology Investment Tax Credit.
• A reduced corporate tax rate for zero emission technology manufacturers.
• An additional $500 million to the Strategic Innovation Fund for cleantech and the re-alignment of $1.5 billion in existing resources toward cleantech, critical minerals and industrial transformation.
The 2023 Fall Economic Statement expanded the 30% Clean Technology Investment Tax Credit and the 15% Clean Electricity Investment Tax Credit to include systems that produce electricity, heat or both electricity and heat from waste biomass.

Canada Growth Fund

Budget 2023 announced that the Canada Growth Fund (CGF) will use carbon contracts for difference (CCfDs) to support clean growth projects and provide predictability to help de-risk major projects. The CGF will allocate up to $7B in capital to issue all forms of CCfDs and offtake agreements.

The CGF began operations in summer 2023 and announced its first investment in October 2023, providing $90M to Calgary-based Eavor Technologies to scale-up its emissions-reducing technology.

• Thirteen Canadian companies are featured in the Cleantech Group’s 2024 list of the 100 most innovative global clean technology companies, the second highest number of any country, behind only the U.S.

• The Canada Growth Fund investments in clean energy and clean technology are already building Canada’s strong, clean economy and creating good-paying jobs across the country.

• In 2022 alone, the cleantech sector employed more than 205,000 people.

• Clean technology businesses contributed more than $37.2 billion to the Canadian economy in 2022 and exported $9.8 billion in goods and services.

• Employees in cleantech are better paid than the average Canadian worker, and women account for 41% of all jobs employed in the cleantech sector.

• Budget 2024 also includes funding for the Clean Technology Data Strategy to continue measure the economic, environmental and social contributions of the cleantech sector in Canada.