Canada’s commitment to combat the climate crisis by working towards zero-emissions goals and transition to a greener future has been further solidified with the unveiling of the Federal Budget 2023, which was tabled on March 23 this year.
The budget includes almost $21 billion over five years in support towards clean technology projects and initiatives that will work towards research, development, and implementation of cleantech solutions, products, and processes to help lower emissions and meet climate goals.
These newly announced government funding programs for clean technology innovation projects will support Canadian businesses towards sustainability by improving their processes, products, and systems to lower emissions across all sectors in the country.
As Canada continues to position itself as global leader in clean technology innovation, the budget’s announcements signal a significant step towards promoting a low-carbon economy. This article will explore how the Federal Budget 2023 impacts the cleantech sector and the government’s key efforts introduced to drive this sustainable growth.
Want to learn more? Read our full breakdown of Canada’s Federal Budget 2023 for details including business funding announced federally and provincially available this year and in the future.
Green Electricity and Clean Energy Investments
Canada’s Federal Budget 2023 notes that Canada’s electricity demand is expected to double by 2050 and thus has placed a strong emphasis on green electricity and clean energy investments.
As part of those investments, the fiscal plan offers a clean electricity investment tax credit worth $6.3 billion over four years, along with billions of dollars more for a suite of other tax credits and measures.
“The choice to pursue investment tax credits for clean technology, like wind, solar, storage and green hydrogen, will allow Canada to take a competitive lead in accelerating the decarbonization of the energy sector.”
– Evan Wilson, Senior Director of Policy and Government Affairs Canada, CanREA
The new Clean Electricity Investment Tax Credit (ITC Credit) is a refundable 15% tax credit for eligible investments in:
- Non-emitting electricity generation systems such as wind, concentrated solar, solar photovoltaic, hydro (including large-scale), wave, tidal, nuclear (including large-scale and small modular reactors);
- Abated natural gas-fired electricity generation (which would be subject to an emissions intensity threshold compatible with a net-zero grid by 2035);
- Stationary electricity storage systems that do not use fossil fuels in operation, such as batteries, pumped hydroelectric storage, and compressed air storage; and/or
- Equipment for the transmission of electricity between provinces and territories.
“This budget takes significant strides toward building bigger, cleaner and smarter electricity systems across the country.”
– Rick Smith, President of the Canadian Climate Institute
The funding aims to increase Canada’s renewable energy capacity, reduce greenhouse gas emissions, and create jobs in the clean technology sector while also including measures to enhance energy efficiency in buildings and support the development of clean hydrogen, biofuels, and other clean energy solutions.
Electric Vehicles and Charging Infrastructure
As the adoption of electric vehicles continues to expand for the general population, the Canadian Federal Budget 2023 recognizes the need to support these goals to help combat the world’s ongoing climate crisis.
To support electric vehicle (EV) expansion, the budget introduces significant measures to promote the adoption of EVs and the development of charging stations across the country.
The budget proposes $2.5 billion over seven years to establish a network of EV charging stations across Canada to make it easier for Canadians to transition to clean electric transportation.
Furthermore, the budget introduces a new federal rebate program that provides consumers with up to $5,000 for purchasing an electric vehicle.
Accelerating Clean Technology Research and Development
Canada’s Federal Budget 2023 proposes $500 million over the next 10 years for the Strategic Innovation Fund (SIF) which focuses on advancing cleantech and sustainable solutions projects. Additionally, the budget provides $1.4 billion over five years for Natural Resources Canada (NRC) to support clean technology research and development.
“We are going to make Canada a reliable supplier of clean energy to the world, and, from critical minerals to electric vehicles, we are going to ensure that Canadian workers mine, and process, and build, and sell the goods and the resources that our allies need.”
Chrystia Freeland, Minister of Finance and Deputy Prime Minister
By encouraging the adoption of clean technologies, the government hopes businesses will take on more projects that will reduce greenhouse gases and create a greener economy.
Funding for Canada’s Clean Technology Business Sector
Canada’s Federal Budget 2023 demonstrates a strong commitment to advancing clean technology and addressing climate change. The budget’s provisions for green electricity, clean energy investments, electric vehicle adoption, charging infrastructure, and clean technology R&D highlight the Canadian government’s efforts to transition to a low-carbon economy by 2050.
Through significant Canadian funding programs and incentives, the Government of Canada aims to accelerate the deployment of clean energy projects, promote electric vehicle adoption, and foster innovation in clean technology.
These new measures not only contribute to reducing greenhouse gas emissions but position Canada as a leader in the global clean tech sector, driving economic growth, job creation, and a more sustainable future for all Canadians. Discover all Canadian Cleantech Funding Programsto see how your business could help join these efforts.