CanREA releases statement in support of 2023 federal budget
March 29, 2023
By Canadian Manufacturing
OTTAWA — Due to the Inflation Reduction Act passed last summer in the United States, the Canadian Renewable Energy Association (CanREA) advocated for refundable investment tax credits for renewable energy and green hydrogen investments. CanREA says they are excited to see tax credits strongly reflected in Budget 2023, presented by Federal Minister of Finance, the Honourable Chrystia Freeland.
“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,” said Evan Wilson, Senior Director of Policy and Government Affairs at CanREA, who was on site for the introduction of the Budget today.
The 2023 Budget includes the following measures to ensure Canada can accelerate the deployment of wind, solar, energy storage and other clean-energy technologies:
- Clean Technology Investment Tax Credit: A refundable 30% tax credit on capital cost of investments made by taxable entities in wind, solar PV and energy-storage technologies. This Credit will be available to all project spending starting today, March 28, 2023, though to 2034.
- Clean Electricity Investment Tax Credit: A newly announced, refundable 15% tax credit on the capital costs of investments made by non-taxable entities, such as Indigenous communities, municipally owned utilities and Crown corporations that make investments in renewable energy, energy storage and inter-provincial transmission and other non-emitting electricity infrastructure.
- Clean Manufacturing Investment Tax Credit: Budget 2023 also introduces a 30% refundable ITC for investment in machinery and equipment used to manufacture clean technology and extract relevant critical minerals. This tax credit is available for the manufacturing of renewable energy and energy-storage equipment, and the recycling of critical minerals.
- Clean Hydrogen Investment Tax Credit: A refundable 40% investment tax credit on green hydrogen, starting in Budget 2023.
- Net-zero Transmission Project Support: There will be an upcoming consultation on the “best means” to support intra-provincial transmission that support Canada’s net-zero grid objectives.
- Canadian Infrastructure Bank: Budget 2023 also includes $20 billion in support for Clean Electricity investments, including at least $10 billion through the Clean Power priority area and at least $10 billion through the Green Infrastructure priority area.
- Recapitalization of SREPs: The Smart Renewables and Electrification Pathways (SREPs) program will receive a total of $3 billion to support regional priorities and Indigenous-led projects.
- Canada Growth Fund: The Budget provides an enhanced commitment to carbon-price stability via new tools in the Canada Growth Fund, which will be managed by the Public Sector Pension Investment Board.
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