Clean Technology Canada

Manufacturers react to the proposed Ont. and federal budgets

April 27, 2023
By Canadian Manufacturing

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On Mar. 23, the Ont. government announced its proposed provincial budget, naming a 10 per cent refundable Corporate Income Tax credit to help local manufacturers lower their costs, invest in workers, innovate and become more competitive.

On Mar. 28, the federal government announced a number of proposed provisions for cleantech manufacturing:

  • Clean Technology Manufacturing Investment Tax Credit matches similar manufacturing credits found in the IRA and addresses some concerns about potential lost investment in Canada.
  • Clean Electricity Investment Tax Credit will help Canadian manufacturer’s transition to net-zero production.
  • Funding to improve immigration backlogs, extended support for Work-Sharing, and funding to increase work integrated learning spaces were all CME asks to improve labour shortages.
  • A new Transportation Supply Chain Office to help industry with disruptions to supply chain transportation networks.
  • A commitment to review the SR&ED incentive system is long overdue and welcome news by manufacturers.

NGen, the organization leading Canada’s global innovation cluster for advanced manufacturing, had this to say about both budgets:

“Ontario’s new manufacturing tax credit should be seen in the context of all the other supports available for developing, adopting, and scaling up advanced manufacturing capabilities. The tax credit addresses an important gap in funding the acquisition of machinery and equipment incorporating leading edge technologies. But they will only be successful in moving the needle to the extent that companies focus on the strategies, management practices, and workforce development initiatives they need to compete and grow,” said Jayson Myers, CEO of NGen.

With regards to the federal budget, he said, “The federal tax credit is really intended to help retain and attract manufacturing investments in cleantech and related production activities in Canada in the face of the support for clean energy, decarbonization, and electric vehicle projects recently announced as part of the US Inflation Reduction Act. Canadian manufacturers will be able to take advantage of the tax credit when they invest in technologies that drive down GHG emissions or produce materials or batteries for the EV value chain.”

Canadian Manufacturing also spoke to manufacturers to get their thoughts on the budget. Delta-Q Technologies Inc., a manufacturer of battery charging technologies, had this to say about the proposed federal budget.

“We think it’s fantastic,” said Sarah McKinnon, CEO and CFO of Delta-Q Technologies. “Part of our mission with our technology is to have a positive impact on the planet. We’re very excited to see some of these incentive programs come out of the government, because we currently don’t have our manufacturing assets in Canada. These incentives right now wouldn’t help Delta-Q but we are able to take advantage of other R&D government programs.”

When asked if these kinds of incentives are influential at all in convincing Delta-Q to consider manufacturing in Canada, Sarah McKinnon was clear.

“Definitely. With the changing geopolitical climate we look at our manufacturing strategy regularly. We have talked in the past, but it does need to be cost-competitive, so we have a reasonable offering that’s commercially viable for our customers.”

Manufacturers such as OTTO Motors and Xtract One Technologies were also reached out to regarding the Ontario and federal budgets, but were unable to comment at this time.

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