Canada has announced investments of more than CAD80bn (USD59.4bn) in clean technology and energy over the next decade in its 2023 budget, as reported by ESG Today on March 31. The package offers over CAD60bn in tax credits and CAD20bn in sustainable infrastructure investments. By 2035, over CAD25bn of the tax credits will be allocated to cover 15% of the cost of equipment used to produce and transmit clean electricity, CAD18bn for investments in clean hydrogen production, more than CAD11bn for supporting clean technology manufacturing in multiple areas, and over CAD500m for expanding the carbon capture, utilization, and storage (CCUS) investment. Aside from the tax credits, the Canada Infrastructure Bank will invest at least CAD10bn in its clean energy priority area and another CAD10bn in its green infrastructure priority area.

Canada’s generous financial allocation for clean tech and energy responded to the US’s Inflation Reduction Act (IRA), which authorized an investment of USD369bn in energy security and initiatives mitigating climate change over the next ten years. The IRA has raised concerns that it might lure green investments from other countries to the US. According to a senior government official of Canada, the 2023 budget intends to put Canada on roughly equal footing with the US by reducing the cost of investment in clean technology. The official stated that Canada needs about CAD100bn a year in clean tech investment to meet the government’s goal of achieving net-zero emissions by 2050, compared to the current annual spending of between CAD15bn and 20bn.

Sources: 

https://www.esgtoday.com/canada-announces-over-60-billion-clean-tech-energy-investments-to-compete-with-u-s-inflation-reduction-act/

https://www.budget.canada.ca/2023/report-rapport/chap3-en.html

https://www.politico.com/news/2023/03/29/canada-u-s-clean-energy-ira-00089284

https://www.reuters.com/world/americas/canada-ramp-up-clean-tech-push-budget-level-playing-field-with-us-2023-03-28/