Serious money is heading for Canadian industries looking to reduce emissions after the federal government unveiled its answer to the U.S. Inflation Reduction Act.
The spending commitments in the federal budget include tax credits for investments in clean electricity, clean tech manufacturing and hydrogen that together are expected to cost some $55 billion through to 2034.
The total cost of credits over that time frame grows to about $83 billion when including tax credits announced last year for carbon capture and storage and clean technology investments that received a boost in the budget.
The government says the funding is necessary to ensure Canada isn’t left behind as other countries ramp up subsidies for the space, most notably the US$369 billion contained in the landmark U.S. legislation passed last year.
Some industries may still be disappointed though as the tax breaks are focused on getting projects built and don’t include the production rewards seen in the U.S., while other areas have only been promised more consultations ahead.
Climate advocacy groups have criticized supports such as carbon capture and storage and fossil fuel-based hydrogen production as wasteful programs that don’t achieve the emission cuts needed in the near term.