Canada’s 2024 Budget: Racing Towards a Green Revolution and Net Zero Destiny

"Canada Takes Lead in Global Race for Investment and Innovation Towards Net Zero Goals"

Canada’s Net Zero Economic Plan: A Blueprint for Investment and Innovation

In the global pursuit of investment and innovation towards achieving net zero emissions, Canada has emerged as a frontrunner, leveraging its abundant resources and progressive policies to attract capital and drive sustainable growth. The Canadian government’s recent announcement of a comprehensive net zero economic plan, supported by a substantial investment exceeding $160 billion, signifies a significant milestone in the country’s dedication to combating climate change.

At the core of this ambitious plan are major economic investment tax credits totaling $93 billion by 2034-35. These incentives are designed to stimulate private investment, fostering Canadian leadership in clean energy and innovation while simultaneously generating economic growth and high-quality jobs. Investors, both domestic and international, are taking notice of Canada’s strategic vision and commitment to sustainability.

Despite facing global economic challenges, Canada has seen public markets and private equity capital flowing into its net zero economy reach $14 billion in 2023. This influx of capital serves as a testament to the effectiveness of Canada’s investments in driving sustainable business growth and job creation. One area where Canada has particularly excelled is in the development of electric vehicle (EV) battery supply chains, with BloombergNEF ranking Canada as the most attractive location globally for building EV battery supply chains, surpassing even China.

This accomplishment underscores Canada’s advantages, including its abundant clean energy sources, high labor standards, and robust engagement with Indigenous communities. By capitalizing on these strengths, Canada is creating high-skilled, well-paying jobs across various sectors, from resource workers mining critical minerals to technicians assembling EV batteries.

Canada’s commitment to clean energy extends beyond electric vehicles, encompassing a wide range of clean technologies and industries. The government’s investments are aimed at unlocking the full potential of Canadian clean technology firms, facilitating their growth and enhancing their global competitiveness. Canada currently boasts 12 companies on the Cleantech Group’s list of the 100 most innovative global clean technology companies, showcasing the country’s prowess in driving sustainable innovation.

By 2050, Canada’s clean energy GDP has the potential to increase significantly, possibly growing fivefold to reach $500 billion. This growth trajectory aligns with Canada’s target of achieving net zero emissions by 2050, demonstrating that prioritizing climate action is synonymous with fostering economic prosperity.

Key initiatives outlined in the Canada 2024 budget include delivering major economic investment tax credits, catalyzing private investment through the Canada Growth Fund, building clean electricity infrastructure, and securing Canada’s position as a global supplier of critical minerals. These initiatives are essential for propelling Canada towards its net zero target by 2050 while enhancing economic resilience and competitiveness.

A notable feature of the budget is the introduction of a new Electric Vehicle Supply Chain investment tax credit, aimed at bolstering Canada’s position as a hub for EV manufacturing. This tax credit incentivizes businesses to invest in Canada across various segments of the EV supply chain, from assembly to battery production, by offering a 10% tax credit on the cost of buildings used in key stages of the manufacturing process.

To seize the investment opportunities presented by the global clean economy, Canada is implementing six major economic investment tax credits. These include tax credits for clean electricity projects, carbon capture initiatives, and investments in clean technology, all crucial for accelerating the transition to a low-carbon economy and reducing emissions across different sectors.

Of these tax credits, the Clean Electricity Investment Tax Credit holds particular significance as it aims to support the growth of Canada’s electricity capacity to meet the increased demand anticipated by 2050. Canada already boasts one of the cleanest electricity grids globally, with 84% of electricity generated from non-emitting sources. However, significant investments are needed in other regions to ensure clean, reliable electricity grids nationwide.

The federal government is committed to assisting provinces and territories in making these essential investments. The Clean Electricity Investment Tax Credit offers a 15% refundable tax credit rate for eligible investments in new equipment or refurbishments related to low-emitting electricity generation systems, stationary electricity storage systems, and transmission infrastructure. This tax credit is available to both taxable and non-taxable corporations, including those owned by municipalities or Indigenous communities.

As Canada charts its course towards a clean economy and a net zero future, the 2024 budget serves as a testament to the country’s determination and ambition. By harnessing its natural resources, skilled workforce, and forward-thinking policies, Canada is not only embracing the challenges posed by climate change but also seizing the economic opportunities inherent in sustainability.

Matt Lyons

Matt Lyons

Matt Lyons is the founder of Forestry & Carbon. Matt has over 25 years as a forestry consultant and is invoilved in numerous carbon credit offset projects.

Leave a Replay

Scroll to Top