Federal Fall Economic Statement Puts Renewable Energy and Energy Storage on a Track for Growth
November 29, 2023
The Canadian Renewable Energy Association (CanREA) welcomes the announcement of a timeline for tabling the Investment Tax Credits (ITCs) legislation, as well as a new commitment to economic Reconciliation, as announced recently in the Fall Economic Statement by the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance.
“CanREA is pleased to see the Federal Government deliver on its promise of clear timelines, necessary tax measures and financing mechanisms that will help Canada remain competitive as we build the clean-energy projects that will power our economy,” said Vittoria Bellissimo, CanREA’s President and CEO.
The ITCs were first announced in the Fall Economic Statement 2022 and in Budget 2023—for details, see CanREA’s statement.
“CanREA’s members are excited to put these ITCs into action. When they are rolled out, these tax credits will create the investment certainty we need to accelerate wind, solar and energy storage deployment across the country, which will then provide economic benefits, including tax dollars and landowner supports in communities,” said Evan Wilson, Vice President of Policy for Western Canada and National Affairs, at CanREA.
The 2023 Fall Economic Statement included the following measures to accelerate Canada’s deployment of wind energy, solar energy, energy storage and other clean-energy technologies:
- Clean Technology Investment Tax Credit: Consultations have already been held; the legislation will be presented to Parliament this fall and put in place before Budget 2024. This is a refundable 30% tax credit on the capital cost of investments made by taxable entities in wind, solar PV and energy-storage technologies. It will be available to all project spending starting March 28, 2023, though to 2034.
- Clean Electricity Investment Tax Credit: As announced today, the Clean Electricity Investment Tax Credit will be split in two categories: large crown corporations, and other non-taxable entities like Indigenous Communities and municipalities. This distinction will be clarified in a forthcoming consultation and subsequent legislation. This ITC is a 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.
- For both these ITCs, eligibility will extend to all investments made after Budget 2023 and remain steady through 2031 before winding down in 2035. All energy-storage technologies that do not use fossil fuels are eligible.
- Indigenous Loan Guarantee Program: CanREA and other organizations called for this measure in order to help Indigenous entities participate in Canada’s renewable energy and energy storage sector. The details of this program will be available in Budget 2024.
- Canadian Infrastructure Bank concessional loans: CanREA has successfully advocated for changes to the way the Government of Canada provides renewable energy financing, to encourage deployment: Canada Infrastructure Bank loans and other sources of financing will no longer limit the ITC claim and work in concert with other sources of renewable energy financing
Today’s commitments—to legislate the Clean Technology ITCs and to create the Indigenous Loan Guarantee Program—will help deliver on the goals of governments, companies, and CanREA members, ensuring the deployment of renewable energy and energy storage projects with meaningful economic benefits for Indigenous peoples.
The new measures and increased clarity will help the industry accelerate the deployment of wind energy, solar energy, energy storage and other clean technologies, aiming to reduce the cost of electricity to consumers.
“CanREA has been engaged on the ITCs issue since Day One, working hard to push these important policies forward. As a next step, we look forward to working with all parties to ensure that these important new policies create and sustain good jobs from coast-to-coast-to-coast—and do so as soon as possible,” said Fernando Melo, Federal Director at CanREA, who was on site for the presentation of the Fall Economic Statement.
