“Canada’s Clean Technology Investments to Get a Major Boost”
Almost half of the Canada Growth Fund for clean technology investments will soon be allocated to special contracts set to give companies confidence in making significant investments to reduce their greenhouse-gas emissions.
Finance Minister Chrystia Freeland provided this confirmation during her fall economic update, noting that up to $7 billion of the $15-billion fund would be reserved for contracts for difference, some of which are already being negotiated.
The Need for Contracts
These contracts acknowledge the fact that companies are making decisions to invest in technologies to lower their carbon emissions based on future carbon pricing expectations. They are intended to mitigate the risk associated with such investments should carbon pricing costs change in the future.
These contracts could be the final piece that major oilsands companies need to place in order to start constructing large carbon capture and storage projects, which are crucial to meeting Canada’s emission targets.
A Competitive Move
Freeland emphasized the need for Canada to keep pace with clean-tech transition investments, positioning the country as a competitive player in clean energy and clean technology.
The fall update also promised some movement on previously announced tax credits for the clean-tech transition, with legislation to create tax credits for carbon capture and storage and clean technology expected to be enacted soon.
Uncertainty and Further Issues
However, there are lingering questions about the Liberals’ carbon pricing policy, which has been a target for criticism by the Conservative Party. Political instability and recent moves to pause the carbon price for home heating oil can lead to further uncertainty in the system.
Looking to the Future
An Indigenous loan guarantee program will also be established to provide capital for Indigenous communities to take part in major energy projects, yet the details about whether these guarantees include oil and gas projects remain uncertain.
Although it is clear that the fall update includes measures to strengthen Canada’s commitment to reducing emissions and further investments in clean technology, there are still questions surrounding how these announcements will impact the broader climate action strategy.
It is vital for the government to clarify these uncertainties in the coming months and to demonstrate a strong commitment to environmental protection and sustainable economic growth.”