(As originally published on LinkedIn, 27 March 2017)
Canada’s 2017 federal budget signals opportunities for clean-tech and renewables
By: Gerard McInnis, EY’s Canadian Power & Utilities Leader
Last week, the Canadian government tabled the 2017-2018 Federal Budget. Among the spending measures included was a renewed commitment to building a clean growth economy through investments in green infrastructure, renewable power and the clean technologies sector. Also outlined were priorities for clean electricity grid interconnections, electric vehicle charging stations and projects to safely manage wastewater.
Advancing the Cleantech sector
To help companies grow and expand, Canada’s clean technology sector will have access to nearly CD$1.4 billion in equity finance, working capital and project finance through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). In addition, the government will recapitalize the SD Tech Fund™, which supports the development and pre-commercial demonstration of clean technologies.
The budget also included the establishment of a Clean Technology Data Strategy and Clean Growth Hub, to foster innovation, enable reporting on clean technology results and connect stakeholders to international markets, among other initiatives.
Transitioning to clean energy
Canada’s transition to a low-carbon, climate resilient economy was reaffirmed in the 2017 budget with CD$5 billion in investments over five years in green infrastructure projects that reduce greenhouse gas emissions and pollution. Funding will be available through integrated bilateral agreements, the Canada Infrastructure Bank, a Low Carbon Fund and a series of other national programs.
Diversifying electricity generation
There are also plans to accelerate replacement of coal-fired electricity generation by 2030 and set performance standards for natural-gas-fired electricity generation. The budget also proposed to reduce reliance on fossil fuel in northern and remote areas by encouraging greater use of geothermal energy.
Supporting clean energy in the private sector
Tax support will expand for businesses that invest in clean energy generation and energy efficiency equipment. Businesses will be allowed to deduct the cost of eligible capital assets on an accelerated basis. Plus, the budget expands the range of geothermal energy project expenses that are eligible as renewable and conservation expenses.
From significant funding for green infrastructure projects, continuation of green buildings and energy efficiency measures, and investments in low-cost renewable energy sources, the 2017 budget presents several opportunities for the Canadian P&U sector to consider.