Remarks by the Deputy Prime Minister and Minister of Finance on Carbon Capture, Utilization and Storage Incentives
April 14, 2022
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This has been an exciting and inspiring morning for me to see the terrific innovative work being done right here behind us. It has been a real proof point for me that Canada can—Canada will— seize the opportunities in the green transition. So much of that seizing of opportunities is going to happen in Calgary, in Alberta.
When I tabled the Budget last week, one of the things I emphasized was that the green transition is here. The world economy, our trading partners, have decided that their economies are going green and this is a huge transformation. It is the biggest transformation of the global economy since the Industrial Revolution itself. We have a unique opportunity in Canada—and in Alberta—to be leaders in that green transition. I’ve seen the evidence in the past hour here today.
Governments and businesses around the world are investing in the industries and jobs of tomorrow. It is absolutely essential that Canada not miss the boat.
That is why one of the three key pillars that were the focus of our budget is the green transition.
We launched in the budget a new Canada Growth Fund, which will help attract the billions of dollars in private capital that Canada needs to transform our economy at speed and at scale.
We’re investing in clean energy, and we’re investing in making zero-emission vehicles more affordable and more reliable for Canadians and Canadian businesses.
A critical point in the budget tabled just a week ago was the introduction of a refundable tax credit for businesses that invest in carbon capture, utilization, and storage. That is going to help the amazing innovators I met today.
The CCUS tax credit will mean 60 per cent for investment in equipment to capture CO2 in direct air capture projects, 50 per cent for investment in equipment to capture CO2 in all other CCUS projects, and 37.5 per cent for investment in equipment for transportation, storage, and use.
Consider technologies like pulling carbon out of the air, or capturing it and injecting it into concrete. Those may sound futuristic. I think they do sound futuristic; but, actually, that work is being done right now here in Alberta.
CCUS is, of course, important for the oil and gas sector to reduce its emissions; but it’s important for other sectors too—for steel, cement, electricity generation—all of these industries are important to our economy, and they need to reduce their emissions.
CCUS will help with that. Because the rates of the CCUS credit are higher for the next seven years than they will be in the years that follow, this tax credit has a built-in incentive to encourage these businesses and to encourage investors to invest in CCUS now. This is a use-it-or-lose-it tax credit and we want industry to use it, to get those emissions down, to create incentives for more development of the kinds of amazing new technologies I saw here today.
We tend to talk about the green transition as a moral imperative, as an existential challenge that we face, something we need to think about when we think about passing the planet on to the next generation. That’s true, but the green transition is also an economic necessity. This is the direction where the global economy is going and Canada needs to go there, too.
The good news is there are trillions of dollars of capital around the world that are looking for opportunities to invest in the green transition to create new green industries and the great jobs of tomorrow.
CCUS will be a really important part of that transition. And I know that by working together—industry, researchers and scientists and innovators like the great people I met today, the provincial government, municipalities, the federal government—we can build a cleaner and stronger economy in Alberta for generations to come.
Thank you very much.
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