Summary of Pathways Alliance’s Submission on the Department of Finance Canada’s Consultation on Budget 2023 Measures  

Submission Date: September 8, 2023

The Pathways Alliance (Pathways) provided input into the Department of Finance Canada’s consultations with Canadians on Measures to Grow Canada’s Clean Economy, and specifically the Carbon Capture, Utilization and Storage (CCUS) Investment Tax Credit (ITC), Clean Technology ITC, and Labour Requirements Related to Certain Investment Tax Credits, as announced on August 4, 2023.  

Pathways members view the ITCs as a critical component of the fiscal policy framework necessary to incent investment, attract capital, create significant new jobs, and share in economic benefits with Indigenous groups as the oil sands sector moves forward towards decarbonization of Canadian energy production.   

The legislative proposals, as drafted, contain design and drafting deficiencies that raise significant concerns with respect to accessing, securing, and retaining credit for decarbonization initiatives. Should these concerns not be addressed, it is the perspective of Pathways that the value of the ITCs will be materially eroded and may not enable intended outcomes to be achieved. 

In the submission with respect to the ITCs under the Consultation on Budget 2023 Measures, Pathways urged Finance Canada to address the following key areas of concern: 

  • Enable Competitiveness – To attract capital for decarbonization activities at the scale necessary to achieve meaningful reductions, the ITCs must provide predictable revenue over time and allow for stacking with other fiscal programs. 
  • Extend Timing – ITC timelines for support at the proposed percentages must be extended to provide sufficient time for the advancement of the complex and world-class projects within the scope of the ITCs. 
  • Clarify Labour Conditions – Labour conditions must recognize variations across Canada and pressures that may be created due to decarbonization project development to ensure that workers are directly benefiting from the ITC labour conditions as intended. 
  • Provide Investment Certainty – The ITCs must be revised to remove unnecessary complexity that is inconsistent with the objective of attracting investment in decarbonization projects such as lengthy claw back provisions, differing phase out schedules, narrow and confusing eligibility criteria and a high-level auditing risk.