Canada's federal government will introduce legislation this month to start paying subsidies for carbon capture utilization and storage (CCUS) and net-zero energy projects at a cost of about C$27 billion over five years, Reuters reported citing a source with direct knowledge of the matter.
The media outlet noted that Canada's Finance Minister Chrystia Freeland will announce the investment tax credit (ITC) funding when she presents the so-called Fall Economic Statement (FES) to parliament on Tuesday afternoon.
The government is also expected to concurrently introduce to parliament the labour provisions that will be tied to most of the ITCs, requiring investors to pay workers the prevailing union wage and provide apprenticeship opportunities in order to collect the maximum subsidy.
Canada has lagged the US on the incentives seen as necessary to boost investment in new, low-carbon technologies, and the ITCs are expected to help Canada meet its goal of net-zero emissions by 2050.
Canada is the world’s fourth-largest oil producer and CCUS are crucial to reducing emissions from Alberta’s oil sands without cutting production, according to Reuters.
The $430 billion US Inflation Reduction Act (IRA), which passed in August 2022, has already spurred $132 billion of investment across more than 270 new clean energy projects, Bank of America estimates.