Canada’s provinces will need to be moving toward non-emitting power grids to access clean electricity investment tax credits, the federal government said on Tuesday as Ottawa released a paper outlining its vision for net-zero grid by 2035.
Prime Minister Justin Trudeau’s Liberal government says an emissions-free grid will be the backbone of decarbonizing the Canadian economy and reaching net-zero emissions by 2050.
But a number of provinces including Alberta and Saskatchewan, whose conservative premiers frequently clash with the federal government on energy and climate policy, say the target is unrealisticand are aiming for 2050 instead.
Ottawa introduced a refundable 15% clean electricity investment tax credit in its 2023 budget in March, available to both the private sector and provincial utilities.
“To access the tax credit will require you are moving in the direction of non-emitting generation,” Natural Resources Minister Jonathan Wilkinson told a press conference in Vancouver, as the government published a clean energy policy paper and said it will release a Clean Electricity Strategy in 2024.
Wilkinson did not specify when provinces would need to achieve net-zero power emissions.
Tuesday’s federal policy paper also laid out a number of other investment tax credits aimed at accelerating the build-out of clean electricity generation and infrastructure, including funding for carbon capture storage and utilisation, clean technology and clean hydrogen.
“The federal government will make these tools available to provinces and territories that take concrete action to achieve net-zero,” the paper said, noting investments of more than C$400 billion ($298.31 billion) are needed to replace aging facilities and expand electricity generation capacity.
Think tank Clean Energy Canada said the paper suggests Ottawa is seeking views on how to design incentives to convince provinces to achieve a net-zero grid by 2035.
But Alberta, Canada’s main fossil fuel-producing province, said indications the federal government was considering prohibiting access to funds unless provinces commit to the 2035 timeline were alarming.
“This would obviously penalize the provinces most in need of assistance in transitioning to a carbon-neutral grid, including Alberta,” provincial Environment Minister Rebecca Schulz said in a statement.
Canada’s environment minister, Steven Guilbeault, is set to release draft clean electricity regulations very soon, kicking off a 75-day comment period that Wilkinson said would be an opportunity for provincial governments to voice concerns.
More than 80% of Canada’s power grid is already non-emitting, but the country will need to more than double its generation capacity by 2050 to meet its goal of electrifying transportation and industry, said think tank Electricity Canada.
Source: Reuters
