The Federal Government Releases Budget 2023

Prior to the tabling of the federal budget on March 28th, Accelerate had been very active in advocating to the government that it apply a strategic industrial policy lens to any fiscal response to the US Inflation Reduction Act. While it is important that Canada continue to attract the foreign direct investment that will form a bedrock for this industry, we argued that industrial policy for Canada must go beyond subsidies and also feature coordinated action with industry and other civil society stakeholders to ensure alignment on goals and objectives across the entire ZEV ecosystem.

In terms of measures that were in the budget, we were pleased to see the new Investment Tax Credit for Clean Technology Manufacturing announced in Budget 2023. This fiscal tool offers companies a 30% tax credit for investments in clean technology manufacturing machinery or for investments to extract, process, or recycle critical minerals. This will help spur investment in the equipment needed to catalyse Canada’s EV industry and battery ecosystem. 

We were also very pleased to see a focus on further developing out Canada’s clean electricity systems, one of Canada’s premier competitive advantages in attracting investment into the ZEV supply chain. Tools such as the new 15% tax credit for investments in clean electricity infrastructure and committing the Canada Infrastructure Bank to invest at least $20 billion to support clean electricity and clean growth infrastructure projects, are progressive steps. 

While these are important investments, they are only just a beginning. For Canada’s EV sector to truly succeed, we need industrial strategy to also define what long term success looks like. This means working with industry and other critical stakeholders to develop objectives and targets that will maximize the value on offer to the country through the development of this supply chain. Post-budget, this is the work that Accelerate will continue to engage in with the federal government, with our members and collaborators and through our task forces.