The race to develop a clean economy is picking up speed, and Canadian manufacturers need a robust response from Ottawa, says CME, in asking the federal government to move faster on investment tax credits. PHOTO by Pexels.
The federal government’s Fall Economic Statement addresses some of the uncertainty Canadian manufacturers have around the implementation of investment tax credits designed to increase the country’s competitiveness, but manufacturers want the government to move even more quickly to enact the measures, says Canadian Manufacturers & Exporters.
Finance Minister Chrystia Freeland delivered her economic statement in the House of Commons Tuesday. It provides a timeline for implementation of the five investment tax credits (ITCs) aimed at helping manufacturers transition to the clean economy and respond to the U.S. Inflation Reduction Act (IRA). According to the economic statement, the tax credits will be delivered by the end of 2024.
“Manufacturers have been pushing the federal government to provide certainty around the timing of these measures, fearing they are falling behind the U.S. in the wake of President Joe Biden’s massive investment in clean tech through the IRA. The establishment of the IRA, which promises to support the manufacturing industry with at least US$369 billion over 10 years, is already attracting massive investment to the United States,” a release from the CME states. “Since its inception, the IRA has generated more than US$110 billion in private investment and created 170,000 jobs. This is in addition to other measures, such as “Buy America”, which has also helped bolster the American economy.”
Meanwhile, the Canadian response, which includes the proposed ITCs and separate agreements containing IRA-equivalent benefits with battery producers and automakers, has been slow, and manufacturers want the ITC implementation accelerated to enable them to play on an equal footing and continue to be competitive, the CME release adds.
“Although this is a step in the right direction, as it provides a little more certainty for our manufacturers, we are still behind. The race to develop a clean economy is picking up speed, and we need a robust response. We encourage all parties to work with the Canadian government to implement these initiatives as quickly as possible,” said Dennis Darby, President and CEO of CME.