CHARTS: EV battery metals bill sets new low as lithium, nickel, cobalt price slump continues
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Canada’s major mining industry group and a green energy think tank are welcoming nearly C$10 billion spread over tax credits for clean technology, mining project approval improvements, innovation research and industry training announced in a federal budget update.
Ottawa is offering C$6.7 billion in tax credits over five years for up to 30% of investments in clean technologies such as battery storage, electric industrial vehicles and small nuclear reactors, according to the Liberal government’s fall economic statement issued Thursday.
It also gives C$1.28 billion over six years to several federal departments, including the Impact Assessment Agency, to speed the project approvals process; C$962.2 million over eight years to modernize the National Research Council; and C$802.1 million over three years for the Youth Employment and Skills Strategy.
“This investment tax credit will serve to benefit Canada’s mining industry in several ways as the deployment of zero emission vehicles and non-green-house gas emission solutions is accelerating across our sector,” Pierre Gratton, president and chief executive officer of the Mining Association of Canada, said in a news release. “This tax credit will support our sector in accomplishing its climate action priorities.”
Mark Zacharias, executive director at Vancouver-based Clean Energy Canada, a research group at Simon Fraser University, said the tax credit was a suitable response to the United States boosting its own clean energy industries with $1.7 billion in incentives in recent legislation by the Biden administration.
“Canada simply had to respond,” Zacharias said in a statement after the budget update. “It’s a recognition of a global reality in which our largest trading partners are mapping out their clean industrial futures and planting flags.”
Canada is among the Western nations trying to boost and protect the critical mineral industries it needs for a transition to clean energy that is estimated to cost trillions of dollars globally. Ottawa announced a national critical minerals strategy in April, which it plans to update by year’s end, and toughened foreign investment rules last month. This week it ordered three companies based in China, which controls some 80% of rare earth elements in global markets, to divest from Canadian projects.
Federal Natural Resources Minister Jonathan Wilkinson had said on Oct. 25 that Canada would respond to the US tax incentives in its Inflation Reduction Act. Wilkinson, who served on the board of Hydrogen and Fuel Cells Canada, also spoke about the need to promote the hydrogen fuel industry in Canada.
Zacharias and Gratton welcomed the budget update’s increase to 40% of a previously announced investment tax credit for clean hydrogen.
Wilkinson and provincial counterparts such as Ontario Mines Minister George Pirie have said how Canada must cut its mining approval times. Gratton criticized the federal Impact Assessment Agency for an “unsatisfactory job” reviewing projects.
“It is imperative that more knowledgeable subject-matter experts, rather than just more staff, be hired,” Gratton said. “Canada has had tremendous success attracting new investment into the battery value chain on the promise of a reliable supply of battery materials, and now we have to deliver.”
Zacharias said Ottawa’s increased clarity on its policies to foster clean energy innovation and improve training are needed to improve Canada’s competitiveness.
“The idea that climate action is also economic action has never been truer,” Zacharias said. “We’ve had climate plans with economic benefits. This is economic planning with climate benefits.”
