Government Funding & Budget 2021

This article is an overview of the commitments made and legislative amendments expressed in Budget 2021 that will be of interest to Canada’s energy sector.

On April 19th, 2021, the Canadian government tabled Federal Budget 2021 – one of the most important budgets of our time. The budget includes a plan to build a clean economy, with tax incentives to grow zero-emission technology manufacturing, carbon capture, utilization, and storage, and green hydrogen. Our team of leading CCI professionals help make sense of the complex and ever-changing Canadian landscape by exploring the implications of key federal budget initiatives, investments, and proposed tax measures regarding clean technology and a sustainable future. Budget 2021 commits $17.6 billion to “green stimulus measures” for Canada’s traditional industries, including its natural resources, manufacturing and energy sectors.

Chapter 4 – Helping Canadian Businesses Grow and Succeed

Chapter 4 focuses on helping Canadian business grow and succeed by investing in Canadian innovators through a renewed venture capital catalyst initiative, boosting Canada’s cleantech exports, and supporting innovation and industrial transformation.

  • $450 million over five years beginning in 2021 to provide additional venture capital to entrepreneurs, which may be of interest to early-stage energy companies across Canada
  • $21.3 million over five years starting in 2021 for Global Affairs Canada’s continuation of its International Business Development Strategy for Clean Technology
  • The intention of the International Business Development Strategy is to assist Canadian firms in identifying export opportunities and accessing international climate financing
  • $8 billion over seven years starting in 2021 for increased funding in the Strategic Innovation Fund’s Net Zero Accelerator to help support industry decarbonization and clean technology projects

Chapter 5 – A Healthy Environment for a Healthy Economy

Budget 2021 recognizes that Canada lags in commercial scale-up, export and industry adoption of clean technologies, notwithstanding its position as a global leader in clean tech innovation. Therefore, Chapter 5 focuses on propelling cleantech projects, growing zero emission technology manufacturing, accelerating investment in clean energy tech, charging and fueling zero-emission vehicles, a federal clean electricity fund, federal green bond, tax incentive for carbon capture, utilization, and storage (CCUS), advancing CCUS tech, cleaner fuels for a cleaner environment, supporting production and use of clean fuels, supporting a centre for innovation and clean energy in B.C., and investing in clean energy in Northern and Indigenous communities.

  • $1 billion over five years starting in 2021 to assist in attracting private sector investment for Canadian clean-technology companies
  • Proposed reduction in the general corporate and small business income tax rates by 50% for businesses that manufacture or produce for zero emission technologies.
  • $56.1 million over five years starting in 2021 for the development and implementation, alongside international partners, of codes and standards for retail zero-emission vehicle charging and fueling stations
  • $14.9 million over four years starting in 2022 and $77.9 million in future years for Public Services and Procurement Canada to purchase renewable energy certificates for all federal government buildings
  • $5 billion issuance target for an inaugural federal green bond in 2021, which the government can use to fund green infrastructure or clean tech innovations
  • Proposed introduction of an investment tax credit for investments in carbon capture, utilization, and storage (CCUS) project to come into effect in 2022 – intended to support the production of hydrogen
  • $319 million over seven years beginning in 2021 to Natural Resources Canada to support the research, development and demonstration of commercially viable CCUS projects
  • $67.2 million over seven years starting in 2021 for the implementation and administration of Canada’s Clean Fuel Standards to help make the fuels Canadians use cleaner
  • $1.5 billion over five years be