Federal budget unveiled, significant investments for cleantech initiatives

The federal government unveiled its 2021-22 budget, with significant investments for a green economy.

The 2021-2022 federal budget unveiled $101.4B in new spending, with a projected deficit of $354.2B for 2020 and dropping to $154.7 billion in the current 2021-22 fiscal year.

The focus of the budget was on pandemic recovery and resiliency with spending in three key areas: raising the federal minimum wage, $30B towards a national childcare plan, and $17.6B towards cleantech investments.

This last commitment no doubt came as a welcome announcement for many ailing manufacturers in a variety of cleantech-related industries.

The federal government’s $17.6B investment in a green recovery plan includes:

• A plan to launch in the coming months a federal green bond framework allowing investors to help finance Canada’s climate change initiatives;
• $4.4 billion over the next five years to offer interest-free loans of up to $40,000 for environmentally-friendly home retrofit projects
• A 50 per cent 10-year reduction on corporate and small business income tax rates for companies manufacturing zero-emissions technologies, such as solar panels and electric buses.
• $56 million over five years has also been tapped to work with countries like the United States on bringing in standards for zero-emission vehicle charging and refuelling stations.

Chrystia Freeland also announced plans to put another $7.2 billion into the Strategic Innovation Fund starting now and continuing for the next seven years, including specific amounts to go into projects within the life sciences, automotive, aerospace, and agriculture sectors. Of this, $5 billion will be funnelled towards the fund’s Net Zero Accelerator, which supports projects to help reduce domestic greenhouse gas emissions.

However, missing from the budget was any significant plan for investment in technology as manufacturers continue to try and scale-up and become globally competitive without a support system in place. This sentiment was echoed by Dennis Darby, President and CEO of CME (Canadian Manufacturers & Exporters).

“The federal government missed an opportunity to have a more comprehensive approach which would have helped to make our manufacturers more competitive. A lot of the measures announced today are positive and will help, but there is not enough in there to move the needle and drive long-term growth.”