The 2023-2024 federal budget has good news for the future of the green economy and clean energy, all of which is especially good for the economic outlook of Nova Scotia, particularly eastern Nova Scotia, where several green hydrogen projects are in development.

Finance Minister Chrystia Freeland’s budget proposes a clean hydrogen investment tax credit, which is expected to cost $5.6 billion over five years, beginning in 2023-24.

EverWind Fuels, the proponent of a green hydrogen and ammonia production facility in Point Tupper, Richmond County, issued a news release applauding the budget stating, “The global movement toward green energy is rapidly accelerating, and this is a critical time for the Federal Government to determine whether Canada will be a leader or a follower in the future energy economy. Budget 2023 delivers in providing comprehensive measures slated to solidify Canada as a world-leading provider of clean energy and compete with the U.S. Inflation Reduction Act.”

Trent Vichie, CEO of EverWind commented, “Today’s [March 29] budget will help Canadian clean energy projects secure the coveted first-mover advantage in a global industry that is fiercely competitive. The global green energy hubs of tomorrow are being determined today. Off-takers, investors, and equipment suppliers are looking at jurisdictions and projects around the world, and Budget 2023 sends a clear signal that they should choose Canadian projects. We look forward to working with the Government of Canada to develop the Canada Growth Fund which in combination with other Budget 2023 measures will secure Canada’s status as a leading provider of clean energy globally and ensure a clear path towards net zero and energy security.”

Rachel Doran, director of policy and strategy for Clean Energy Canada, spoke to The Journal on March 31 about the federal budget and its clean economy focus as pertains to Nova Scotia.

“Starting with the electricity grid in Nova Scotia, there’s a few different new announcements in this budget and some that are either repackaged or reallocated monies that will all hopefully go to supporting Nova Scotia in its ambitious commitments to clean up the grid by 2030…The first one is the clean electricity tax credit that is totally new. And this one, it doesn’t just have to go to corporations, it can go to non-corporate entities like provinces to really support new clean electricity projects. In Nova Scotia that could be tidal power, it could be transmission of electricity, that could be new renewables projects…That will be some federal dollars going to offset the cost of these new projects even being put forward by public proponents,” Doran said.

“The $20 billion that was coming from the Canada Infrastructure Bank, that money is being reallocated…It did indicate it would be a way to support things like the Atlantic Loop [transmission of hydroelectricity from Quebec to Maritime provinces] and put favourable terms for de-risking things like transmission projects,” she added.

The clean hydrogen investment tax credit was announced in the fall economic statement and the government, Doran told The Journal, “Fleshed out a few of the details in this budget. They’ve been doing consultations to figure out how do they structure this and what they have ended up doing is taking the approach that looks a lot like what the U.S. has done, where basically the levels of support are going to vary between 15 and 40 per cent of eligible project cost, with the projects that produce the cleanest hydrogen receiving the highest levels of support.”

Doran explained how investment tax credits work: “Finance requires an estimate for tax credits for what they think the uptake will be and they cost it out at that. For example, the hydrogen investment tax credit…they put the figure at $5.6 billion over five years…but it’s not the same as a targeted investment program where they allocate $8 billion and there will never be more than $8 billion. Once it runs out, you have to make a decision to add to it or not…. tax credits are meant to be an estimate of uptakes and seeing where that goes,” Doran said.

“Overall, for this package, we [Clean Energy Canada] were really excited to see the budget 2023 focus on the transition to the clean economy as a pillar to Canada’s economic success…We really see Canada’s future economic prosperity as dependent on the speed and scale of Canada’s approach…Europe just passed a big package of measures trying to attract all of this investment in the clean economy to their jurisdiction. So, countries are really leaning in, in a way, and you could call it a new era of industrial policy. Governments are leaning in, with their policy tools and their investment tools as the economy is transitioning, to make sure that their jurisdictions are seeing those benefits in real jobs and GDP.

“For Canada to acknowledge that and get in the game and really be trying to attract some of this investment is something that is going to have a lot of positive downstream impact all across the country…I think we saw in Nova Scotia, for example, you already have a real leading laboratory in EV [electric vehicle] related clean tech with Tesla funding battery research at a Halifax based lab…Our own modeling shows there could be a lot of new jobs in the clean transportation space with the electric vehicle on track to employ 65,000 Atlantic Canadians in 2050,” said Doran.

The 2023 federal budget is extremely supportive of Nova Scotia’s goal to phase out coal and work towards 80 per cent renewable energy, said Doran, adding, “I think this is a positive step for the economy and the future prosperity of Nova Scotia that there are some federal dollars flowing to help accomplish that goal…I think it speaks and bodes well for future investment in the area.”

By Lois Ann Dort, Local Journalism Initiative Reporter

Original Published on Apr 05, 2023

This item reprinted with permission from   Guysborough Journal   Guysborough, Nova Scotia
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