The federal government’s ambitious climate change agenda continues to represent significant budget costs. The Saskatchewan Chamber supports the refundable investment tax credit for businesses that incur eligible carbon capture, utilization and storage (CCUS) expenses but, again, believes the federal government fell short of making a program that would work for Saskatchewan.
“By making enhanced oil recovery an ineligible use of the CO2, the federal government is cutting off opportunities for Saskatchewan and sustainable energy production. Even with the escalating carbon tax, investing in CCUS is difficult and adding enhanced oil recovery would help the math make sense while putting more environmentally conscious oil and gas into the market,” elaborated LaLiberte. (2)
Beyond the environment and carbon tax areas, there were other positive elements for Saskatchewan business in the budget. The Saskatchewan Chamber is pleased the federal government is recognizing the labour struggles facing businesses and anticipates that the $4,000 deduction for tradespeople for temporary relocation expenses will hopefully help attract people to the opportunities in Saskatchewan. The Critical Mineral Exploration Tax Credit will also help build Saskatchewan’s budding rare earth mining sector.
Finally, the Saskatchewan Chamber was pleased to see a continuation and strengthening of the investment in the universal broadband fund to enhance internet connectivity in the country – something Saskatchewan’s rural communities have noted they urgently need.
The Saskatchewan Chamber of Commerce is the Voice of Saskatchewan Business and represents the interests of over 10,000 individual businesses, industry associations, and local chambers across the province through its chamber network. For more information on Chamber activities and advocacy efforts, visit saskchamber.com or @SaskChamber on Facebook, Twitter, Instagram, and LinkedIn.
Saskatchewan Chamber of Commerce
Director of Marketing & Communications
Saskatchewan Chamber of Commerce
(1) Budget 2022 proposes to provide $120.6 million over five years, starting in 2022-23, and $0.5 million ongoing, as follows:
· $69.9 million for Natural Resources Canada to undertake research to minimize waste generated from these reactors; support the creation of a fuel supply chain; strengthen international nuclear cooperation agreements; and enhance domestic safety and security policies and practices; and,
· $50.7 million, and $0.5 million ongoing, for the Canadian Nuclear Safety Commission to build the capacity to regulate small modular reactors and work with international partners on global regulatory harmonization
(2) Budget 2022 proposes a refundable investment tax credit for businesses that incur eligible CCUS expenses, starting in 2022. The investment tax credit would be available to CCUS projects to the extent that they
permanently store captured CO2 through an eligible use. Eligible CO2 uses include dedicated geological storage and storage of CO2 in concrete but does not include enhanced oil recovery.
From 2022 through 2030, the investment tax credit rates would be set at:
• 60 per cent for investment in equipment to capture CO2 in direct air capture projects;
• 50 per cent for investment in equipment to capture CO2 in all other CCUS projects; and
• 37.5 per cent for investment in equipment for transportation, storage and use.
To encourage the industry to move quickly to lower emissions, these rates will be reduced by 50 per cent for the period from 2031 through 2040.