March 28, 2023
On March 28, Deputy Prime Minister and Minister of Finance, the Hon. Chrystia Freeland, delivered Budget 2023 - A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future in the House of Commons. This budget provided further details on Canada’s response to the American Inflation Reduction Act (IRA), but much like the Fall Economic Statement (FES) 2022 it fails to put Canada on an even footing.
With significant investment tax credits for clean tech and low-CI gaseous fuels announced in Budget 2023 and the FES, there were no provisions included for biogas & renewable natural gas (RNG). This poses an existential threat to Canadian producers of this viable pathway to net-zero, as the American IRA has expanded existing investment tax credits to include biogas operations that begin construction before 2025.
This means that investment in Canadian biogas & RNG projects will not be incentivized to the same extent as investments in other less-established clean technologies deemed eligible to receive up to 30/40 percent of project capital costs back through a refundable tax credit.
By failing to include biogas & RNG in the clean technology investment tax credit in Budget 2023, Finance Canada has continued to stall vital methane emissions-reducing projects at home, while ensuring that much-needed investment continues to flow south to the U.S.
The Canadian Biogas Association understands that, despite this omission, Finance Canada remains open to the bioeconomy and low-carbon fuels. We will continue to work with champions within the government and their teams to ensure that this oversight is corrected and that Finance Canada puts the powerful tool that is biogas & RNG back in Canada’s emissions-reduction toolbox.
