Are the Clean Economy ITCs a Political Issue During This Election?

As we are in week 3 of the most consequential federal elections in generations, here are a few things to think about:

Over the past months, the carbon tax has been a focal point of public discourse—and it is poised to remain one of the important issues of the campaign.

Conservative leader Pierre Poilievre has made his stance clear with the “Axe the Tax” slogan. In a notable pre-election move, Carney announced the abolition of the consumer carbon tax. Poilievre responded by doubling down, pledging to “axe the entire carbon tax law.” This would mean also repealing the Output-Based Pricing System (OBPS), which functions as a carbon market for large industrial emitters in the four provinces where it applies.

Does this signal a broader rollback of emissions-related policy? Not really, as a few more measures have been proposed by all parties:

1) The Conservative Party suggested to expand the eligibility of both the Clean Technology and Clean Technology Manufacturing Investment Tax Credits (ITCs); though, no further details have been released.

As energy security continues to be framed as a national security issue, policies may increasingly shield all forms of energy generation—whether clean or carbon-emitting.

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2) The Liberals have suggested as part of Tariff related actions to develop  a Carbon Border Adjustment Mechanism (CBAM) to “ensure fairness for Canadian industries”. This is still ways away but would look at the carbon intensity of inputs so may increase costs on a number of imported goods.

3) The NDP are talking about building  an East-West clean energy grid with Canadian products to deliver affordable, secure energy while creating thousands of green jobs.

This is quite similar to energy corridor announcements by both the CPC and Liberals but only focuses on clean electricity and local manufacturing.

We will continue to monitor and report on any new developments related to Clean Economy ITCs as the campaign unfolds.

At LCAB, we specialize in helping companies manage the ITC's Labour Requirements proactively, ensuring documentation is in order before the review begins. If you want to minimize non-compliance risk and accelerate your ITC recovery, please don’t hesitate to reach out or book time with us.