The Government of Canada Releases its 2023-2024 Federal Budget

The President’s remarks to the Canadian Parliament made that clear that “First, it’s a future built on shared prosperity, where Canada and the United States continue to anchor the most competitive, prosperous, and resilient economic region in the world.  That’s a fact.  That’s just a fact.  Where our supply chains are secure and reliable from end to end because we’re creating the value at every step right here in North America.”

One industry that was clearly on his mind was the electric mobility sector.

Referring to the 2022 Inflation Reduction Act (IRA) he signed into law in August of that year, President Biden predicted that it would “spur clean energy investments all over the world. And explicitly it includes tax credits for electric vehicles assembled in Canada, recognizing there’s a simple reason — how interconnected our auto industries are and our workers are.”

Four days later, on March 28, Canada’s Deputy Prime Minister and Finance Minister, Chrystia Freeland, introduced the details of her government’s support for the industry when she announced Canada’s 2023-2024 federal budget. Bottom line: the budget provides for almost $20 billion (CDN) over the next five years for the sector. Key provisions include:

• A refundable 15% clean electricity investment tax credit for investments in non-emitting electricity generation systems, and electricity storage or transmission, at a cost of $6.3 billion over four years;
• A refundable clean technology manufacturing tax credit equal to 30% of the cost of investments in machinery used to manufacture or process clean technologies, at a cost of $4.5 billion over five years;
• A clean hydrogen investment tax credit first signaled in the 2022 fall update, with support ranging from 15 to 40% of eligible project costs; and
• At least $20 billion coming from the Canada Infrastructure Bank to support building major clean electricity and clean growth infrastructure projects.

The budget and supporting documents can be found on the government’s website at Budget 2023 — A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future.

What’s next? The budget will now go before the Canadian Parliament for a full vote in the days ahead. It is expected to pass. Watch this space.

For more news on Canada’s 2023-2024 budget, listen to our Five Questions, Five Answer podcast, featuring David C. Adams, president and CEO of Global Automakers Canada, about the budget’s key details.

Trivia alert. A longstanding tradition in Canada is for the Finance Minister, when officially announcing the budget, wear a pair of new shoes.  Minister Freeland continued that tradition. Sorry - no news on brand or size.