On March 28, the federal government released its 2023 Budget. The 2023 Budget provides expanded funding streams to encourage clean energy investments across Canada, and new tax incentives to grow regional electricity infrastructure. 

In the coming days, this article will be expanded to share more information announcements from the 2023 Budget, and to include feedback from additional stakeholders.  

Preliminary Budget highlights for Atlantic Canada’s energy sector 

This list is not exhaustive but will be updated in the coming days. 

  • A firm commitment to fund the Atlantic Loop, possibly in-part through the Canada Infrastructure Bank.  
    • “The federal government is committed to advancing the Atlantic Loop—a series of interprovincial transmission lines that will provide clean electricity between Quebec, New Brunswick, and Nova Scotia—and is currently negotiating with provinces and utilities to identify a clear path to deliver the project by 2030.” 
  • The Canada Infrastructure Bank’s role is expanding to invest at least $20 billion to support the building of major clean electricity and clean growth infrastructure projects 
  • A new Clean Electricity Investment Tax credit for 15% of most clean generation and interprovincial transmission investments. This new credit will be available to taxable and non-taxable entities such as Crown corporations and publicly owned utilities, corporations owned by Indigenous communities, and pension funds. 
  • $3 billion over 13 years, starting in 2023-24, for Natural Resources Canada to recapitalize key funding programs including: Smart Renewables and Electrification Pathways, Smart Grids, and to help capitalize offshore wind development
  • Expanded eligibility for the Clean Technology Investment Tax Credit (30%) to include geothermal energy systems and the ITC phase-out will now begin in 2034. 
  • Announced the details of the new Clean Hydrogen Investment Tax Credit. The levels of support will vary from 15 to 40% of eligible project costs, with a greater return for cleaner hydrogen projects. This tax credit will also extend a 15% tax credit to equipment needed to convert hydrogen into ammonia, in order to transport the hydrogen. 
  • A Clean Technology Manufacturing Investment Tax Credit will provide refundable tax credit (30%) for investments in new machinery and equipment used to manufacture or process key clean technologies, and extract, process, or recycle key critical minerals, including manufacturing of renewable or nuclear energy equipment. 
  • A commitment to create a plan to improve efficiency in impact assessment and permitting processes for major projects by the end of this year. 
  • Investments with the Canada Growth Fund will include carbon contracts for difference (CCFDs), to help provide certainty to major investments. These contracts would backstop the future price of carbon or hydrogen, for examples, to help provide predictability to help de-risk major projects. The government will also consult on a broader approach to CCFDs to complement this Canada Growth Fund’s approach. 

Stakeholder comments 

“With one of the cleanest electricity grids in the world, achieving our climate goals and electrifying Canada can be done… we just needed to build it. Today’s federal budget puts Canada’s electricity providers on a path to do so. We are ready to get to work to make Canada’s electricity, clean, affordable and reliable for all Canadians.” 

– Francis Bradley, CEO, Electricity Canada 

 “The U.S. Inflation Reduction Act (IRA) is a game-changer and Federal Budget 2023 falls short in establishing investment parity for clean fuel production in Canada. Billions of dollars of investments are awaiting final decision and lack of clarity and targeted measures only adds to the uncertainty for the future of low-carbon fuel production in Canada.” 

– Bob Larocque, President and CEO, Canadian Fuels Association 

More information