TORONTO/OTTAWA (Reuters) - Canadian companies working on energy-efficient innovations are looking to Tuesday’s federal budget to deliver tax breaks and other incentives as part of billions of dollars of stimulus spending pledged by the new Liberal government.
The Liberals, led by Prime Minister Justin Trudeau, were elected last October after promising deficit spending to boost the economy, with money for green projects accounting for one-third of C$5 billion ($3.83 billion) in infrastructure spending in fiscal 2016-17.
Green technology executives say their industry boasts plenty of “shovel-ready” projects of the type Ottawa hopes will boost near-term growth. But they also want support that will benefit them in the longer term.
“There is a massive global opportunity here, and we happen to be ready to take advantage of it,” said Tom Rand, whose ArcTern Ventures fund has C$45 million invested in domestic companies and aims to raise another C$200 million this year.
Canada had almost $12 billion of a roughly $1 trillion global market for green technology in 2015, according to Analytica Advisors. But its market share has shrunk since 2008 as countries such as Germany and South Korea increasingly support their own companies.
Rand and other industry players want Tuesday’s budget to include C$1 billion in loan guarantees to backstop proven technologies pitching for their first commercial contracts. They are also keen for tax credits akin to those for investments in riskier oil and gas and mining projects.
The industry players want C$1.25 billion for Sustainable Development Technology Canada, a government funded foundation that backs green technology companies, and C$500 million to boost venture capital backing.
“It’s a land grab out there, and the quicker Canada can get its technologies into the global market for clean energy, the bigger share we’re going to have down the road,” said Curtis VanWalleghem, chief executive of Hydrostor Inc, an underwater energy storage project developer.
But some industry watchers warn that Ottawa may hold off on big spending until 2017, when a national carbon plan may be in place.
Trudeau, who won power pledging to do more to fight global warming, has been working with provincial leaders on a broader climate strategy, including a national carbon price.
“This one is a stepping stone to what we hope will be a very big investment in a clean energy economy in a year’s time,” said Clare Demerse, senior policy advisor at Clean Energy Canada, a think-tank based at Simon Fraser University.
Editing by Bernadette Baum