Climate tax credits off by billions, report says

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Achieving “net zero” carbon emissions in Canada will reportedly cost billions more than what the federal government has claimed.

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On Wednesday, the Budget Office said a calculation error was uncovered for tax credits intended for a green economy by 2050, according to Blacklock’s Reporter.

“Budget Office estimates are $10 billion higher compared to Budget 2024 estimates,” said the report, Long-Term Fiscal Cost Of Major Economic Investment Tax Credits.

“The difference is mostly attributable to higher projected eligible investments in the electricity generation sector.”

Credits for new projects in electric vehicle production, carbon capture, clean electricity, clean hydrogen and clean manufacturing were calculated, and analysts found more than $100 billion in costs.

“We did not estimate the long-term economic impact of these investment tax credits,” the report said. “Such estimates would need to account for the interaction with other climate policies which is beyond the scope of this report.”

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The report added it was uncertain how clean technology investments would affect the economic outlook of the country.

“Some investment will be offset by declines in spending on fossil fuels and other industries,” the report said.

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The Canadian Electricity Association has said $350 billion worth of retrofits and upgrades are needed to reach the federal government’s climate goals, while Environment and Climate Change Canada pegged that number at $400 billion.

“It is assumed the majority of costs incurred by electric utilities would be ultimately passed onto consumers,” Environment Canada wrote in a Regulatory Impact Analysis Statement last year.

“Lower income households would pay a higher proportion of their household income to cover these costs relative to higher income households.”

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