Trudeau’s Green Energy Tax Plan is Hurting Canadians
The Trudeau government’s clean energy tax incentive program is supposed to speed up the transition to a greener economy. Instead, it will destabilise Canada’s construction industry, cause wage inflation, and result in fewer, more expensive green energy projects.
The federal government’s proposed Labour Requirement is a serious problem, not just for our 40,000+ members, but for all Canadians.
PCA member companies welcome the opportunity to play a greater role in helping Canada achieve its clean energy targets.
But Canada won’t get there without the right plan.
The federal government has announced clean energy tax credits ranging from 15 to 40 percent for capital investments in low-carbon energy generation and technology. Incentivizing companies to speed up the shift to a net-zero economy is the right move.
What isn’t right, is the government’s proposed artificial wage and benefit rates. Companies building green energy projects must comply, in order to receive the full tax credit.
Today, at the height of a skilled labour shortage, construction workers are earning more than ever. That’s how a competitive labour market works.
Governments have no role to play in deciding high end construction worker remuneration.
Tying tax credits to artificial wage and benefit rates will cause massive disruption across Canada’s construction industry. It will set back Canada’s green energy efforts by raising project costs, discouraging investment and causing some businesses to rethink their project plans altogether.
That means Canadians will lose out on valuable investment, economic opportunities and jobs.
Don’t let that happen. Tell your local elected official that the federal government should not be interfering in the construction labour market. There’s just too much at stake.
PCA member companies support federal tax incentives to speed up the transition to a greener economy.
However, requiring companies to comply with proposed artificial wage and benefit rates, (in order to qualify for the full Investment Tax Credit) will reduce competition, translate into higher costs, more government red tape, and fewer clean energy projects.
An arbitrary wage and benefit rate would cause massive disruption across the construction industry, and set back Canada’s green energy transition.
– Potential project cancellations: Currently, two major projects planned in Alberta are the Fort Saskatchewan Path2Zero Expansion Project by Dow Canada and the Net-Zero Hydrogen Energy Complex by Air Products. Preliminary estimates show the impact of what the government is contemplating will increase project risks, reduce competition, and amount to hundreds of millions of dollars in added costs for these two projects alone. This could result in project delays or even cancellation.
– The ITC program will inflate wages and benefits across the construction industry. For example, take the wind and solar sectors, where wage rates are not equivalent to major industrial projects. The artificial rise in workforce remuneration will result in wind and solar project proponents taking their projects and investments south of the border.
– Government is not known for its efficiency. Imagine the gov’t administering mandatory wage and benefit rates including overseeing company compliance across many different trades, projects and regions. This will no doubt require another layer of bureaucracy and added cost. Small businesses who aren’t equipped to handle more paperwork and overhaul their contract pricing are unlikely to bid on projects. Less competition means higher costs.
This is no time for politicking, or for government picking winners and losers in the clean energy race. The challenge is too great for government not to get it right.
Canadians will wind up paying a lot more for fewer green energy projects.
If the government is intent on interfering in the construction market and mandating its proposed arbitrary wage and benefit rate, that will drive up construction costs, increase project risk, and drive away investors who will take their green energy projects elsewhere.
Today, in the midst of an affordability and housing crisis, shouldn’t governments be looking for ways to build more efficiently?
Governments have no role to play in deciding top end worker remuneration.
Today, at the height of a skilled labour shortage, skilled construction workers are commanding and receiving highly competitive and rewarding remuneration packages. That’s how a competitive construction market works.
Canadians deserve a “made in Canada” approach to a greener economy,
not a carbon copy of the U.S. government’s tax incentive plan, that could very well backfire here.
Letter To Premier Danielle Smith
Dear Premier Smith,
We are writing to express our serious concerns with an aspect of the federal government’s massive Clean Technology Investment Tax Credits (ITCs).
While member companies of the Progressive Contractors Association of Canada (PCA) support federal tax incentives to speed up the transition to a greener economy, requiring companies to comply with a proposed artificially high wage rate and benefits, in order to qualify for the full Investment Tax Credit (ITC), will translate into higher costs, more government red tape, and fewer clean energy projects.
Edmonton (Sept 13, 2023) – Federal clean energy tax credits aimed at incentivizing companies to speed up the transition to a net zero economy, may do just the opposite, destabilizing the...