Trudeau’s climate tax credits will cost billions more than anticipated: report

The total cost of tax credits for electric vehicle production, carbon capture, and clean electricity is expected to be $103 billion through 2035. It is uncertain what Canadians have to gain.

Trudeau’s climate tax credits will cost billions more than anticipated: report
The Canadian Press / Sean Kilpatrick
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Canada’s climate alarmist crusade just got more expensive, according to the Parliamentary Budget Office.

Climate tax credits will cost billions more than claimed by cabinet, the agency said Wednesday. Analysts uncovered the costs of meeting the 2050 ‘net-zero’ targets were miscalculated.

“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,” said the report

The total cost of tax credits for electric vehicle production, carbon capture, clean electricity, clean hydrogen and clean manufacturing is expected to be $103 billion through 2035, reported Blacklock’s Reporter.

Regardless, the 2050 targets are “not likely possible.” 

It is also uncertain what Canadians have to gain from the $103 billion investment, said Fiscal Cost. 

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

“The impact of the projected investments in clean technologies on the economic outlook is uncertain,” said the report. “Some investment will be offset by declines in spending on fossil fuels and other industries.”

In addition to financial support, Energy NL, a trade group representing Newfoundland and Labrador resource firms including offshore oil and gas companies, said  policy and legislative backing is necessary. 

“Canada will need 121 terawatt hours of new supply to replace carbon sources,” wrote Energy NL in a 2023 submission to the Senate energy committee. “That is the equivalent of four Churchill Falls.”

Labrador’s Churchill Falls Generation Station is the largest hydroelectric plant in Canada outside Québec. “To meet net zero 2050 targets Canada’s electricity generation capacity needs to grow by two to three times bigger than today,” said the submission. 

The Canadian Electricity Association has estimated utility refits would cost $350 billion at ratepayers’ expense. The Department of Environment put costs at more than $400 billion.

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

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

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