Toronto, March 23, 2023. OCTIA applauds the recognition of cleantech as a high-growth sector in the Ontario 2023 budget. The Budget highlights Ontario’s co-investments in clean steel as well aselectric vehicle (EV) and EV battery production facilities. It also introduces a 10% refundable Manufacturing Investment Tax Credit (MITC) for Ontario based businesses that would also apply to clean technology companies. However, there’s more the province could do to fully leverage the high economic potential of Ontario’s cleantech sector. Ontario’s economic growth and competitiveness depend on it.
The MITC will positively impact Ontario’s cleantech sector. Other jurisdictions such as the U.S. and the European Union, however, have introduced competitive policies that future-proof their economies and shape very attractive business environments for cleantech companies. As a direct point of comparison: the U.S. has a 30% refundable manufacturing tax credit specifically for clean technology manufacturers.
Ontario is at real risk of losing innovative cleantech companies, the jobs they bring to the province, and economic benefits they are creating to other jurisdictions. To prevent this from happening, the provincial government has an important role to play.
One effective way to increase the flow of private capital into cleantech would be a loan guarantee program for cleantech companies. Provincial tax credits could complement federal tax credits to enhance their effectiveness. Another urgently needed mechanism to de-risk cleantech investments is provincial and municipal procurement. The inclusion of a life-cycle assessment in the procurement process would increase cleantech procurement significantly while de-risking future investments. Proceeds from Ontario’s Emissions Performance Standards (EPS) Program could be used to create an agency similar to Emission Reductions Alberta (ERA) that co-invests in industrial decarbonization projects and enables cleantech pilots. These actions would help Ontario to compete more efficiently and effectively in the global marketplace. All of this is possible at a relatively low cost to the government.
Quotes from OCTIA Board Directors:
“The global clean economy is growing, and there is and increasingly will be a huge demand for climate tech solutions and sustainably sourced critical minerals. Ontario will be able to reap the economic benefits, if the province acts now,” – Peter McArthur, Chair, OCTIA.
“With its promising base of growing cleantech companies, Ontario has all the ingredients to build sustainable critical mineral, battery, EV and renewable supply chains that are in high demand. The province needs to take further action to make this happen – from building out its charging infrastructure to changing old regulations that don’t meet the clean economy’s requirements,” – Carter Li, CEO & Founder, SWTCH.
“At the moment, the grass is greener on the other side and Ontario’s clean technology manufacturers need decisive action from the federal and provincial governments to keep creating jobs in the province.” — Ibraheem Khan, CEO, Extract Energy.
Interviews with Executive Director and quoted Board Directors available upon request. Contact: Maike Althaus, email@example.com