Apr 14, 2022
The federal budget released earlier this month includes a new tax credit for carbon capture, utilization and storage, a key tool with which Canada aims to meet its climate and emissions reduction goals. The proposal includes a 50% tax credit for companies who invest in carbon capture equipment and 37% if they invest in carbon transportation, storage and usage. Notably, however, investments in enhanced oil recovery — a process that uses carbon dioxide or other gases to enable extraction of more crude oil from underground — are not eligible for the credit.
“Let me say that the 50 per cent tax credit is a step in the right direction,” Osler Special Advisor Brad Wall tells BNN Bloomberg, but adds that it doesn’t quite reach its potential.
“[The federal government] stopped short of actually giving this quiver all the arrows that it could and, very significantly, that would be enhanced oil recovery.”
That exclusion, he argues, could hamper progress toward Canada’s climate goals.
“What we're depriving ourselves of, in terms of this new tax credit, is the opportunity for a more rapid and broader base deployment of this technology,” he says.
“My counterpoint would be oil is going to be in demand. As long as it is, Canada should be at the front of that line in supplying it. I think it's actually the responsible thing globally and certainly good for our economy, as well as the benefits of Canada supplying it.”
You can read the full article, “Carbon capture credit on the right path, but falls short: Brad Wall,” at the BNN Bloomberg website.