November 21, 2023

Fall Economic Statement promotes energy infrastructure and Indigenous investment but lacks clear plan for long-term growth

Calgary, Alberta—Today’s Fall Economic Statement focuses on housing and affordability measures but also makes important progress on supporting investment in clean energy and technology, and Indigenous economic participation. However, it falls short of offering a clear path for productivity growth and fiscal sustainability.

Most notably, we were encouraged to see a commitment to specific and accelerated timelines for introducing a range of tax credits to incentivize investment in clean tech and decarbonization. Legislation to retroactively implement investment tax credits (ITCs) for carbon capture, utilization and storage, clean technology, and clean hydrogen will be introduced this fall. These incentives are critically important to Alberta businesses looking to reduce their emissions, especially those in the oil and gas sector and other energy-intensive industries. In addition, we were pleased to see the clean technology and clean electricity ITCs expanded to include the use of waste biomass to generate heat and electricity. We look forward to additional details when legislation is introduced.

As well, we were pleased to see the federal government commit to developing an Indigenous Loan Guarantee Program to promote Indigenous equity ownership in major projects in the natural resource sector. The Council has strongly advocated for this program, and we look forward to seeing further details in Budget 2024.

However, there are two areas in which we believe further action is needed.

First, the federal government needs to do more to ensure Canada is an attractive place in which to invest. The government’s own projections expect slow economic growth (and likely negative per capita growth) through 2028. Canada lacks a clear plan to enable the productivity gains needed to accelerate the economy, boost incomes and prosperity. In the context of years of stagnation, it is critical to ensure that Canadian businesses can compete globally.

Second, we are concerned about the government adding billions of dollars to future debt in this statement. While federal debt servicing costs remain low compared to the 1990s, they have risen significantly in recent years, diverting funds away from more productive uses. A tighter focus on fiscal discipline, together with a strong plan for economic growth, will minimize the future debt burden, supporting economic growth and prosperity for Canadians for generations.

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