2023 Federal Budget: A “Made-in-Canada Plan”

From: Impact Public Affairs

On Tuesday, Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled the 2023 federal budget – a “Made-in-Canada Plan.”  With the pandemic in the rear-view mirror and financial uncertainty on the horizon, the budget takes a targeted look at sustainable spending while continuing to follow-through on programs, all while bringing the deficit down.

The budget included three main themes: green technology investments, healthcare spending, and support for the rising cost of living. To attract investments in new machinery and equipment, the budget proposes a 15% to 30% tax credit for eligible investments in green technology. On the healthcare front, the budget includes a Canadian Dental Care Plan, as well as further details on the recently announced healthcare transfers. To support Canadians with the rising cost of living, the budget proposes to introduce a Grocery Rebate, as well as a need to target “junk fees” charged by some companies.

The federal government is expecting a deficit of $40.1 billion in budget 2023-2024, a small reduction from the 2022 budget of $43 billion. The federal government is projecting deficits to lower throughout the subsequent years.

Highlights Include:

  • Budget 2023 proposes to provide $500 million over ten years to the Strategic Innovation Fund to support the development and application of clean technologies in Canada. The Strategic Innovation Fund will also direct up to $1.5 billion of its existing resources towards projects in sectors including clean technologies, critical minerals, and industrial transformation.
  • Budget 2023 proposes to expand eligibility for the Clean Technology Investment Tax Credit to include geothermal energy systems that are eligible for capital cost allowance Classes 43.1 and 43.2. The Clean Technology Investment Tax Credit would be available to businesses investing in such property that is acquired and becomes available for use on or after the day of Budget 2023. Projects that will co-produce oil, gas, or other fossil fuels would not be eligible for the Clean Technology Investment Tax Credit.
  • Budget 2023 also proposes to modify the phase-out of the Clean Technology Investment Tax Credit. Rather than starting the phase-out in 2032, the tax credit would now begin to phase out in 2034 and would not be available after that year.
  • To help tradespeople invest in the equipment they need, Budget 2023 proposes to double the maximum employment deduction for tradespeople’s tool expenses from $500 to $1,000.

These themes and priorities align with some of HRAI’s recent key priorities for government, which have included measures to encourage investment in HVACR cleantech product manufacturing in Canada, workforce development and tax supports for investing in commercial building upgrades.  HRAI will engage with relevant government departments in the weeks ahead to gain a better understanding of how these measures will impact the sector.

For more information, contact Martin Luymes at 1-800-267-2231 ext. 235 or email mluymes@hrai.ca.

Back to Newsletters