Canada’s Building Trades Unions commends the Canadian Government for committing to implementing financial incentives for investments in clean technologies and hydrogen tied to good jobs to reach our net-zero goals. In order to remain competitive with the United States’ Inflation Reduction Act, it is necessary for Canada to respond strategically and strongly to ensure we maximize opportunity for Canadian industry and Canadian workers. The announcement made in the Fall Economic Statement was a step in the right direction and Budget 2023 provides us with the opportunity to further strengthen these tax credits to ensure they are tied to good labour conditions to maximize benefits for the greater economy.
The investment tax credits need to be strengthened to remain competitive with the United States’ tax credits (which are increased by five times when prevailing wage and apprenticeship requirements are met) and to genuinely incentivize good labour conditions including strong wages and apprenticeship opportunities.
- Increasing the Investment Tax Credit for Clean Technologies up to a maximum of 40 per cent if good labour conditions, as per the below definition of prevailing wage, are met.
- Increasing the Investment Tax Credit for Clean Hydrogen up to a maximum of 50 per cent if good labour conditions, as per the below definition of prevailing wage, are met.
Defining Prevailing Wage
As committed to in the Fall Economic Statement, eligibility of the investment tax credit is dependent on meeting prevailing wage requirements. If the Government is to forgo tax revenue in the form of investment tax credits, the definition of prevailing wage needs to be clearly defined to ensure the maximum benefits for Canadians.
- The Prevailing Wage should be determined by the best total wage package (that includes benefits and pension) available negotiated in the province, to ensure the creation of the best middle class job opportunities to attract Canadians to the skilled trades.
Apprenticeship and Diversity
Investment Tax Credits must be tied to the creation of apprenticeship opportunities and focused on diversifying the skilled trades. Apprenticeships ensure the longevity of the industry by increasing entrants into the sector.
- The overall apprenticeship hours to journeyperson hours be 25 per cent for all worker hours averaged over a project;
- Minimum of 10 per cent of all hours worked to be performed by underrepresented groups (Indigenous Peoples, Women, Black Canadians, people of colour), veterans.
The Canadian Government has an unmatched opportunity to define parameters for use of these tax credits that will not only set Canada on the course to net-zero but also utilize the transition to clean technology as a nation building exercise that puts Canadians first.
These recommendations are intended to minimize negative impacts of the transition to net-zero on workers, communities, and our economy. See the full submission here.