432-00552 (Natural resources and energy)

Importance of the energy sector/clean tech to Canada:

• Canada’s energy sector is a key contributor to employment, economic growth and social development in Alberta and across Canada. As we move forward to transform our economy towards a net-zero future, workers and innovators are going to be an essential part of this transition building on the innovation and expertise across the energy sector. 
• Building on the Pan-Canadian Framework on Clean Growth and Climate Change, our new strengthened climate plan, A Healthy Environment and a Healthy Economy, announced in December 2020, continues to advance the next generation of clean technology and grow the role of renewable energy. It includes $15 billion in investments for 64 strengthened and new federal policies, programs and investments to cut pollution and build a stronger, cleaner, more resilient and inclusive economy.
• We are committed to promoting clean economic growth by helping Canadian businesses take advantage of the massive transition that Canada and the global economy must make to reach the target of net-zero emissions.
• We are committed to continuing to work with the sector to grow the economy, and to better align climate change objectives, including achieving emissions reductions through innovation across the energy sector. 

Federal support for energy sector

Government of Canada investments:

• $3 billion since 2016 to help Canadian companies innovate, develop new and improved technologies, reduce carbon pollution, strengthen competitiveness and create jobs. This includes investments in things like clean energy, clean hydrogen, carbon capture, use and storage, wind, solar, energy storage and smart grids.
• Infrastructure improvements to help the transition away from coal, which will make it easier for affordable clean energy.
• $750 million over five years for Sustainable Development Technology Canada to support startups and scale up companies to enable pre-commercial clean technologies to successfully demonstrate feasibility, as well as support early commercialization efforts.
• $50 million to invest in technologies and $100 million to leverage private sector co-investments through the Clean Resource Innovation Network – a pan-Canadian network focused on ensuring Canada’s energy resources can be sustainably developed and integrated into the global energy supply.
• Up to $1.72 billion, including funding to the governments of Alberta, Saskatchewan, and British Columbia, and the Alberta Orphan Well Association, to clean up orphan and/or inactive oil and gas wells – creating thousands of jobs and having lasting environmental benefits.
• Launching a Net-Zero Challenge for large emitters to support Canadian industries in developing and implementing plans to transition their facilities to net-zero emissions by 2050.
• $3 billion in the Strategic Innovation Fund’s Net-Zero Accelerator Fund to rapidly expedite decarbonization projects with large emitters, scale-up clean technology and accelerate Canada’s industrial transformation across all sectors.
• $1.5 billion in a Low-carbon and Zero-emissions Fuels Fund to increase the production and use of low-carbon fuels (e.g., hydrogen, biocrude, renewable natural gas and diesel, cellulosic ethanol).
• $750-million Emission Reduction Funds provides loans for projects that reduce or eliminate greenhouse gas emissions with a focus on methane and supports reducing the greenhouse gas intensity of fuel production.  Projects that entirely eliminate methane have a non-repayable portion.

The Government of Canada thanks the petitioners for expressing their views in support of energy policies for Alberta’s Industrial Heartland.

The government understands the importance of the region’s natural resources to Canadians, providing jobs and opportunities that contribute to the national economy. While Canada takes climate action, the government recognizes that the energy sector in Alberta’s Industrial Heartland has a significant role to play. A strong energy sector will help to ensure that the environment is protected as it drives economic growth.

Ongoing federal support to Alberta’s Industrial Heartland energy sector includes:

• Investing $1.5 billion in the Low-carbon and Zero-emissions Fuels Fund. This will increase the production and use of low-carbon fuels such as hydrogen, biocrude, renewable natural gas and diesel, and cellulosic ethanol.
• Developing a carbon capture, utilization and storage strategy to cut industrial emissions. 
• Unveiling a national Hydrogen Strategy that will cement Canada’s position as a leading global supplier of hydrogen fuels. Vast natural gas and petroleum resources endow Canada with a competitive advantage in the production of clean hydrogen. A growing hydrogen sector also opens the door to new markets for Canada’s conventional energy resources.
• Advancing plans to eliminate plastic waste in the environment through the circular economy. The knowledge and experience of the petrochemical industry in Alberta’s Industrial Heartland will be instrumental in the development of valuable solutions using plastic waste. Developing the circular economy presents an opportunity for the energy sector to re-imagine its refining capacity.

Alberta’s Industrial Heartland plays an important role in Canada’s sustainable development. There are many positive examples of interrelated industries already working together in the region, benefitting from the Heartland’s unique characteristics, economic opportunities and the high-quality renewable carbon feedstock produced by the energy sector. The Government of Canada will continue to work, alongside the Government of Alberta, with Heartland stakeholders to grow energy-related manufacturing in a way that adds value to the province’s hydrocarbon sector. The government supports its success as Alberta’s Industrial Heartland transitions to an increasingly low-carbon future.

The Government of Canada recognizes the importance of Canada’s energy sector, which directly and indirectly supports hundreds of thousands of middle class families and their communities. As the Government of Canada works to rebuild a more sustainable and resilient economy, our industrial advantage will depend on the speed and success of decarbonization efforts, ability to meet the demands of domestic and global consumers for low-carbon goods and services, and efforts to rapidly scale up low-carbon technologies. Canadian workers and businesses are well-positioned to be leaders as we build back to deliver a stronger economy that thrives in a low-carbon world.

Support for Energy-Related Manufacturing

Canada’s industrial sectors – such as manufacturing, chemicals, cement and oil and gas – play a key role in our economy, and will be vital in the transition towards a net-zero future. Canada’s strengthened climate plan, “A Healthy Environment and a Healthy Economy”, was announced in December 2020 and contains 64 strengthened and new federal policies, programs and investments to reduce emissions and build a stronger, cleaner, more resilient and inclusive economy. The Plan includes $3 billion for the Strategic Innovation Fund – Net Zero Accelerator to support the adoption and deployment of decarbonization solutions in Canadian industry and $1.5 billion to increase the production and use of low- carbon fuels. A focus of the Government as we transition to a net-zero economy will be on supporting the rapid scale up of existing and new, strategic clean technologies and supporting the market for clean fuels in Canada, including through Canada’s Hydrogen Strategy. The Government is committed to working with Canadian businesses and workers in advancing a net-zero economy. 

Support for Alberta and the Energy Sector

Canada’s strengthened climate plan builds off previous measures targeted at the energy sector as part of the Government’s COVID-19 economic response. Due to the unprecedented challenges for workers and companies in the energy sector as a result of the pandemic, the Government allocated $2.8 billion to support energy sector workers and help the industry reduce its emissions. This includes $750 million for the Emissions Reduction Fund to help oil and gas companies reduce methane emissions, $1.7 billion to the Western provinces and Alberta Orphan Wells Association to support work to clean up orphan and inactive oil and gas wells, and $320 million for Newfoundland and Labrador to support workers in the offshore sector. This funding will sustain jobs in the energy sector, while also supporting the broader energy-related supply chain.

Support through Accelerated Capital Cost Allowances

In the 2018 Fall Economic Statement, the Government introduced the Accelerated Investment Incentive, which provides an enhanced first-year capital cost allowance of up to three times the first-year allowance otherwise available for all businesses, including in the energy sector. For businesses in the manufacturing and processing sector, including energy transformation, the 2018 Fall Economic Statement also announced an enhanced first-year capital cost allowance of 100 per cent for investments in machinery and equipment. These measures will be available for investments that become available for use before 2028, subject to a phase-out starting in 2024.

The petrochemicals and energy related manufacturing sectors fulfill a critical function for the country, supporting the Canadians economy and providing a myriad of products. This function, includes providing equipment and products that are vital to our collective efforts to contain the COVID-19 pandemic.

The chemicals and advanced manufacturing industry is an important driver for innovation and growth in the Canadian economy. Demand for chemicals will continue to grow in key markets to meet consumer demands for new materials and technologies, while the sector works to minimize environmental impacts and create more circular product lifecycles. Canada has a significant and growing petrochemical sector footprint – driven by a strong productivity advantage and strategic linkages to both upstream and downstream sectors. Investment in the industry and new value chains such as propane to propylene, help complement and support the upstream supply industry.

Advanced manufacturing brings together several advanced and clean technologies relevant to the chemical sector to improve productivity, reduce risk, innovate, and generate new income streams. It is playing an important role in transforming Canada's petrochemical sector to achieve greater growth and competitiveness. Programs like the Clean Growth Hub, a unique whole-of-government focal point for clean technology dedicated to helping Canadians navigate federal programs and services, have been a strategic part of government’s approach to connecting these innovators with the support they need to conduct research and demonstration, access new markets, scale up and export. 

The Government of Canada has implemented a number of initiatives that are available and beneficial to the Alberta Industrial Heartland region. In Budget 2017, the Government of Canada established the Strategic Innovation Fund (SIF), which supports large-scale, transformative and collaborative projects that help position Canada to prosper in the global knowledge-based economy, particularly in innovative petrochemical and advanced manufacturing projects. Through this program, Canada is providing $49 million to Inter Pipeline, who is constructing a $3.5-billion Heartland Petrochemical Complex in Strathcona County, and another $49 million to the Canada Kuwait Petrochemical Corporation (CKPC), to construct a new $4.5-billion polypropylene complex in Sturgeon County in Alberta. Both the projects would generate significant economic, innovative and public benefits, resulting in the creation of skilled, high-paying jobs, reduced environmental impacts and value-added for regional supply chains.

The Government of Canada's Innovation and Skills Plan included the establishment of a number of Economic Strategy Tables (EST) to enable collaboration and support economic growth in six key sectors including the Agrifood EST, the Advanced Manufacturing EST and the Resources of the Future EST. The EST initiative identified opportunities for Canada to become a global competitive force in advanced manufacturing and natural resources through diversifying export market, developing new products and adopting clean technology that will make Canada more productive and attractive.

As Canada continues to implement its strengthened Climate Plan, the Alberta Industrial Heartland’s focus on clean tech innovation, job creation and strengthening economic growth will be important. Continued collaboration between the federal, provincial and territorial governments and the private sector will ensure we are able to build a prosperous, greener economy to the benefit of all Canadians.