The 2023 federal budget is using established tools to move the economy in a new green direction.
While the budget, introduced by Finance Minister Chrystia Freeland on March 28, focused on affordability and health and dental care, it also pushed for a greener, high-tech economy through increased innovation along with refocusing established programs and organizations.
The budget proposes the introduction of legislation to establish the Canada Innovation Corporation (CIC), a new Crown corporation with a mandate to “increase Canadian business expenditure on research and development across all sectors and regions of Canada.”
The Canada Growth Fund, introduced in the 2022 Fall Economic Statement, is a $15 billion arm’s length public investment vehicle and was incorporated as a subsidiary of the Canada Development Investment Corporation in December 2022.
The 2023 budget announced the federal government intends to introduce legislative amendments to enable the Public Sector Pension Investment Board, a federal crown corporation with more than $225 billion in assets, to manage the growth fund’s assets as it begins investing in the first half of 2023. The legislation is planned for fall 2023.
Previous to the release of the budget, the Department of Finance Canada released a blueprint for the corporation in February that stated the CIC will deliver funding and advisory services to encourage Canadian firms to initiate and scale more research and development activities in Canada. This will be funded through an annual statutory transfer with an initial budget of $2.6 billion over four years starting in 2023-2024.
The budget also highlighted the Strategic Innovation Fund (SIF), created in 2018 to provide financing for large projects and has “used $6.9 billion in contributions to leverage $67 billion in private investment across 107 projects.”
Approximately $500 million over 10 years has been allotted to the SIF to support development and application of clean technologies and will direct up to $1.5 billion of its existing resources towards projects in industrial transformation, clean technologies and critical minerals, the document stated.
Previous SIF project investment included a $200 million contribution in Algoma Steel Inc. in Sault Ste. Marie, Ont. to transition to electric steelmaking processes, a $25 million contribution to Burnaby, B.C.- based Svante Technologies Inc. to reduce heavy industrial emissions through carbon capture technology and $47.5 million to Moltex Energy Canada Inc. in St. John, N.B. to support the production of non-emitting energy through small modular reactor research and technology development.