OTTAWA – The federal government is dedicating almost half of its clean-tech economic investment fund to special contracts intended to give companies the confidence they need to make major investments to lower their greenhouse-gas emissions.
Today’s fall economic statement says the new $15-billion Canada Growth Fund will allocate up to $7 billion for contracts for difference.
Oil and gas companies have been waiting on such contracts to help maintain a competitive position internationally.
They could be the final requirement before major oilsands companies start building massive carbon capture and storage projects that are critical if Canada has any chance of meeting its next emission targets.
Carbon pricing created an incentive to companies to invest in projects that lower their emissions, and therefore their carbon price bills, but that’s only the case if the investments cost less than what the company would pay for the carbon price.
Contracts for difference are a guarantee that if the carbon price doesn’t rise as projected, the companies will get back the difference between what they ended up investing in clean technology and what they would have spent on carbon pricing.
This report by The Canadian Press was first published Nov. 21, 2023.