Fall budget update promises tax credits for clean electricity and hydrogen production

Finance Minister Chrystia Freeland's fall economic statement creates two new federal tax credits for clean technology and low-emitting hydrogen production.

The statement is Freeland's first big push to keep Canada in the clean-tech economy race in the shadow of the massive Inflation Reduction Act south of the border.

But she leaves to next year's budget a lot of the heavy lifting to respond to the U.S. government's massive investments in everything from critical minerals to electric cars and battery parts.

The fiscal update says the specifics of the promised tax credit for clean hydrogen production and new investment measures to spur growth in electric vehicle and battery manufacturing are still in development.

There are more details on the new tax credit for investments in clean electricity generation, energy storage systems and low-carbon heating equipment, including that it will cost nearly $6.7 billion over the next five years and launch the day the 2023 federal budget is tabled.

It will also be the first Canadian tax credit that is more lucrative for companies that pay a fair market wage and have training programs for young workers.