Chapter 2: 
Investing to Raise Wages

We are building a future where Canadians get good jobs with high wages they can count on, and that starts with growing the economy.

Canada's future economic prosperity—and sustained wage increases for Canadians—depends on sustained growth. To secure this growth, we are investing in productivity and innovation, bringing more Canadians into the workforce, and protecting and strengthening our trading relationships with our closest allies and partners. In the face of uncertainty following the U.S. election, securing recent strong flows of private capital into Canada and ensuring Canada is competitive in the North American economy are of critical importance to Canada's prosperity.

Our strategic investments in clean technology, life sciences, emerging technologies, and power generation are already building a business environment that is crowding in private capital and creating more good jobs with higher wages for Canadians. Combined with our action to reduce everyday costs, our efforts to create the kind of economic growth that raises Canadians' wages will mean they have more money in their pockets to save for their future, and build a better life.

We must redouble our efforts to adapt to the evolving global trade landscape, and ensure Canada is prepared for a swift response to any economic threats, including tariffs. To do that, we are investing in a more productive, more innovative economy that capitalizes on Canada's strengths—including an abundance of natural resources and a highly skilled workforce—while building on the proven Team Canada approach through which we secured the new NAFTA in 2019.

The government's economic plan is taking action across four fronts to make workers better off. First is making generational investments that reduce the cost of living for Canadians, including $10-a-day child care, which is unlocking the full potential of Canada's labour force. Second, the government is investing $2.4 billion to secure our AI advantage and nearly $5 billion in Canadian brainpower to ensure Canada's best and brightest minds can discover the next scientific breakthroughs here at home. Third is overcoming ongoing geopolitical uncertainty and a rapidly changing global trade landscape by securing our economic ties with trusted trading partners. Fourth is ensuring Canada competes in the global industrial transition, which is why the federal government's $94 billion suite of major economic investment tax credits, most of which are now available to investors, support clean energy generation and the manufacturing of clean technology in Canada. Investing in our critical minerals and metals and using them to make our own supply chains more resilient and helping our allies do the same is part of this effort. So is diversifying our trade routes and strengthening our position as a global energy superpower, with nation building projects like the Trans Mountain Expansion and LNG Canada.

Building on these investments, the 2024 Fall Economic Statement announces new initiatives to secure economic growth and protect jobs, particularly in light of new economic uncertainties in North America and globally following the U.S. election. This includes further investments in clean technologies, facilitating investment here in Canada by Canadian pension funds, and government reciprocity policies that protect our national interests, at a time of rising economic nationalism. This Fall Economic Statement also updates on our work with allies to advance our collective interests and economic security.

Making Canada a Top Destination for Private Capital

Since 2015, the government's economic plan has been driving prosperity and creating growth. Strategic investments across the economy and in all regions of Canada have maintained Canada's attractiveness as a leading global destination for private capital.

Among the G7, in 2023, Canada received the most foreign direct investment per capita, according to the OECD. What's more, the latest data on investment intentions show that businesses are planning to significantly increase capital expenditures, especially in power generation and in those sectors critical to reaching net-zero emissions by 2050.

Actions the federal government has already taken to attract business investment, including in this Fall Economic Statement, are:

Expanding Canada's Energy Export Capacity with TMX, LNG Canada, and Cedar LNG

• Canada is strengthening its position as a global energy supplier, with significant advancements in exporting both oil and liquefied natural gas (LNG). In May 2024, the Trans Mountain Expansion Project became operational, boosting the pipeline's crude oil export capacity from 300,000 barrels per day to 890,000 barrels per day, enabling greater access to international markets. The TMX expansion has supported a narrowing of the WCS-WTI price differential, which since its recent peak of $27 in late 2023, has narrowed to about $12 since October.
• LNG Canada, in Kitimat, British Columbia is the country's largest LNG project and is set to begin operations in mid-2025. LNG Canada will have an initial export capacity of 14 million tonnes per year, delivering low-carbon LNG to Asian markets.
• In June 2024, Cedar LNG, another Kitimat-based project, reached its final investment decision. Once operational, Cedar LNG will become one of the first majority Indigenous-owned LNG export facilities, with a projected capacity of 3 million tonnes per year and best-in-class low emissions performance. The project underscores Canada's commitment to responsible energy development and economic partnerships with Indigenous communities.

Ensuring Canada's Tax and Incentive Competitiveness

• Canada is encouraging businesses to seize the investment opportunities of the global industrial transition, with major economic investment tax credits representing $94 billion in federal incentives.
• The government has now delivered four of its six major economic investment tax credits.
• The government will introduce legislation to deliver the next two major economic investment tax credits and proposed expansion and enhancement to other major economic investment tax credits.
• These measures are attracting investment and businesses are announcing major economic projects across economic sectors. These projects will not only reduce emissions, but also promote job creation and economic growth. Projects will be attracted across Canada, reflecting a wide range of economic opportunities that span different industrial sectors.  
• More broadly, Canada has the lowest marginal effective tax rate (METR) in the G7, and a 5.2 percentage point competitive advantage over the average U.S. METR.
• To ensure that Canada remains a competitive place to do business, the government is fully re-instating the Accelerated Investment Incentive and immediate expensing measures from 2025 to 2029, with a four-year phase out after 2029. The government is taking steps now to support Canada's competitiveness, while continuing to monitor developments on tax reform in the United States.

Crowding in Private Sector Capital for the Global Industrial Transition

• Canada is crowding in private investment in low-carbon projects, technologies, businesses, and supply chains through the Canada Growth Fund, a $15 billion, arm's length investment fund led by a world-leading team of public sector pension investment professionals. Since launching in 2023, the Canada Growth Fund has already committed about $3 billion to eight investments.
• Investing in major infrastructure projects that benefit Canadians and attract private capital, the Canada Infrastructure Bank (CIB) is using its $35 billion envelope and a range of innovative financing tools to build more infrastructure across the country. As of September 2024, the CIB has made over $13 billion in investment commitments for more than 70 projects across its green infrastructure, clean power, public transit, trade and transportation, and broadband infrastructure priority sectors, representing $36 billion in total capital costs.

Building Critical Trade Infrastructure

• Connecting Windsor, Ontario, to Detroit, Michigan, the Gordie Howe International Bridge is expected to open in fall 2025. With a $6.4 billion federal investment, this bridge will be an integral crossing allowing the efficient movement of people and goods.
• Investing $4.3 billion under the National Trade Corridors Fund (NTCF) to improve the movement of people and goods in Canada, and help Canadian businesses compete in key global markets. Projects funded under the NTCF include:

  • $150 million for the Port of Montreal's Contrecoeur expansion to develop a new state-of-the-art container terminal able to handle up to 1.15 million containers (TEUs);
  • $135 million for upgrades to the North Klondike Highway in Yukon to improve road safety, increase resilience to the impacts of climate change, and ensure reliable access to goods and services; and,
  • $100 million to Edmonton International Airport to build a new global cargo handling operation.
• Investing $30 million in the Ports of Montreal and Québec to electrify shore power operations, which will reduce the emissions of vessels while they are docked at the ports. 

Supporting Indigenous Economic Participation

• In April, the federal government announced the Indigenous Loan Guarantee Program, which will provide up to $5 billion in loan guarantees to support Indigenous equity ownership in projects in the natural resource and energy sectors. These loan guarantees will help lower the cost of borrowing for eligible Indigenous groups, enabling them to benefit from revenue-generating natural resource and energy assets that will return revenue to communities for generations to come.

Harnessing our Natural Resources

• The government has dedicated $3.8 billion for Canada's Critical Minerals Strategy, to secure Canada's position as the world's supplier of choice for critical minerals and the clean technologies they enable. This includes the $1.5 billion Critical Minerals Infrastructure Fund, which will support the development and deployment of clean energy and transportation infrastructure that will enable the development and expansion of critical minerals projects in Canada.
• Included in the suite of major economic investment tax credits is the Clean Technology Manufacturing investment tax credit, which is providing a 30 per cent incentive to invest in property used for manufacturing and processing activities, including the extraction and processing of 6 key critical minerals.

Global Leadership in Non-Emitting Nuclear Energy

• Canada's global leadership in non-emitting nuclear energy is a key component of the global industrial transition. With its world-class nuclear facilities and expertise, like CANDU technology, Canada is at the forefront of deploying innovative solutions such as small modular reactors, which have the potential to provide scalable, safe, and reliable zero-emission energy to complement larger energy projects. Investments in nuclear energy not only support Canada's ambitious climate goals, including achieving net-zero emissions by 2050, but also position the country as a global hub for research, development, and the export of nuclear technology. These efforts strengthen Canada's economy, create high-quality jobs, and enhance energy security at home and abroad.
• With the world's largest deposits of high-grade uranium, Canada is a world-leading producer of this important element for nuclear fuel. While much of it is used in Canada for domestic nuclear energy, 85 per cent of it is exported to like-minded countries, including the United States.
• In addition to certain major economic investment tax credits supporting investments in the nuclear sector, the government has committed up to $3 billion in export financing to Romania for two new CANDU reactors and provided $50 million for Bruce Power's nuclear expansion. The Canada Infrastructure Bank is investing $970 million in Ontario Power Generation's small modular reactor project at Darlington.

Strengthening Canada's AI Advantage

• Since 2016, the federal government has announced over $4.4 billion to support artificial intelligence (AI) and digital research infrastructure, including $2.4 billion announced in Budget 2024 to scale-up AI compute infrastructure, for AI adoption programs, and to launch an AI Safety Institute. This builds on Budget 2024's investment of nearly $5 billion in Canadian brainpower—research grants, scholarships, student grants and loans, and world-leading research infrastructure—as well as federal investments in scientific discovery and research talent since 2016 of more than $16 billion.

Making Early Learning and Child Care More Affordable

• Since 2021, the federal government has committed more than $34.2 billion over five years starting in 2021-22, and $9.2 billion ongoing for affordable child care. As of April 2024, eight provinces and territories are now providing regulated early learning and child care for an average of $10 a-day or less, with all other provinces having already reduced fees by 50 per cent.
• The labour force participation rate for women in their prime working years is at 84.9 per cent as of October of this year, and almost one percentage point higher than in 2019. This is a driver of economic growth.

Delivering Canada's Housing Plan

• In April 2024, the federal government released its ambitious housing plan, supported by billions in new investments from Budget 2024. The plan centres around three pillars: building more homes, making it easier to own or rent a home, and helping Canadians who can't afford a home.
• This plan aims to build nearly 4 million homes, including through:

  • Cutting municipal red tape through the Housing Accelerator Fund, which removes barriers to building and is fast-tracking over 750,000 homes over the next decade.
  • Making the math work for homebuilders, by removing the GST on new purpose-built rental housing projects, providing $55 billion in low-cost financing, and more.
  • Using innovative construction practices to build homes faster and smarter, supported by investments in Canada's Regional Development Agencies to scale up these technologies.
  • Growing the homebuilding workforce by creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers.

Investments in Public Transit

• Since 2015, the government has committed $30 billion in support of more than 2,000 public transit projects across Canada—from new subway lines in Canada's biggest cities to transit services in rural and remote communities. This includes investments in the Millennium Broadway Subway Extension in Vancouver, the Finch West light rail line project in Toronto, buses and charging stations to serve the Gaspésie-Îles-de-la-Madeleine and the Métis-sur-Mer communities in Québec, as well as public transportation investments to serve the people living in Edmundston, Madawaska Maliseet First Nation and Haut-Madawaska in northwestern New Brunswick. 
• In 2024, the government announced the new Canada Public Transit Fund to help communities deliver better public transit systems. The fund will provide $3 billion per year beginning in 2026-27, for predictable, baseline funding for communities with existing transit systems; targeted funding to meet local needs, including for rural transit and active transportation; and investments to support the planning and construction of a broad range of public transit infrastructure projects in large urban areas, such as the 55 new subway cars for the TTC's Line 2, announced on November 29, 2024.

Unlocking Pension Investment in Canada

• To help spur greater investment in Canada, the government announced in Budget 2024 that Stephen Poloz, former governor of the Bank of Canada, would explore ways to facilitate domestic investment opportunities for Canadian pension funds, including in the priority areas of infrastructure, AI, and venture capital investments. Since then, the former governor has consulted and engaged with a wide range of stakeholders to hear views on the priority investment areas identified, perceived barriers to investments in Canada, and potential actions the government could take. This Fall Economic Statement announces the results of that work.

Cutting Red Tape

• In 2022, the government launched the Federal Action Plan to Strengthen Internal Trade, which is guiding work with the provinces and territories to cut red tape. This included a rigorous assessment of remaining federal exceptions in the Canadian Free Trade Agreement and important investments in trade data and research. Budget 2024 took further steps to support red tape reduction by announcing the government's intent to introduce amendments to the Red Tape Reduction Act to broaden the use of regulatory sandboxes across government.
• The government will advance its progress on cutting red tape including with a new proposed Red Tape Reduction Office to accelerate the removal of red tape from the regulatory system, including from existing regulations, and with strengthened accountability and oversight, and better engagement with Canadians and Canadian businesses.
• The Ministerial Working Group on Regulatory Efficiency has advanced a comprehensive action plan and Cabinet Directive that sets out firm service standards and strict timelines to get projects through their federal approval processes faster, via the Privy Council Office's Clean Growth Office, and make Canada an energy superpower. Implementation includes offering permitting plans and coordination services to the companies and organizations working to build major projects in Canada.

2.1 More Productive and Innovative Jobs

For nearly two years, Canadians' wages have outpaced inflation. The government's economic plan has supported wage growth through investments in productivity and innovation, which have created more jobs that pay higher wages, while also protecting existing jobs. The government will keep investing in clean energy and emerging technologies to attract more capital and help wages keep rising.

In particular, the government is leveraging Canada's competitive advantages in sectors like artificial intelligence, emerging technology, power generation, and critical minerals. We're doing this to seize the potential of Canada's highly skilled workforce—the most educated workforce in the world—and deliver more good-paying jobs for Canadian workers.

Building on the strategic investments announced in Budget 2024, the government is working to ensure that Canada reaps the benefits of artificial intelligence and is boosting support for scientific research and experimental development to help more small- and medium-sized Canadian businesses invest in R&D. This is part of the government's economic plan to build a more innovative economy, with fewer barriers to investment and more opportunities for workers to get good, well-paying jobs.

Securing Canada's AI Advantage

The federal government is strengthening Canada's thriving artificial intelligence (AI) ecosystem and securing Canada's position as a global AI leader.

Already this year, in Budget 2024, the government announced $2.4 billion in AI support, including $2 billion to build and provide access to computing capabilities and technological infrastructure for Canada's world-leading AI researchers, start-ups, and scale-ups.

Following consultations this summer, the 2024 Fall Economic Statement is announcing the Canadian Sovereign AI Compute Strategy, which will provide support to our world-class researchers and innovative AI firms in the coming years. Using funding provided by Budget 2024, this Strategy will provide:

• $300 million over three years, starting in 2025-26, for the AI Compute Access Fund to help reduce the high costs and barriers that Canadian small- and medium-sized businesses face in boosting their compute capacity.
• $700 million over five years, starting in 2024-25, toward Boosting Canadian AI Champions through support for projects that will grow our Canadian AI ecosystem and create anchor firms. Funding will be available through a competitive call for proposals under Innovation, Science and Economic Development Canada's Strategic Innovation Fund.
• Up to $200 million over two years, starting in 2025-26, for targeted investments to augment existing compute infrastructure and capacity in the near-term to meet immediate needs, including:

  • $85 million for the Digital Research Alliance of Canada to add additional compute capacity to its national network;
  • $60 million for the AI institutes—Mila, Vector, Amii—to provide compute capacity to their researchers and clients; and,
  • $30 million for the Vital real-time health computing infrastructure for Trials, Artificial Intelligence, and a Learning Health System (VITAL) to pilot a secure digital AI infrastructure to leverage Canadian health data.
• $800 million over four years, starting in 2025-26, towards a transformational investment in large-scale public compute infrastructure. 

The Strategy's first investment of up to $240 million for Toronto-based Cohere was announced on December 6, 2024, to secure private capital and incentivize its strategic partners to build a new cutting-edge, multi-billion-dollar AI data centre in Canada that will come online in 2025.

Canada's early investments in a Pan-Canadian AI Strategy have resulted in a strong ecosystem of AI researchers and experts poised to drive global innovation and unlock commercial opportunities.  To further secure the Canadian AI advantage and strengthen the existing Pan-Canadian AI Strategy Commercialization Pillar: 

• The 2024 Fall Economic Statement proposes to provide $150 million over three years, starting in 2024-25, for the Global Innovation Clusters and $24 million over two years, starting in 2025-26, for the National AI Institutes to support the continuation of their AI commercialization activities.

Efforts are well underway to ensure Canadian businesses are best placed among their global peers to seize the transformative opportunities of AI. Officially launched in October 2024, small- and medium-sized businesses now have access to AI adoption funding through:

• The National Research Council's Industrial Research Assistance Program's AI Assist stream helps businesses navigate the challenges of developing and adapting generative AI and deep learning solutions. The program also provides information, planning and execution assistance to develop these technologies safely and ethically.
• Canada's Regional Development Agencies' Regional AI initiative helps bring new AI technologies to market and speed up AI adoption in sectors across the country.

The newly established Canadian AI Safety Institute will also enhance the responsible and safe adoption and deployment of AI, helping businesses and researchers to harness the power of AI with the assurance that the technology is safe and benefits Canadians.

Beyond these soon-to-be or already available initiatives for businesses, the government is seizing Canada's potential as a leading AI data centre hub. With abundant clean electricity, cold winters conducive to cost effective server cooling, robust fibre optic networks, and world-leading data privacy protections, Canada has the required components to build global AI data centres.

Leveraging AI to Boost Public Service Productivity

Governments and major organizations around the world are harnessing the potential of artificial intelligence (AI) to improve service standards, create efficiencies, and reduce costs. To improve the efficiency and quality of program and service delivery for Canadians, and reduce the costs of running government, Canada's public service needs a transformative strategy to leverage new technologies like AI.

Informed by consultations launched by the President of the Treasury Board on September 16, 2024, Canada's first AI strategy for the federal public service will ultimately guide responsible AI adoption throughout the federal public service.

The government is already using AI solutions, in a responsible way, to enhance productivity, improve service delivery, and create new efficiencies. This includes:

• In March 2024, the Canada Revenue Agency launched an alternative method for taxpayers to gain secure access to their accounts using their smartphone, government-issued identification and facial recognition technology. Citizens no longer need to wait for a security code to be delivered by mail, and can securely access their files right away. Since its launch, more than 1 million taxpayers have successfully used the service.
• Employment and Social Development Canada is using machine learning algorithms to improve the service delivery of the Employment Insurance (EI) Program. For example, automation has reduced the manual intervention required on EI claims whenever a client provides new information or has a change in their circumstances, improving the accuracy of EI benefit calculations.
• Agriculture and Agri-Food Canada is using a generative AI chatbot, AgPal Chat, to provide tailored information to farmers and agribusinesses on the more than 400 agriculture and agri-food programs and services available to them.
• Housing, Infrastructure and Communities Canada (HICC) delivers programming to Canadians to improve housing outcomes and support public infrastructure. Through the use of machine learning forecasting, HICC has streamlined the process for delivering these transfer payments, with efficiencies of over 20 hours saved monthly.
• Public Services and Procurement Canada has developed an AI-based Virtual Assistant tool to support compensation advisors and improve case processing at the Public Service Pay Centre. Preliminary findings indicate that the tool has the potential to increase the productivity of a compensation advisor by at least 30 per cent.

AI has also broken down language barriers and made writing and translating more accessible. Thanks to its strong AI sector and language industry, with thousands of well-paying jobs, Canada has the technological and linguistic expertise to develop a sovereign language AI ecosystem. The federal government is a key funder of AI research and buyer of linguistic services, positioning it well to support this progress and benefit from technological advances.

Large language AI models and machine translation will fundamentally change the way we work, but Canadians need language AI that relies on, and generates, Canadian content. Already, AI is helping our bilingual nation translate:

• Canada's centre of linguistic expertise, the Translation Bureau, holds an extensive repository of bilingual texts that is invaluable for training AI models to understand and generate accurate translations and language processing. The Translation Bureau is leveraging its linguistic, technical, and innovative expertise to implement the most effective technologies for translation and interpretation.
• Going forward, established and effective practices will be used to deploy AI beyond official languages, including translating documents into Indigenous languages.

There are significant opportunities to leverage AI and support a strong Canadian AI sector. The government will further drive efficiencies that improve the quality of service and program delivery with AI, wherever practical.

Further details on a strategy to leverage AI to make the public service more efficient are in Chapter 3.

Boosting Scientific Research and Experimental Development

The Scientific Research and Experimental Development (SR&ED) tax incentives are a cornerstone of Canada's innovation strategy. The program currently supports the research and development activities of over 22,000 businesses operating in Canada. About 75 per cent of SR&ED credits are claimed by Canadian-controlled businesses. Making this support more generous, and targeting it to high-growth potential firms, would further encourage Canadian businesses to invest in innovation and drive economic growth.

Informed by consultations earlier this year on how to best deliver new funding:

• The 2024 Fall Economic Statement proposes several new enhancements to the SR&ED program, effective for taxation years that begin on or after the date of this Fall Economic Statement: 

  • Increasing the annual expenditure limit on which Canadian-controlled private corporations are entitled to earn an enhanced 35 per cent investment tax credit, from $3 million to $4.5 million;
  • Increasing the prior-year taxable capital phase-out thresholds for the enhanced credit from $10 million and $50 million to $15 million and $75 million, respectively; and,
  • Extending the enhanced refundable SR&ED credit to Canadian public corporations.

Cutting-edge technologies are a key driver of growth for businesses. Incentives to implement technology make Canada a more attractive place to invest. Businesses need more capital to boost productivity and compete in the economy of tomorrow, capital which Canada is providing. By helping businesses purchase and implement productivity-enhancing technology, such as IT systems capable of running machine learning for eligible SR&ED projects, we can help businesses improve their bottom lines.

• To help businesses increase their investment in productivity-enhancing assets, the 2024 Fall Economic Statement proposes to restore the eligibility of capital expenditures for both the deduction against income and the investment tax credit components of the SR&ED program, effective for property acquired on or after the date of this Fall Economic Statement.

These proposed changes represent the first of further reforms related to the SR&ED program and promoting innovation that the government intends to advance. More details on program administration and updates to qualified expenses will be announced in Budget 2025.

These proposed changes will provide support to innovative businesses estimated at $1.9 billion over six years, starting in 2024-25, with $370 million per year ongoing. Of this, $750 million over five years, starting in 2025-26, with $150 million per year ongoing, would be sourced from existing Budget 2024 funding.

• To encourage the development and retention of intellectual property in Canada, the 2024 Fall Economic Statement also announces the government's intent to implement a patent box regime. The government is reviewing feedback from consultations held earlier this year and will announce details of the patent box regime in Budget 2025.

Accelerating Digital Adoption for Small Businesses

Digitalization is profoundly changing how businesses operate and compete in today's global economy. New advanced digital technologies—such as artificial intelligence (AI)—are improving businesses' production processes, interactions with customers and suppliers, and organizational efficiencies. The more that Canadian businesses adopt new technologies, the more they can meet changing customer needs, stay competitive, and drive economic growth. 

• The 2024 Fall Economic Statement proposes to provide up to $500 million over four years, starting in 2025-26, on a cash basis, to the Business Development Bank of Canada to provide financing and expertise to help small- and medium-sized businesses adopt digital technologies, with a priority focus on AI.

Delivering the Major Economic Investment Tax Credits

To seize the investment opportunities of the global clean economy, the government has now delivered four of its six major economic investment tax credits. These include the: 

• Carbon Capture, Utilization, and Storage investment tax credit, available as of January 1, 2022; 
• Clean Technology investment tax credit, available as of March 28, 2023;
• Clean Hydrogen investment tax credit, available as of March 28, 2023; and,
• Clean Technology Manufacturing investment tax credit, available as of January 1, 2024.

With these investment tax credits now set out in law, businesses can move forward with the certainty they need to make final investment decisions to invest and build in Canada.

Guidance and supporting information on how to apply for respective refundable investment tax credits is currently available on the federal government's website. This includes information on associated labour requirements to pay prevailing union wages and create apprenticeship opportunities, which must be met to receive the maximum tax credit rate for the first three investment tax credits listed above, and would also be required for the Clean Electricity investment tax credit.

Over the summer, the government undertook consultations with provinces and territories on the proposed conditions for accessing the Clean Electricity investment tax credit, and released draft legislation for:

• The Clean Electricity investment tax credit;
• Expanding eligibility of the Clean Technology investment tax credit to include generating heat or electricity from waste biomass; and,
• Expanding eligibility for the Clean Technology Manufacturing investment tax credit to include polymetallic mining.

The government will soon introduce legislation to deliver the Clean Electricity investment tax credit and expand the Clean Technology investment tax credit. It will also soon publish draft legislation for the EV Supply Chain investment tax credit. While legislation progresses, investors already have the certainty of retroactive eligibility:

• The Clean Electricity investment tax credit would be available as of April 16, 2024, for projects that did not begin construction before March 28, 2023;
• Expanded eligibility for the Clean Technology investment tax credit to support using waste biomass to generate heat and electricity would be available as of November 21, 2023;
• The already available Clean Technology Manufacturing investment tax credit would be enhanced to include certain polymetallic mining projects; and,
• The proposed EV Supply Chain investment tax credit would be available as of January 1, 2024.

The success of the major economic investment tax credits in accelerating the flow of capital into Canada is clear, with businesses announcing major new projects across the country. These projects are creating good-paying jobs and growing the economy, while reducing emissions to enable Canada to achieve net-zero by 2050.

Already, the major economic investment tax credits are working to crowd in private capital and getting new major projects started, to create jobs and grow the economy. Announced major projects that could benefit from the major economic investment tax credits include:

• Everwind Point Tupper Green Hydrogen and Ammonia Project: ammonia produced from hydrogen using electrolysis and renewable electricity ($3.4 billion in total estimated investment for Phase I; Nova Scotia).
• Hydro-Québec Chamouchouane wind energy project: 3000 megawatts wind energy project in Chamouchouane in Saguenay–Lac-Saint-Jean region($9 billion in total estimated investment; Quebec).
• Honda Canada EV investments: comprehensive EV supply chain, including an EV assembly plant, EV battery manufacturing plant, a cathode active material and precursor processing plant, and a separator plant ($15 billion in total estimated investment; Ontario).
• Oneida Energy Storage Project: 250 megawatts battery storage in Jarvis ($800 million in total estimated investment; Ontario).
• Skyview 2 Battery Energy Storage Project: 390 megawatts of battery energy storage in the Township of Edwardsburgh Cardinal ($750 million in total estimated investment; Ontario).
• Iyuhána Solar Energy Facility: a 100-megawatt solar energy facility near Estevan ($200 million in total estimated investment; Saskatchewan).
• Dow Fort Saskatchewan Path2Zero: expansion and retrofit of the Dow Fort Saskatchewan facility as a net-zero emissions ethylene cracker and derivatives site with hydrogen production and carbon capture, utilization, and storage ($11.5 billion in total estimated investment; Alberta).
• Air Products Net-Zero Hydrogen Energy Complex: greenfield hydrogen production with carbon capture, utilization, and storage ($1.6 billion in total estimated investment; Alberta).

Getting Major Projects Done, Faster

Accelerating economic growth, increasing power generation, and making supply chains more secure for ourselves and our allies requires a more efficient regulatory framework for major projects—one that delivers faster, more efficient project approvals, strengthens investor confidence, and ensures major projects move forward predictably. Reforms are needed to meet the urgency of securing supply chains and our growing economy's need for more power. That is why the government is building a regulatory framework that yields timely and predictable decisions, aligns economic and environmental priorities, and meaningfully engages with Indigenous communities.

The government has already taken important steps in this direction by:

• Amending the Impact Assessment Act to respond to the October 2023 Supreme Court of Canada decision.
• Setting new targets of five years to complete federal impact assessment and permitting processes, and two years or less for permitting of non-designated projects.
• Releasing a comprehensive action plan to modernize and expedite federal regulatory and permitting processes.
• Issuing a Cabinet Directive, that will help get clean growth projects built faster by driving public service culture change and removing duplication and red tape.
• Launching a Federal Permitting Coordinator in the Privy Council Office's Clean Growth Office to oversee permitting activities, reduce duplication, and provide project proponents with greater support to navigate federal processes.

• Building on these efforts, the 2024 Fall Economic Statement announces the government's intent to:

  • Amend the Physical Activities Regulations (the Project List – which sets out the types of projects that are subject to the Impact Assessment Act) to advance the principle of "one project, one review" by:
    • Including only physical activities (classes of projects that are subject to a federal impact assessment) that carry high potential for impacts in areas of federal jurisdiction, consistent with the revised Act. 
    • Removing some physical activities so as to rely to a greater degree on federal lifecycle regulators, such as solely having the Canadian Nuclear Safety Commission's process apply to certain brownfield nuclear projects, as opposed to also requiring a federal impact assessment.
  • Focus the scope of impact assessments of provincially regulated projects, like mines, exclusively on effects in federal areas of jurisdiction. This will expedite assessments and reduce duplication with provincial and territorial assessments, thereby improving investor certainty and review timelines.
  • As announced in Budget 2024, following consultation with Indigenous Peoples, establish a Crown Consultation coordinator to ensure meaningful Crown consultation with First Nations, Métis, and Inuit communities on the issuance of federal authorizations, to improve efficiency and reduce consultation fatigue.

Canada's Energy Superpower Office

The Clean Growth Office (CGO) oversees and supports the government's plan to modernize federal regulatory and permitting processes to get major projects built faster. 

The CGO works with industry, other orders of government and Indigenous partners on projects and brings together departments to accelerate decision-making and create efficiencies.  It does this by:

• Supporting system-wide coordination to advance major clean growth projects
• Advocating for clean growth projects and reducing barriers for investment
• Tracking projects to ensure timely decision-making across departments and agencies
• Being an open door for project proponents, provinces and territories, Indigenous partners and other organizations.

The CGO works across clean growth sectors including:

• Power and electricity — building up energy sources and transmission capacity
• Critical minerals — inputs for the clean technologies of the future
• Decarbonizing industry and materials — through electrification, carbon capture and greener inputs
• Enabling infrastructure — the ports, roads and transportation needed to unlock growth
• Clean fuels — supporting the transition to cleaner fuels with significant export and domestic use potential

Since its launch the Clean Growth Office has met with hundreds of project proponents and partners looking to invest and advance projects in Canada.

Clean Electricity Investment Tax Credit for Provincial and Territorial Crown Corporations

The federal government is making historic investments in clean electricity, including through the $35 billion Clean Electricity investment tax credit, which provincial and territorial Crown corporations will be able to leverage. Budget 2024 proposed that a provincial or territorial government would need to satisfy certain conditions for any provincial or territorial Crown corporation to claim the Clean Electricity investment tax credit. Following Budget 2024, the government undertook consultations with provinces and territories on the details of these proposed conditions.

Based on these consultations, the 2024 Fall Economic Statement announces the final conditions.

• The 2024 Fall Economic Statement announces that for provincial and territorial Crown corporations to access to the Clean Electricity investment tax credit within a jurisdiction, the government of that province or territory would need to:

  • Publicly commit to publish an energy roadmap to achieve net-zero emissions by 2050, inclusive of all energy sources, by the end of 2026; and,
  • Publicly request that provincial and territorial Crown corporations pass on the benefits of the Clean Electricity investment tax credit to electricity ratepayers in their province or territory.

If a provincial or territorial government satisfies all the conditions by June 30, 2025, then provincial or territorial Crown corporations investing in that jurisdiction would be able to access the Clean Electricity investment tax credit for clean electricity property that is acquired and becomes available for use on or after the day of Budget 2024 for projects that did not begin construction before March 28, 2023.

Provincial and territorial Crown corporations claiming the Clean Electricity investment tax credit would need to publicly report certain information on an annual basis, including an explanation of how the tax credit is being used to benefit ratepayers in their respective jurisdictions. Further details are included in Tax Measures: Supplementary Information.

By applying conditions to the $35 billion Clean Electricity investment tax credit, which provincial and territorial Crown corporations will significantly benefit from, the federal government is ensuring that public dollars are used to the benefit of the ratepayers and the environment, and that our growing country has the power it needs.

Implementing the EV Supply Chain Investment Tax Credit

The global automotive industry is transforming its production lines and supply chains to produce more electric vehicles (EVs). Canada is seizing the opportunities of the EV transformation and has already secured investments from major global automakers.

Businesses can already claim the Clean Technology Manufacturing investment tax credit to cover 30 per cent of the cost of their investments in eligible new machinery and equipment used to manufacture EVs, EV batteries, and certain EV battery components.

To further incentivize growth in Canadian EV supply chains, in Budget 2024, the government announced its intent to introduce a new EV Supply Chain investment tax credit. This tax credit would cover 10 per cent of the cost of the buildings needed to manufacture key components across the EV supply chain.

• The 2024 Fall Economic Statement announces the design and implementation details of the EV Supply Chain investment tax credit:

  • A 10 per cent refundable tax credit rate for eligible building property related to three segments of the EV supply chain: EV assembly, EV battery production, and cathode active material production.
  • The credit would be available to Canadian taxable corporations.
  • To be eligible for the credit, a corporation (or a group of related corporations) would have to either:
    • Acquire at least $100 million in property eligible for the Clean Technology Manufacturing investment tax credit in each of the three segments, or,
    • Acquire at least $100 million in property eligible for the Clean Technology Manufacturing investment tax credit in two of the three segments and hold a qualifying minority interest in another corporation that acquires at least $100 million in property eligible for the Clean Technology Manufacturing investment tax credit in the remaining segment.
  • For a corporation to hold a qualifying minority interest in another corporation, it would have to own shares entitling it to at least 10 per cent of the voting rights and 10 per cent of the value of the shares of that corporation.
  • The credit would apply to eligible building property that is acquired and becomes available for use on or after January 1, 2024. The credit rate would be reduced to 5 per cent for 2033 and 2034, and the credit would no longer be in effect after 2034.

Making Clean Hydrogen through Methane Pyrolysis

Methane pyrolysis is an innovative process that splits methane molecules into hydrogen and carbon in its solid form. This rapidly advancing technology has the potential to be a more sustainable method of hydrogen production, given its energy efficiency and low emissions.

By making methane pyrolysis eligible for the Clean Hydrogen investment tax credit, which covers between 15 per cent and 40 per cent of the cost of purchasing and installing eligible equipment used in clean hydrogen production, Canada could become a leader in this technology.

• The 2024 Fall Economic Statement proposes that the Clean Hydrogen investment tax credit be expanded to include hydrogen produced from methane pyrolysis, a nascent but promising new method, as an eligible production pathway. Expanding the Clean Hydrogen investment tax credit to include methane pyrolysis is expected to cost $43.5 million over five years, starting in 2025-26.

Investing in Canadian Biofuels

Biofuels are renewable energy sources derived sustainably from plants and other organic materials, such as canola, discarded wood, and waste from landfills. Biofuels are a win-win: they produce energy with less pollution than fossil fuels and they represent a valuable economic opportunity for Canada. Biofuels will create good jobs in agriculture and forestry while aiding the decarbonization of critical sectors like marine, aviation, rail, and heavy industry. Since 2022, Canada's Clean Fuel Regulations have been supporting the production and adoption of biofuels across the country.

Budget 2024 announced the government's intention to disburse up to $500 million per year from the Clean Fuel Regulations proceeds fund in support of biofuels production, subject to sufficient contributions from regulated parties. This initiative aims to meet the rising demand for cleaner fuels and grow Canada's biofuels industry. The government will be ready to deliver on this commitment as the stringency of the Clean Fuel Regulations increases and contributions from regulated parties accelerate. Funding will notably support biofuel production costs via non-repayable contributions.

The government is also aware of the emerging competitiveness challenges facing the sector from production incentives available to US producers. Budget 2024 announced plans to retool and extend the Clean Fuels Fund to provide capital support for new production of biofuels in Canada. Natural Resources Canada will communicate final program criteria shortly and initiate a new call for proposals in early 2025. The updated program will facilitate continued investment and growth in the domestic clean fuels sector.

Converting Belledune Generating Station to Biomass Energy

Clean, affordable and reliable electricity is the foundation of a strong, growing economy that provides good, middle-class jobs to Canadians. Recognizing this, Budget 2023 provided $2.9 billion for the Smart Renewables and Electrification Pathways program, which supports the deployment of clean electricity projects that cut Canadians' energy bills, reduce pollution, enhance grid capacity, integrate renewable energy, and advance electrification across the country.

The Belledune Generating Station in New Brunswick serves as a vital baseload facility for the province's electricity grid, especially during high-demand winter months. Converting the plant from coal to wood pellet fuel would reduce its environmental impact and also extend operational lifespan, ensuring reliable energy for years to come.

• The 2024 Fall Economic Statement announces the government's intent to work with the Government of New Brunswick and NB Power to support the proposed project to convert the Belledune Generating Station from coal-fuelled to biomass, by committing to provide meaningful support from Natural Resources Canada's Smart Renewables and Electrification Pathways program.

2.2 Helping Businesses Grow and Compete

Canada today is one of the world's best places to put capital to work and grow a business. In the face of uncertainty in North American and global economies following the U.S. election, the government is focused on ensuring Canada remains a top, stable destination for investors to put their capital to work.

This April, the Economist Intelligence Unit found that Canada will be the third best country in the G20 for doing business throughout the next five years (2024-2028), and that Canada has consistently ranked among the top ten best countries to do business for the last five years. With Canada attracting capital at record pace, the economy is primed to keep growing and creating good jobs in the years ahead.

But we need to do even more to help Canadian businesses, particularly start-ups and innovative small- and medium-sized businesses, scale up. Central to this is attracting more private investment, from within Canada and from abroad.

For Canada to accelerate growth momentum, public and private capital need to work together, fostering economic growth that creates jobs across the country. The government is providing capital, encouraging private sector investment, and reducing red tape so that Canada's economy and small- and medium-sized businesses can continue to access the capital they need, grow, and generate good-paying jobs for Canadians. The Business Development Bank of Canada (BDC) is one such federal institution that supports growing businesses, and it is delivering the intended results: businesses that receive BDC funding are growing 9 per cent faster than other businesses.

We are building on programs that are working, like the Canada Growth Fund, reforming programs that could do more, such as federal financial Crown corporations, and renewing programs that have secured Canada's business tax competitiveness in North America—all to keep Canada attracting the most foreign direct investment in the world, on a per capita basis. Ensuring Canada keeps attracting capital is essential to growth and prosperity.

An Invest in Canada Summit

Canada is open for business. We are among the world's most stable economies. In the face of continental and global economic uncertainty, Canada provides much needed certainty for investors.

As we deliver our high-value investments in economic growth and productivity, it is critical that we strengthen partnerships with the private sector—in Canada and abroad. Greater public-private partnerships can secure a further crowding in of private capital into Canada. More private capital means more growing businesses, more jobs, more opportunity, and more good paycheques for Canadians.

• The 2024 Fall Economic Statement announces the government will host an Invest in Canada Summit in spring 2025. The summit will be chaired by the Deputy Prime Minister and Minister of Finance, who will further her work to strengthen partnerships with international and domestic investors. The summit will showcase Canada's competitive advantages, strong economic fundamentals, and investment incentives, which have already delivered strong returns for investors in an increasingly fragmented global economy.

By bringing together global investors, the summit will be an opportunity to attract new job-creating investment, backed by Canada's favourable business landscape and appealing investment climate.

Extending the Accelerated Investment Incentive

The government is committed to ensuring that Canada's corporate tax system is competitive so that businesses seeking to expand and grow can confidently choose to invest in Canada. To ensure Canada remains a competitive place to do business, the 2024 Fall Economic Statement proposes to:

• Fully reinstate the Accelerated Investment Incentive, as well as immediate expensing for manufacturing or processing machinery and equipment, clean energy generation and energy conservation equipment and zero-emission vehicles. These incentives would apply to qualifying property acquired on or after January 1, 2025 and that becomes available for use before 2030. The full re-instatement of these measures would be followed by a four-year phase-out between 2030 and 2033.

Temporary accelerated depreciation measures are an effective way of promoting business investment. The government is taking steps now to support Canada's competitiveness, while closely monitoring developments on tax reform in the United States.

It is estimated that extending these measures would cost $17.4 billion from 2024-25 to 2029-30.

Unlocking Pension Investment in Canada

With over $3 trillion in assets, Canadian pension funds are renowned around the world for being well-funded and well-managed, ensuring their long-term ability to provide financial security and dignity to retirees across Canada.

By creating a more attractive investment environment for pension funds, we can grow our economy and boost productivity, while strengthening the robust retirement incomes for Canadians.

In Budget 2024, the government announced that Stephen Poloz, former governor of the Bank of Canada, would explore how to catalyze greater domestic investment opportunities for Canadian pension funds. Since then, the former governor has actively consulted and engaged with pension funds, equity investors, academics, unions, and industry representatives on ways to facilitate domestic pension investment. In connection with that work, the government is moving forward with a suite of measures to facilitate increased pension fund investment in Canada.

• The 2024 Fall Economic Statement announces the federal government's intent to amend regulations to remove the 30 per cent rule for investments in Canadian entities. This will make it easier for Canadian pension funds to make significant investments in Canadian entities. During the development of regulatory amendments, the federal government will consult with provinces on the treatment of provincially-regulated pension plans.
• The 2024 Fall Economic Statement also announces that the government is exploring lowering the 90 per cent threshold that currently limits municipal-owned utility corporations from attracting more than 10 per cent private sector ownership. Lowering this threshold for Canadian pension funds would allow them to acquire a higher ownership share in these entities. For example, municipally-owned electricity utilities would be able to access more capital to meet future demand and expand electricity production and distribution grids.
• The 2024 Fall Economic Statement also announces that the government is currently consulting on proposed regulations to increase public transparency of pension investments for large federally regulated plans. This would require the Office of the Superintendent of Financial Institutions to publish the distribution of investments, by jurisdiction and asset class within each jurisdiction, of federally regulated pension plans with assets under management greater than $500 million.
• The 2024 Fall Economic Statement also announces that the largest public sector pension funds in Canada are working to adopt similar disclosures.

Attracting Investment for Better Airports

Budget 2024 announced that the government will issue a policy statement clarifying the existing flexibilities under Canada's National Airports System to help airports to attract capital, including from Canadian pension funds. The government will release the statement soon to highlight the wide-ranging tools available to airports to partner with private investors.

• To help airports attract the investment needed for improvements, the 2024 Fall Economic Statement announces the government's intent to engage airports and pension funds on potential measures that would further incentivize investment and development on airport lands. This includes exploring potential changes to airport authority ground leases.

Attracting Investment in High-Growth Companies

Entrepreneurs, start-ups, and established high-potential firms need capital to scale up, expand, and grow their businesses. Canada's venture capital (VC) sector provides equity financing for start-up, high-growth potential companies to help entrepreneurs turn their innovative ideas into successful products and services.

A strong and dynamic domestic VC industry fosters an environment conducive to nurturing Canada's most innovative businesses. To this end, the government has made significant investments in Canada's VC sector since 2016, investing over $1 billion in several rounds of the Venture Capital Catalyst Initiative, in addition to the Business Development Bank of Canada's role as one of Canada's largest VC investors. Pension funds have increasingly looked to expand their portfolios through strategic VC and high-growth investments, but often face challenges in terms of scale and transaction sizes.

• The 2024 Fall Economic Statement proposes to launch the fourth round of the Venture Capital Catalyst Initiative with $1 billion in funding in 2025-26, on a cash basis. To leverage more private venture capital, this round will include more enticing terms for pension funds and other institutional investors.
• To bolster access for mid-cap companies to the capital needed for long-term growth, the 2024 Fall Economic Statement proposes to provide up to an aggregate of $1 billion, on a cash basis, to invest in mid-cap growth companies. These investments will be made by a qualified fund manager with a proven and demonstrable track record of supporting capital to Canadian mid-cap growth companies. The government's investment will be structured to be concessional and equal to 25 per cent of net new private investments in order to crowd in additional private capital into the growth equity market.

The government invites qualified fund managers, including Canadian pension funds, to respond to the forthcoming Call for Expressions of Interest to become selected managers. Selected fund managers will be expected to join as significant co-investors, with their own capital.

Catalyzing AI Infrastructure

By 2030, 70 per cent of global demand for data centre infrastructure is expected to be for advanced AI workloads. Moreover, generative AI, the fastest-growing AI compute workload, is expected to make up 40 per cent of demand. Beyond Canada's position as the global leader for the responsible use of AI, we have an abundance of clean, reliable energy and a cold, northern climate that is uniquely well suited to house AI data centres.

Leveraging the $3 trillion in capital held by Canadian pension funds would accelerate the development of large-scale AI compute data centres in Canada and has potential to generate significant returns for pension beneficiaries, while also securing Canada's AI advantage and creating good-paying jobs.

• The 2024 Fall Economic Statement announces that the government is developing a program that would provide up to $15 billion in aggregate loan and equity investments for AI data centre projects that receive investment from one or more Canadian pension funds. To access these loans or project equity, Canadian pension funds must invest at a ratio of 2:1 of their own capital, via debt or equity, and become significant shareholders in an AI data centre project. Seven pension funds have expressed interest in working with the government on detailed project parameters. More details will be announced in Budget 2025.
• To secure Canada's competitiveness in this high-growth sector, the 2024 Fall Economic Statement announces that the federal government will expand the mandates of the Cabinet Committee on Canada-U.S. Relations, the Ministerial Working Group on Regulatory Efficiency for Clean Growth Projects, and the Privy Council Office's Clean Growth Office to get AI data centres built faster. As part of this work, the federal government will also engage with provincial and municipal governments, energy utilities, and other stakeholders to remove regulatory barriers beyond federal jurisdiction.

By creating a more attractive investment environment, we are helping to grow our economy and boost innovation, while generating returns that will strengthen the robust retirement incomes of Canadians.

The Canada Growth Fund is Growing Businesses

The $15 billion Canada Growth Fund was launched by the federal government to attract private capital to invest in Canadian projects and businesses to grow the economy and create good middle class jobs across the country. The Canada Growth Fund does this by using investment instruments that absorb risks and encourage private investment in low carbon projects, technologies, businesses, and supply chains.

Since launching in 2023, the Canada Growth Fund has already committed about $3 billion to eight unique investments across five provinces. Among its investments, the Canada Growth Fund is providing debt, equity, and other types of financing to Canadian projects and firms:

• Geothermal Power and Heat: a $90 million investment in a Calgary-based geothermal company, Eavor Technologies, which has developed the world's first scalable closed-loop geothermal technology.
• Climate Impact Funds: two $50 million investments in Montreal-based climate impact funds, Idealist Capital and MKB's Third Energy Transition Fund, which will help businesses commercialize clean technologies to accelerate the net-zero transition.
• Carbon Capture: up to $1 billion for carbon capture and sequestration infrastructure at Strathcona Resources' oil sands facilities across Alberta and Saskatchewan; and, a $200 million direct investment in the Calgary-based Entropy, a world-leading carbon capture and sequestration company.
• CCUS Technology: around $137 million for Burnaby's Svante to make cutting-edge carbon capture filters and machines for heavy-emitting industries, such as cement, steel, hydrogen, and oil and gas.

Carbon Contracts for Difference

In Budget 2024, the government committed to ensuring that the Canada Growth Fund has the resources it needs to fulfill its role as federal issuer of carbon contracts for difference (CCFDs). The government is confident that the Canada Growth Fund is well funded to support major projects of national significance and will continue to stand ready to provide additional capital to the Canada Growth Fund if required.

The Canada Growth Fund has announced three carbon contracts, a tool to accelerate investment in decarbonization and clean growth technologies by providing certainty related to carbon pricing and credits. The Canada Growth Fund has just under $6 billion remaining to issue, on a priority basis, for all forms of carbon contracts. The three announced carbon contracts would significantly reduce emissions:

• A carbon credit offtake agreement with Entropy in December 2023, consisting of an agreement to purchase up to 1 megatonne per year of carbon credits at an initial price of $86.50 per tonne for a term of 15 years.
• A strategic partnership with Varme Energy in June 2024 to accelerate the development of a landfill waste-to-energy facility in Alberta, including upon final investment decision, a carbon credit offtake of up to 200,000 tonnes annually of carbon credits at an initial value of $85 per tonne over 15 years.
• A CCFD with Markham District Energy in June 2024, for the Ontario-based operator of district energy networks to support their investment in a new heat pump system, with the potential to reduce almost 180,000 tonnes of CO2 emissions over the 10-year CCFD term.

Through its carbon contracts strategy, the Canada Growth Fund is providing clean technology innovators and adopters with revenue certainty, absorbing credit market risk, and reducing carbon policy risk for investors in a cost-efficient manner. This certainty in the carbon market is already catalyzing substantial private sector investment and enabling major projects to move forward, bringing clean technologies to market, and creating jobs.

Following its first CCFD with Markham District Energy, the Canada Growth Fund is offering CCFDs using standardized contracts for certain jurisdictions and sectors. On this basis, companies can negotiate contracts with the Canada Growth Fund through a streamlined technical and commercial process, relying on certain standardized contract terms. This strategy equips the Canada Growth Fund to provide more "off-the-shelf" CCFDs to companies, enabling more investments, faster. The Canada Growth Fund stands ready to engage with interested companies on this investment approach.

Markham District Energy's Carbon Contract for Difference

The Canada Growth Fund's agreement with Markham District Energy made great progress towards developing standardized carbon contracts for difference (CCFDs) to promote rapid and efficient deployment and ensure widespread accessibility of CCFDs.

The contract is structured as a two-way contract, meaning that Markham District Energy will make payments to the Canada Growth Fund if the actual carbon policy price in Ontario exceeds the agreed price. The Canada Growth Fund will pay Markham District Energy the difference should the actual policy price be lower.

The benchmark for the contract is based on the Ontario industrial carbon pricing system, known as the Emissions Performance Standards. The contract is set at an initial strike price of $100 per tonne of CO2 with escalation, for a 10-year term commencing at the Project's commercial operation date. CCFDs like this are available to businesses looking to de-risk net-zero investments.

Capital Gains Rollover on Business Investment

To ensure that Canadian small businesses can access the capital that they need to grow, a rollover allow investors to defer the taxation of capital gains on investments. Specifically, eligible small business shares can be rolled over if the proceeds of disposition are reinvested in other eligible small business shares during the year of disposition or within 120 days following that year. This is subject to certain conditions, including that each of the corporations that issued the initial shares and that issued the replacement shares must not have had greater than $50 million in assets immediately before or after the share issuance, and the shares must be common shares.

• The 2024 Fall Economic Statement proposes to amend the Income Tax Act to expand what qualifies as an eligible small business corporation share and to relax certain conditions for the rule to apply. Specifically, it proposes to allow preferred shares to qualify for the rollover, to increase the asset limit of eligible small business corporations that qualify for investment to $100 million, and to increase the length of the period to acquire new investments to within the year of disposition and one full calendar year following the year of disposition.

These changes would apply to qualifying dispositions that occur on or after January 1, 2025. These changes are expected to reduce federal revenues by $5 million over five years starting in 2024-25.

Implementing the Canadian Entrepreneurs' Incentive

To encourage Canadian innovators to turn their ideas into growing businesses that create well-paying jobs, the government announced the creation of the Canadian Entrepreneurs' Incentive in Budget 2024. When it comes time to sell a business, this incentive would reduce the inclusion rate to one-third on capital gains realized on the disposition of eligible business shares, up to a lifetime maximum of $2 million.

Combined with the increased $1.25 million Lifetime Capital Gains Exemption also announced in Budget 2024, the Canadian Entrepreneurs' Incentive, when fully rolled out, would make entrepreneurs better off when selling business shares worth up to $6.25 million.

In August 2024, the government announced reforms to the proposed measure that would further benefit Canadian innovators and small business owners. These changes would:

• Accelerate the rollout of the Canadian Entrepreneurs' Incentive by increasing the phase-in to $400,000 annually, starting in 2025, such that the full $2 million limit will be available by 2029. 
• Enable a greater range of business owners to qualify for the exemption by removing the requirement that an individual be a founding investor and relaxing ownership and engagement requirements.
• Expand the list of eligible sectors by extending the Canadian Entrepreneurs' Incentive to the disposition of all qualified farming and fishing property and including businesses that deliver personal care services.

Tax Relief for Entrepreneurs

An entrepreneur founded a fintech start-up several years ago and accepts an offer to sell their company to a large fintech company. The entrepreneur realizes a $2 million capital gain on this sale.

The entrepreneur has already used the increased lifetime capital gains exemption of $1.25 million when they sold some of their business shares to a business partner.

Before Budget 2024 changes to make capital gains taxation fairer, they would have paid tax on $1 million—or 50 per cent of their $2million in capital gains.

Once the Canadian Entrepreneurs' Incentive is fully implemented by 2029—five years earlier than initially proposed due to the enhancements announced in August 2024—they would only pay tax on one-third of the $2 million—$666,667. This reduces their taxable income in the year of sale by $333,333.

More Local Financing for Small Businesses

Not all entrepreneurs have the same access to the financing they need to grow their business. OECD research shows commercial financing to Canadian companies grew by 165 per cent since 2011, but the percentage of these new loans going to small- and medium-sized businesses decreased from 16 per cent to 8.6 per cent. Canada's small- and medium-sized businesses have fewer and fewer options for the financing they need compared to their peers in other G7 countries.

Entrepreneurs have a range of financing needs to grow their businesses. There isn't a one-size-fits-all solution. The Business Development Bank of Canada (BDC) has spent decades partnering with regionally-focused lenders. Building on this success, on November 21, 2024, BDC launched a new Community Banking Initiative to help up to 80 local lenders offer greater access to financing to 100,000 small business owners in the next decade. The initiative will focus on entrepreneurs with unconventional business models, those in rural or remote areas, with little credit history, and from younger age groups.

Reducing Credit Card Fees for Small Businesses

As promised in the 2022 Fall Economic Statement, the government successfully negotiated and finalized new agreements with Visa and Mastercard to reduce interchange rates paid by small businesses on credit card transactions, while also protecting reward points for Canadian consumers.

The new rates, which came into effect October 19, 2024, will help more than 90 per cent of credit card-accepting businesses in Canada see their interchange rates reduced by up to 27 per cent. These rate reductions will save small businesses about $1 billion over five years, allowing them to reinvest into growing their business and offer more competitive prices for their customers.

We have made significant progress reducing credit card transaction fees for small businesses. However, some small businesses are unable to benefit from savings due to the unreasonably high merchant fees charged by certain payment processors. Specifically, some payment processors are charging flat-fees that do not pass on the savings from our deals to small businesses.

• To ensure small businesses benefit from lower credit card fees, the 2024 Fall Economic Statement announces the government is considering legislative measures to compel payment processors to fully pass credit card transaction fee savings on to small businesses.

More Risk Appetite for Financial Crown Corporations

Canada's financial Crown corporations, the Business Development Bank of Canada (BDC), Export Development Canada (EDC), and Farm Credit Canada (FCC), help businesses leverage new growth opportunities. They underpin a financial ecosystem critical to many businesses. However, financial Crowns could do more to mobilize financing, and take on greater risk to get more support to more Canadian businesses that need it. This year, improvements include:

• Support for Canadian sectors: identifying opportunities for the BDC, EDC, and FCC to better deploy their capital in support of Canadian businesses, exporters, and farmers.
• Capital Management Framework Update: amending the Capital and Dividend Policy Framework for Financial Crown Corporations to support a more efficient capital structure at financial Crown corporations, increase alignment with output-based metrics such as economic growth, ensure they are following best practices of peer organizations in similar international jurisdictions, and introduce a target solvency rating for the amount of capital that should be held.
• Legislative Amendments: amending the Farm Credit Canada Act to require regular legislative reviews to ensure alignment with sector needs.

Over the summer, financial Crown corporations and federal officials developed implementation plans for measures announced in Budget 2024. Progress will be monitored over the coming months through the approval of their upcoming Corporate Plans and reported on in subsequent Annual Reports.

• The 2024 Fall Economic Statement announces the government's intent to introduce legislative amendments to the Farm Credit Canada Act.

Collectively, these improvements will allow for a more efficient use of public capital, ensuring that Canadian businesses, exporters, and farmers have the financing they need to support job creation and economic growth.

Canada Carbon Rebate for Small Businesses

Budget 2024 announced that a portion of the carbon pricing fuel charge proceeds from 2019-20 through 2023-24 will be returned to approximately 600,000 businesses, with 499 or fewer employees through the Canada Carbon Rebate for Small Businesses, an automatic refundable tax credit provided directly by the Canada Revenue Agency. This will deliver over $2.5 billion directly to Canada's small- and medium-sized businesses.

These tax-free rebates started being delivered via direct deposit on November 25, 2024, with cheques already in the mail.

• The 2024 Fall Economic Statement proposes to modify certain design elements of the Canada Carbon Rebate for Small Businesses in respect of the 2024-25 and later fuel charge years to ensure that smaller businesses are receiving the most support by creating a new base payment. 

  • Small businesses that have between 1 and 20 employees would qualify for a payment amount that is equivalent to having 20 employees, effectively providing a base payment.
  • Larger businesses that have over 300 employees would have their payment amounts gradually reduced as their number of employees reaches 500.
  • The rebate would be newly available to cooperative corporations and credit unions.
  • Proceeds will continue to be returned automatically to eligible corporations through direct deposits and cheques from the CRA, separately from CRA tax refunds.

Mandatory Climate-related Financial Disclosures

Canadian businesses, whether they are publicly traded or privately held, are susceptible to the financial risks of climate change. This is why the government recently announced that it is moving forward with mandating climate-related financial disclosures by large, federally incorporated private corporations. These disclosures will help investors better understand how large businesses are thinking about and managing climate risks, securing resiliency in Canada's financial ecosystem, and ensuring capital allocation aligns with our collective goal of reaching net-zero emissions by 2050.

• Building on mandatory climate-related financial disclosures for federally regulated financial institutions and federal Crown corporations, the 2024 Fall Economic Statement announces the government's intent to introduce legislative amendments to the Canada Business Corporations Act to create a regulatory authority to enable climate-related financial disclosure requirements for large, federally incorporated privately held corporations.

The government will launch a regulatory process to determine the substance of these disclosure requirements and the size of private federal corporations that would be subject to them. 

We are ready to work with provincial and territorial partners to ensure broad disclosure coverage across our economy and are seeking to harmonize regulations with those that will be required from publicly traded entities by securities regulators.

The government remains committed to advancing Made-in-Canada sustainable investment guidelines.

Canadians Recoup Investment in Air Canada

When COVID-19 hit, as part of the federal government's emergency supports that protected workers, jobs, and businesses through the pandemic recession, the government established the Large Employer Emergency Financing Facility (LEEFF) program.

In 2020, Air Canada applied to LEEFF for financial support. Based on that application, the Canada Enterprise Emergency Funding Corporation (CEEFC) invested $500 million in Air Canada's equity and provided Air Canada with a loan of up to $1.4 billion so that Air Canada had working capital to issue passenger refunds for certain pandemic-related cancelations. As part of the LEEFF financing package, CEEFC also received 14.6 million equity warrants.

This support enabled refunds for passengers, protected jobs and workers' rights and contributed to the recovery of air services for Canadians.

The government has always stated it does not intend to be a long-term shareholder of Air Canada and that the shares would be divested when appropriate.

CEEFC, which held the government's shares in Air Canada, has now sold all of those shares at prices that realize value for taxpayers—that is, total sale proceeds exceed the initial investment. The proceeds of the sale were $543 million, and the profit from the sale was $43 million.

Combined with the sale of Air Canada warrants in 2022 for $82 million, the total profit for Canadians is $125 million. This is a great return for Canada. Air Canada will repay the outstanding balance of $1.27 billion on its voucher loan by 2028.

2.3 Unlocking Canada's Economic Potential

Canada's economic potential is dependent on the success of workers and working families. That is why the federal government is investing to unlock the full potential of Canadians—the world's most educated, most talented workforce.

We are making major investments that are attracting private capital and creating more good-paying jobs. We are investing in helping Canadians build the skills they need to succeed, cutting the red tape that holds workers back, and strengthening worker protections to make the labour market fairer for working Canadians. And we are helping young Canadians reach their full potential and launch their careers by funding over 130,000 job placements and employment support opportunities every year, through the Youth Employment and Skills Strategy, Canada Summer Jobs, and the Student Work Placement Program.

Canada's economic advantages—supported by over $160 billion of public investment through the government's industrial transition economic plan—are recognized globally. Earlier this year, Canada was recognized by BloombergNEF as having the strongest battery supply chain potential in the world. While representing only 0.5 per cent of the world's population, Canada accounts for 2 per cent of global gross domestic product (GDP) and 2.5 per cent of global exports. Canada is also the only G7 country with comprehensive trade and investment agreements with all other G7 members. From child care, to generous post-secondary student grants and loans, to dental care, and pharmacare, we're also investing in Canadians, and helping them find jobs they can count on.

To advance our progress on the shared path of reconciliation with Indigenous Peoples, the government is creating new tools to unlock the full potential of the Indigenous economy—which has been estimated at being at least $100 billion.

This Fall Economic Statement is strengthening pro-worker policies to level the playing field for workers. This includes ensuring regulatory barriers don't impede Canadians and newcomers from contributing their talent and expertise to our economy where it is needed most. We're also restricting employers from using non-compete agreements, strengthening copyright protections for artists and creators, and more. And to help workers get where they need to go, and buy what they need near home, we're investing to build more transit infrastructure.

More Generous Federal Research Support

The government is backing the groundbreaking researchers who are making cutting-edge discoveries that are essential to building a more prosperous, innovative economy. At our world-leading post-secondary institutions, the students and researchers who conduct this work are now benefitting from more generous federal research grants announced in Budget 2024—a total of $2.6 billion over five years, and $948.1 million ongoing, to the federal granting councils. And federal funding is now equipping students and researchers with cutting-edge facilities.

The government is ensuring the research community is engaged as this new support rolls out. Feedback from this engagement, as shared in the recently published What We Heard report, is informing the final stages of development of the new capstone research funding organization announced in Budget 2024.

Further details will be announced in the coming months.

STEM Opportunities in High School

Shad Canada connects high school students with experiential learning opportunities across science, technology, engineering, and mathematics fields at university campuses across Canada. Through these experiences, high school students gain valuable exposure to potential career fields for them and are introduced to leaders, mentors, and entrepreneurs. Shad encourages students to pursue their passions and discover new ones.

• The 2024 Fall Economic Statement proposes to provide $3 million over five years, starting in 2025-26, and $0.6 million ongoing to Shad Canada to expand their programming and operations, to help more high school students discover their passions for STEM and innovation.

Training for the Next Generation of Innovators

Advanced technology development is highly competitive and lucrative. Success in this endeavor requires exceptional research and development talent. In order to bolster innovation performance, Canada must compete with nations around the world to train the next generation of innovators and drive productivity growth.

• The 2024 Fall Economic Statement proposes to provide $29.2 million over three years, starting in 2025-26, to help Talent for Innovation Canada to launch a pilot initiative to build an exceptional research and development workforce in Canada. This industry-led pilot will focus on attracting, training, and deploying top talent across four key sectors: bio-manufacturing; clean growth; electric vehicle manufacturing; and microelectronics, including semiconductors.

Cutting More Red Tape

Regulations are essential to deliver the health, safety, and environmental protections Canadians expect, but they can accumulate and become outdated over time. In emerging sectors, regulations require modernization to adapt to industry advances. So, the government is reducing the regulatory burden and cutting red tape with regulatory stock and red tape reviews, and with novel approaches to reduce red tape, such as regulatory sandboxes.

• To reduce unnecessary barriers to innovation, productivity, and economic growth, and lower regulatory costs for Canadians and Canadian businesses, the 2024 Fall Economic Statement proposes to provide $27.8 million over five years, starting in 2025-26, for a new Red Tape Reduction Office, sourced from existing resources of the Treasury Board Secretariat. The Red Tape Reduction Office will:

  • Accelerate the cutting of red tape from the regulatory system, including strengthened efforts to address overly burdensome or outdated requirements in existing regulations;
  • Establish measures to track, assess, and communicate results of regulatory action to ensure a stronger, evidence based regulatory framework; and,
  • Improve accountability, oversight, and transparency, including through stronger engagement with Canadians and Canadian businesses and a dedicated channel for feedback on regulatory red tape.

  The Red Tape Reduction Office will prioritize work in key sectors including, but not limited to, telecommunications, transportation, power generation and transmission, innovation, medicine, and health.

• To cut red tape for growing businesses and help them to succeed, the 2024 Fall Economic Statement also announces the government's intent to explore a transition from cannabis excise duty stamps specific to each province and territory to a single, national stamp. This would make it easier for regulated cannabis producers to ignite new business opportunities in other provinces. More details will roll out in Budget 2025.

Reducing Barriers to Trade Within Canada

Improving inter-provincial and -territorial trade in Canada will increase economic growth, strengthen competition, and make life cost less. The federal government is leading a national effort to eliminate domestic trade barriers and improve cooperation and make it easier for businesses to operate and grow across provinces and territories.

Building on the December 2022 launch of the Federal Action Plan to Strengthen Internal Trade, the government is taking meaningful steps to advance internal trade in Canada. This includes:

• Canada's truck transportation sector faces barriers to internal trade, which impact the cost of moving goods and result in higher prices for consumers. A pilot to mutually recognize regulatory requirements in the trucking sector in Ontario, Nova Scotia, Manitoba, Prince Edward Island, Saskatchewan, Alberta, Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut will aim to eliminate the internal trade challenges faced in the trucking transportation sector. Launched at the September 2024 Committee on Internal Trade, this pilot will commit participating jurisdictions to recognize each other's regulatory requirements, even where differences exist, such as oversized vehicle signage requirements, to allow trucks and the goods they carry to move across Canada more effectively, without compromising safety and security measures.
• The first-ever Canadian Survey on Interprovincial Trade, launched in June 2024, is engaging thousands of Canadian businesses on the challenges they face when buying, selling, and investing across provincial and territorial borders. Data is expected to be released in early 2025, and will help inform policy changes to eliminate interprovincial barriers.
• The Canadian Internal Trade Data and Information Hub, launched in April 2024, is a central repository of internal trade and labour mobility data, information, and analysis. It brings together internal trade-related data from across federal, provincial, and territorial governments, along with other sources of information including businesses, think tanks, and academics, that provide additional insights into economic activity across Canada.
• The financial sector plays a key role in economic growth by financing businesses and home ownership, insuring against risks, and processing payments for the millions of financial transactions made every day. The government is working with provinces and territories to incorporate financial services rules into the Canadian Free Trade Agreement to facilitate the free flow of financial services across Canada. The government is also engaging provinces and territories in an ongoing dialogue to coordinate financial sector policy development and promote regulatory cooperation.

These actions will help the government continue to advance progress in reducing internal trade barriers and help Canada's economy grow. According to a study by the International Monetary Fund, Canada could increase its GDP per capita by as much as 4 per cent—or $2,900 per capita estimated in 2023 dollars through liberalization of internal trade in goods.

While the federal government is taking meaningful steps to increase interprovincial trade, many of the toughest barriers remain in place because of inaction by provinces and territories. It's time for the provinces and territories to step up. To incentivize provincial and territorial action to remove barriers to trade within Canada and unlock Canada's full economic potential:

• The 2024 Fall Economic Statement announces the federal government will publish a list of specific, restrictive measures that each province and territory has in place that are preventing trade within Canada.
• The 2024 Fall Economic Statement announces the federal government will consider applying conditions on major federal transfers to provinces and territories requiring the elimination of specific barriers to interprovincial trade and labour mobility.
• The 2024 Fall Economic Statement announces that the Minister of Public Safety, Democratic Institutions and Intergovernmental Affairs will lead a review of the Canadian Free Trade Agreementto ensure it remains helpful for Canada's national economic interest in the face of evolving global trade uncertainties.
• The 2024 Fall Economic Statement proposes to provide $4.3 million over three years, starting in 2025-26, to the Canadian Food Inspection Agency to advance mutual recognition in the agriculture and agri-food sector and support businesses in building capacity to meet federal regulations and expand trade across the country.

Recognizing Credentials Earned Abroad

Newcomers who saved lives practicing medicine abroad deserve to be able to do so here—and our health care system desperately needs them. The same is true for construction workers, and many other in-demand professions.

Canada has the world's most skilled workforce, with 63 per cent of Canadians aged 25-64 holding a post-secondary credential. But barriers, including foreign credential recognition, continue to exclude key in-demand professionals from participating in the economy. More workers means a more productive economy.

That is why the federal government is leading a Team Canada approach with provincial and territorial governments to improve foreign credential recognition and streamline the entry into the labour force for newcomers. Recent federal investments to support foreign credential recognition include:

• $115 million in Budget 2022 to enhance the Foreign Credential Recognition Program to reduce barriers to credential recognition for internationally trained health professionals;
• A $50 million top-up in Budget 2024 to the Foreign Credential Recognition Program, with a focus on the construction sector to support housing construction; and,
• $77.1 million in Budget 2024 for Health Canada to create 120 new residency positions for international medical graduates, increase assessment capacity, and help newcomers navigate credential recognition systems.

Since 2015, the Foreign Credential Recognition Program has supported hundreds of skilled newcomers to re-enter in-demand occupations. This includes over 700 new dentists, nurses, pharmacists, and engineers in Nova Scotia through the Bridging to Licensure and Employment Project, and 600 workers, mostly physicians and teachers, through the Improving Employment Pathways for Immigrants in Alberta project.

All of Team Canada needs to move faster on this work to meaningfully overcome labour shortages, protect economic competitiveness, and enable interprovincial labor mobility. Provinces, and the provincial regulatory colleges under their jurisdiction, have had decades to streamline processing and recognition of both interprovincial and foreign credentials.

Given provinces' slow approach to credential recognition, both newcomers to Canada and Canadians moving to a new province should be able to assess how long it will take to have their credentials recognized.

• The 2024 Fall Economic Statement announces that the federal government is considering further measures to create a more nimble and resilient labour market, that supports newcomer integration into their chosen professions, including by removing the tax-exempt status of regulatory colleges that do not accelerate credential recognition and publishing a national credential recognition performance framework.

Details on this framework will be announced in Budget 2025.

Free movement of workers more broadly is vital to the growth and prosperity of the Canadian Economy. The Red Seal Program facilitates labour mobility in 54 trades by setting common standards to assess the skills of trades people across Canada. Tradespersons who have successfully passed the Red Seal examination receive a Red Seal endorsement which indicates that the tradesperson has demonstrated the knowledge required for the national standard in that trade.

To further improve labour mobility: 

• The 2024 Fall Economic Statement announces the government's intent to consider a similar standard setting framework as the Red Seal Trade Program to enable the mobility of health care workers across the country.

Boosting Union Skills Training Programs

Skilled trades are vital to the growth and prosperity of the Canadian economy. Unions can complement training institutions and play a critical role in ensuring apprentices and tradespeople get high-quality hands-on training to secure rewarding, in-demand jobs of the future. That is why, the government has invested nearly $305 million since 2017 in the Union Training and Innovation Program to support apprenticeship training as part of the Canadian Apprenticeship Strategy.

Employment and Social Development Canada (ESDC) is preparing to launch an intake process under the Investments in Training Equipment stream. In early 2025, ESDC will also begin the implementation of the $90 million investment in Apprenticeship Service announced in Budget 2024, which will help create placements with small and medium-sized enterprises for apprentices.

New Digital Skill Training Tools for Apprentices

The Build Your Skills online learning platform developed by SkillPlan, in collaboration with the Canada Building Trades Union and provincial building trades councils, supports apprentices in the construction trades by offering literacy and learning resources to help them succeed in their training. Through its Workplace Series, the platform also helps apprentices, trainers and employers to strengthen diversity and inclusivity, Indigenous awareness, and mental health and wellness in the workplace. Last year, over 3,000 apprentices have benefited from this platform, including 2,000 from equity-deserving groups. This project was made possible by the $5.5 million investment from the Government of Canada and the Future Skills Centre.

Training Workers to Build More Homes

To further support the skilled trades housing workforce development, the government is investing a $45 million through the Union Training and Innovation Program's Innovation in Apprenticeship stream and the Women in the Skilled Trades Initiative. This investment will support a wide range of projects with existing partners to address barriers to success in apprenticeship training, particularly for equity deserving groups. For example, the Next Steps for Success project by Trade Winds to Success in Alberta helps to remove barriers for hundreds of Indigenous persons interested in pursuing a career in the residential construction sector and led to the construction of 15 homes in 13 First Nation and Métis communities.

Protecting Workers Against Wage Theft

While Canadians struggle with the cost of living, there are some businesses that fail to pay compensation rightfully owed to their workers—this is called wage theft. And more often than not, it is the most vulnerable Canadian workers who are targeted. While wage theft is illegal and penalties exist, it is clear that more needs to be done to protect workers from this flagrant infringement on workers' rights.

To crack down on employers that do not pay workers the wages they have earned and are entitled to under the law, the government is taking action to ensure workers are protected and compensated for the work they perform.

• The 2024 Fall Economic Statement announces the government's intent to make regulatory changes to substantially increase the penalties imposed on federally regulated employers who commit wage theft. By substantially increasing penalties, the government can hold employers accountable, penalize bad actors, and protect the hard-earned wages of Canadian workers. The government will consult on proposed changes to the penalty amounts.

Protecting Workers from Non-Compete Agreements

A competitive labour market that fosters innovation and boosts productivity is crucial for economic growth. However, some employers are restricting workers' ability to find new work in their existing fields through unreasonable non-compete agreements. These non-compete agreements prevent employees from taking a job at a competing business or starting their own competing business. In doing so, non-compete agreements limit the bargaining power of workers, create barriers to labour mobility, reduce competition, and stifle productivity growth.

There is evidence that non-compete agreements could be used in an exploitative manner to retain low-wage workers in industries with poor labour standards and high turnover rates. The broad use of restrictive and unfair requirements on labour mobility is negatively impacting labour market mobility and economic growth.

• The 2024 Fall Economic Statement announces the government intends to substantially restrict the use of non-compete agreements to protect workers' rights, promote labour mobility, strengthen competition, and boost innovation and productivity. The government will launch consultations on proposed legislative amendments and intends to enact changes in early 2025.

Protecting Artists' and Creators' Copyrights

Artists, particularly visual artists, are among the lowest income earners in Canada despite their significant cultural contributions. An Artist's Resale Right provides the creators of original visual artwork with a royalty whenever their work is resold through an eligible sale, offering an additional income stream.

• In the 2024 Fall Economic Statement, the government announces its intent to amend the Copyright Act to create an Artist's Resale Right in Canada, ensuring Canadian visual artists benefit from future sales of their work.

Launching the Indigenous Loan Guarantee Program

Indigenous communities have fewer options to leverage existing assets as collateral, leading to barriers to accessing affordable capital. Increasing access to affordable capital is a proven way to ensure that Indigenous communities can benefit from local economic opportunities on their own terms. By enabling Indigenous groups' access to affordable capital, the Indigenous Loan Guarantee Program is a key economic reconciliation measure that will make all Canadians more prosperous.

Budget 2024 announced the creation of an Indigenous Loan Guarantee Program, which will provide up to $5 billion in loan guarantees to support Indigenous ownership in natural resource and energy projects. The government has created the Canada Indigenous Loan Guarantee Corporation to provide these loan guarantees to Indigenous groups. By offering loan guarantees, the Canada Indigenous Loan Guarantee Corporation will facilitate Indigenous groups obtaining more favourable borrowing rates. This will promote increased Indigenous ownership of cash-generating assets in the natural resource and energy sectors, meaning that they will receive greater benefits from owning shares of those projects.

The government is announcing the launch of the Canada Indigenous Loan Guarantee Corporation and the opening of its loan guarantee application portal to accept applications from interested Indigenous applicants.

What is a Loan Guarantee?

A loan guarantee is a financial tool used to back loans provided by a lender or financial institution. The loan guarantee assures repayment of the loan even if the borrower cannot repay the debt (i.e., the Government of Canada will assume the debt obligation if the borrower defaults after other recovery methods have been explored). Loans backed by federal loan guarantees lower the cost of borrowing. The Canada Indigenous Loan Guarantee Corporation will issue loan guarantees to support Indigenous groups' acquisition of an equity stake in commercially viable projects in the natural resource and energy sectors.

Importantly, a loan guarantee is not direct financing for a project. The Canada Indigenous Loan Guarantee Corporation will not offer loans, grants, guarantees for non-equity loans, or other forms of financial support.

The strategic objectives of the Canada Indigenous Loan Guarantee Corporation include:

• Advancing Canada's Indigenous economic reconciliation and self-determination objectives by supporting Indigenous groups to share in the benefits of natural resource and energy projects through meaningful equity participation;
• Unlocking access to affordable capital for Indigenous groups by providing loan guarantees that reduce borrowing costs for Indigenous groups investing in energy and natural resource projects that generate long-term economic benefits;
• Supporting Indigenous economic opportunities and economic development priorities by creating and enhancing economic prosperity now and in the future;
• Facilitating Indigenous-industry partnerships with the private sector, nationally and across a range of projects within the energy and natural resource sectors;
• Delivering better projects guided by Indigenous leadership and knowledge in the project ownership and governance structure; and,
• Building Indigenous business and commercial dealmaking capacity by encouraging pursuit of more commercial transactions to grow Indigenous economies and benefit Indigenous people.

Applications submitted to the Canada Indigenous Loan Guarantee Corporation will be accepted on an ongoing basis. Following an initial eligibility assessment, prioritized applications will undergo due diligence and commercial assessment.

To support Indigenous groups in obtaining the necessary financial, legal, commercial, and technical advisory services needed to meaningfully participate in decisions on equity ownership in projects, the Indigenous Loan Guarantee Program will also provide funding in investment analysis and due diligence funding. Access to this funding will be available through Natural Resources Canada.

Further details on the mandate, strategic objectives, program elements, eligibility criteria, and assessment process can be found in the related Technical Backgrounder published today by the Department of Finance.

Canada Infrastructure Bank Investments

The Canada Infrastructure Bank is hard at work enabling the construction of more infrastructure that benefits Canadians and attracts private capital. The Canada Infrastructure Bank has now made over $13 billion in commitments for more than 70 projects across its green infrastructure, clean power, public transit, trade and transportation, and broadband infrastructure priority sectors. This represents over $36 billion in total investment in projects that will improve the lives of Canadians across the country.

Recent Canada Infrastructure Bank investments include:

• $118 million loan to Elemental Energy for the Higgins Mountain Wind Project in Nova Scotia;
• $283.5 million loan to AltaLink and ATCO to support construction of a new electricity transmission line in the counties of Red Deer, Lacombe, and Stettler, Alberta;
• $337 million loan for the HTEC H2 Gateway program to enable hydrogen production and refuelling in Western Canada;
• $150 million loan to the Prince Rupert Port Authority for a new export logistics hub in British Columbia; and,
• A new $100 million loan participation agreement with the First Nations Bank of Canada for enabling infrastructure in First Nations, Métis, and Inuit communities.

The Canada Infrastructure Bank is working to allocate its remaining capital to enable more infrastructure projects across the country.

Keeping Northern Manitoba Connected by Rail

The Hudson Bay Railway is the only surface transportation option that is available year-round between several remote and Indigenous communities in Northern Manitoba from The Pas to Churchill. It also links the Port of Churchill, Canada's only deep-water Arctic port, to the North American transportation network. Maintaining this railway link is fundamental to securing our Arctic, protecting good jobs, transporting essential supplies, and ensuring residents can get to where they need to go.

• The 2024 Fall Economic Statement proposes to provide $43.8 million over two years, starting in 2025-26, to Transport Canada to support the operations and maintenance of the Hudson Bay Railway through the Remote Passenger Rail Program. 

Better Public Transit in the National Capital Region

A historic lack of investment in transportation infrastructure in the National Capital Region has resulted in long commutes, truck congestion that slows the flow of goods, and poor public transit connectivity. Since 2015, the federal government has made investments to catch-up infrastructure, particularly public transit, for Ottawa and Gatineau residents and visitors. In 2017, the government provided $1.1 billion to build Ottawa's Light Rail Transit Phase Two Project. Most recently, in June 2024, it partnered with the Government of Quebec to make a joint investment of $163.5 million for planning stages of the 22-kilometre Quebec portion of the Gatineau-Ottawa tram project.

• The 2024 Fall Economic Statement proposes to provide $31.6 million over three years, starting in 2025-26, to conduct feasibility studies for the 2- kilometre federal and Ontario portions of the Gatineau-Ottawa tram project. This funding builds on the joint investment with Quebec and means the federal government has now put forward the funding required to complete feasibility studies for the proposed tram's entire 24-kilometre route.
• The 2024 Fall Economic Statement also announces the government's commitment to an additional multimodal bridge over the Ottawa River to further improve transportation connectivity in the National Capital Region. This commitment for the project known as the "Eastern Bridge" enables the next phase of planning, including the impact assessment, design, preliminary site preparation, and a procurement strategy. Following Corridor 5, the Eastern Bridge will become an important piece of transportation infrastructure that will optimize public transit networks and eliminate truck traffic in congested downtown cores, in turn, boosting economic growth in downtown Gatineau and Ottawa, accelerating commutes, and making active transportation safer.

Building Arctic Bay Harbour in Nunavut

Canada's oceans are vital links for remote coastal communities that depend on our waterways. Small craft harbours, from the Pacific, to the Atlantic, to the Arctic, improve safe access for fish harvesting, tourism, and intercommunity travel. Building on Budget 2024 investments in small craft harbours in Atlantic Canada:

• The 2024 Fall Economic Statement proposes to provide $105.9 million over seven years on a cash basis, starting in 2025-26, with $4.1 million ongoing to Fisheries and Oceans Canada for the construction of a small craft harbour in Arctic Bay, Nunavut. This investment will provide new opportunities for employment and economic activity, particularly benefiting Northerners working in commercial fisheries, tourism, construction, and marine engineering sectors.

2.4 Bolstering Continental Growth 

For more than the last one hundred years, Canada and the U.S. have worked together to build prosperous, vibrant, and free economies that make us all more prosperous and more secure. Since the establishment of the Auto Pact in 1965, our economies have grown closer, and more interdependent as our shared values have led to greater and greater cooperation.

Today, more than $3.3 billion in goods and services cross the border each day, and every year the two economies exchange more than $1 trillion in goods and services. Canada is the largest market for 36 U.S. states, and the leading customer for American agriculture, autos and auto parts, and wood and paper products—importing more than China, Japan, the United Kingdom, and France combined. Canada is also the largest supplier of energy to the U.S., serving as a safe, secure, and democratic partner to keep prices down for Americans, and achieve energy independence for our countries. What is more, Canada has the potential to be the supplier of choice for numerous critical minerals that will form the backbone of the technologies that will propel our economies into the future.

With these considerable advantages, the Canada-U.S. partnership has the potential to be a beacon of stability in an increasingly dangerous and unpredictable world. As global energy markets are roiled by instability around the world, the Canada-U.S. partnership can keep prices down for Canadians and Americans. As housing prices climb, our collaboration and plentiful, affordable lumber, can bring the promise of homeownership back into reach of Canadians and Americans. Working together, we can protect our manufacturing and blue collar workers from unfair foreign competition, and we can provide our cutting-edge sectors, like AI, with the power they need to thrive.

Today, we have a choice. We can choose to recognize the shared threats we face from our adversaries, and strengthening our ties accordingly to secure generations of prosperity for North American workers. Or, we can choose to damage the most successful trading relationship in history, and hurt ourselves and each other.

Canada is choosing to strengthen our ties. Workers, on both sides of the border, are counting on it. But if threatened, Canada is prepared to respond as required, to protect Canadian workers, Canadian businesses, and our economic security.

That is why the government is taking action to prepare for any global uncertainties by securing our economic advantages—against hostile economic actors and global market distortions, particularly China's overcapacity and oversupply, caused by non-market policies and practices.

Canada is doing this by ensuring workers and industry have the tools and protections they need to secure critical supply chains and respond to foreign threats. As part of securing our economy and continent, we've already doubled our planned defence spending since 2015. And now, we're strengthening continental defence and Arctic security by strengthening Canada's domestic military industrial capacity to support our progress towards NATO's 2 per cent target. In doing so, our goal is to strengthen Canada's relationships with allies and likeminded partners to advance the shared interests of our workers and our collective economic and national security.

Protecting Economic Security in a Changing World

The changing global trade, economic, and political environment today presents risks to the foundations of Canada's prosperity.

The government will always stand up for Canadian interests. In the past year, the government has acted to protect Canada's economy from the many risks present in today's complex geopolitical and economic environment:

• The National Security Review of Investments Modernization Act, which received Royal Assent in March 2024, strengthens Canada's foreign investment review regime by providing additional authorities for the government to mitigate national security risks that arise from investments and enhances collaboration with international partners.
• In May 2024, the government implemented export controls on certain quantum computing and semiconductor technologies and equipment with potential military applications to ensure their responsible development and transfer. Moving forward, we will continue to ensure that the export of critical and emerging technologies is done responsibly in close collaboration with allies and partners.
• The government is making investments to strengthen supply chains, particularly in strategic sectors that support Canada's clean economy, such as critical minerals and downstream value chains. To that end, the government will leverage all available tools to facilitate private sector investment, including through support at Export Development Canada.
• In October 2024, the government imposed a 100 per cent tariff on all Chinese EVs and a 25 per cent tariff on imports of Chinese steel and aluminum products, in response to the extraordinary threat to these sectors from unfair non-market competition, and insufficient or non-existent labour and environmental standards.
• To strengthen Canada's trade remedies system, Canada has taken significant steps to provide more robust protection against unfair trade, including through ongoing implementation of the Canada Border Services Agency Market Watch Unit, and continued engagement with industry on potential additional changes (e.g., anti-circumvention) to support further alignment with the U.S.
• This Fall Economic Statement announces new measures that will provide the government with additional tools to further protect Canada's economic security through more flexible import and export permits regime and reciprocal procurement policies, and to address supply chain risks related to forced labour.

Canada will aggressively advance new measures to defend our economic security interests, as informed by Canadians' input received during consultations on potential new economic security measures.

This includes developing a policy framework to mitigate risks posed by foreign entities owned, controlled, or influenced by a jurisdiction of concern, wherever they may operate. These entities could be a vector for policies and practices that undermine Canada's national or economic security—for example, they could be leveraged to serve state-driven objectives; benefit from non-market policies and nefarious practices that confer an unfair competitive advantage and harms Canadian businesses; or exert undue socio-economic-political influence in the countries in which they operate. Details on this policy framework will be announced in Budget 2025.

As well, while connected vehicles have improved driver safety and convenience, the technology and components that enable these systems create potential security risks for Canadians—such as the collection and manipulation of private data and information—that could be exploited by actors that seek to harm Canadian interests. To protect the safety and privacy of Canadians, the government is considering options for addressing the security risks associated with technologies and components used in connected vehicles that are sourced from certain jurisdictions.

As the government further develops measures to be more flexible and responsive to evolving global developments, we will work closely with likeminded partners with a view to aligning our approaches, reinforcing integrated supply chains, and defending the rules-based international trading system.

Securing Our Partnership with the United States

Deeply integrated Canada-U.S. supply chains underpin our collective economic competitiveness and prosperity. Canada is committed to working closely with the United States to bolster secure and resilient supply chains and mitigate risks of global disruptions by non-likeminded actors, particularly in strategic sectors such as critical minerals, nuclear fuels, and all forms of energy.

Canada is the United States' trusted partner for the oil needed to keep America growing and keep gas prices from rising. Last year, the United States imported over C$173 billion of oil, making up 60 per cent of all U.S. oil imports. Through Canada's network of 70 transborder oil and gas pipelines, we reliably and affordably deliver for America. Canadian crude oil keeps prices down at the pump for American drivers. Keeping North American energy flowing freely is also good for Canada. Our oil and gas sector, the largest sector of our trading relationship, represented almost 6 per cent of GDP last year, and supports more than 180,000 good Canadian jobs.

In addition to oil, Canada exports a lot of electricity to the United States. In 2023, Canada provided C$4.3 billion (US$3 billion) in electricity exports to the U.S., representing an affordable and reliable energy source for Americans, and benefiting households from New York to Minnesota to Washington. Canada today produces a surplus of electricity that ensures all Canadians benefit from among the lowest electricity bills per kWh in the world and our growing economy means Canada needs to produce even more electricity.

To promote safety, security and reliability, as well as to keep rates affordable on both sides of the border, we're actively working to renew our Columbia River Treaty with the U.S., which will optimize production along the basin that generates 25 per cent of all U.S. hydroelectricity consumption. Hydro-Québec is building new cross-border powerlines—including the Hertel-New York interconnection line project connecting to the US$6 billion Champlain Hudson Power Express which will reliably deliver 20 per cent of New York City's electricity and save New Yorkers US$17 billion in electricity costs over three decades.

To build on our shared economic interests and strengthen our partnership, in 2018, we signed the new NAFTA with President Trump's first Administration. Since the renewal of the world's greatest free trade agreement, workers in Canada and America have benefited from increased economic growth.

With respect to nuclear supply chains, Canada is working with its closest trading partner to develop stronger, more resilient North American nuclear supply chains, and to ensure our nuclear sector is not dependent on Russia.

Furthermore, the $500 million backstop for enriched fuel purchases by utilities announced in this Fall Economic Statement will support investments to increase North American enriched uranium production capacity, including high-assay low-enriched uranium (HALEU), while leveraging Canada's technological leadership and resource endowment advantages.

Moving forward, Canada will advance initiatives to address issues of common interest and priority with the United States—such as critical minerals and nuclear fuel supply chain security, steel and aluminum, and others—in the context of our bilateral and multilateral engagements, including Canada's upcoming presidency of the G7 in 2025.

Boosting Canadian Defence Production

In July 2024, the Prime Minister announced that Canada will reach NATO's 2 per cent spending target by 2032. Over the past three years, Canada has made crucial investments to achieve this commitment.

In Budget 2022, the government announced more than $15 billion over 20 years to support NATO's common budget and urgent operational needs of the Canadian Armed Forces in light of Russia's invasion of Ukraine. In June 2022, the government announced its commitment to a generational modernization of NORAD with around $38 billion over 20 years in additional dedicated funding. In Budget 2024, the government announced Our North: Strong and Free, an Arctic and continental defence focused defence policy update which included funding of an additional $73 billion over 20 years. Taken together since 2022, we have committed more than $125 billion over 20 years to strengthen national defence.

We understand that there is still more to do, and are focused on meeting our commitments to Canadians, and to our NATO allies. To do that, we need to build up our own military industrial capacity.

Canada will continue to strengthen its own military industrial capacity. This approach will boost Canada's economic growth and strengthen our economy by sourcing from Canadian suppliers, where doing so procures the capabilities our military needs on time and on budget.

Boosting Canadian defence procurement builds on the steps we have already taken to improve procurement systems, including strategic partnerships with industry and supporting Canadian defence innovation.

Friendshoring Canadian Supply Chains

We are standing up for Canada's national economic interests. We will use Canada's toolkit to defend Canada's economic security. In doing so, Canada will further strengthen our relationships with allies and likeminded partners to advance our collective interests and security. 

When our trading partners choose to compete unfairly, we will take action to defend Canadian workers and businesses. We have taken exceptional measures in response to the extraordinary threat to critical Canadian manufacturing sectors and the electric vehicle industry from unfair non-market competition from China. These measures include:

• Imposing a 100 per cent tariff on all Chinese EVs, effective October 1. This includes electric and certain hybrid passenger automobiles, trucks, buses, and delivery vans.
• Imposing a 25 per cent tariff on imports of Chinese steel and aluminum products, effective October 22.
• Limiting eligibility for federal zero-emission vehicle incentives to Canada's free trade partners.

These important steps are just one part of the government's work to protect Canada's economic security. These measures are enabling the government to better respond to global developments that hurt our collective prosperity. We are ensuring alignment with the approaches of our likeminded trading partners, helping to make our supply chains more resilient, to protect Canada's national interest.

More Tariffs to Combat Unfair Chinese Trade Practices

China's intentional, state-directed policy of overcapacity and oversupply is a serious threat to Canadian manufacturing, Canadian jobs, and the Canadian economy. Over the past months, the government has acted decisively to address this problem and ensure that no one can use Canada as a back door to the North American market. We are energetically advancing this work. 

Already this year, Canadaimplemented tariffs on Chinese imports of EVs, steel, and aluminum products. We did this in lock-step with our largest trading partner to protect our tightly integrated supply chains. We also amended rules for consumer incentive programs for zero-emission vehicles and chargers, so they would only benefit Canada's free trade agreement partners. And we recently concluded consultations on the potential implementation of further tariffs.

• The 2024 Fall Economic Statement announces Canada's intent to impose tariffs on imports of certain solar products and critical minerals from China early in the new year. Canada also intends to impose tariffs on semiconductors, permanent magnets, and natural graphite from China beginning in 2026. These measures will prevent Chinese non-market trade practices from causing unfair and harmful market distortions in Canada and throughout the North American continent. Further details on these tariff measures will be announced soon.

The government is protecting Canadian jobs and industry against countries that do not play by the rules they have agreed to. We will continue to advance this file aggressively and will have more to say.

Restricting Trade with Countries that Harm Canada

Canada is deeply concerned by autocratic regimes' use of economic coercion, unfair trade practices, and exploitation of supply chain dependencies. These are increasingly prevalent economic security threats by bad actors around the world.

To combat emerging threats and protect our economy, Canada needs to strengthen our retaliatory mechanisms. One such tool, the Export and Import Permits Act, currently sets out specific circumstances under which the government could include goods and technology on the Import Control List and Export Control List to restrict their importation or exportation.

• To ensure that Canada's trade controls regime is robust and responsive to evolving economic security threats, the 2024 Fall Economic Statement announces the government's intent to propose legislative amendments to the Export and Import Permits Act that would allow the government to restrict the importation or exportation of items in response to actions of another country that harm Canada or to create more secure and reliable supply chains. 

Reciprocity Across Our Trading Partnerships

Canadian workers and businesses deserve to be treated fairly when doing business abroad. Our trading partners should grant Canadian businesses the same access that their companies enjoy in Canada.

Beyond our tariffs on Chinese imports which are securing the North American market from oversupply and overcapacity, Canada has already demonstrated it will stand up for our businesses and workers by energetically defending the national interest, including:

• Retaliation to U.S. section 232 tariffs on steel and aluminum: In 2018, when the U.S. imposed illegal tariffs on imports of Canadian steel and aluminum, Canada imposed "dollar-for-dollar" retaliatory tariffs against $16.6 billion of imported steel, aluminum, and other products from the U.S. After 12 months, the U.S. dropped the tariffs on Canada.

Further to these actions already taken to protect our economy, the Policy Statement on Ensuring Reciprocal Treatment for Canadian Businesses Abroad, released alongside the 2023 Fall Economic Statement, set forth Canada's approach for protecting Canadian workers and businesses from unfair foreign trade and economic practices.

• The 2024 Fall Economic Statement announces that going forward, reciprocity will be considered as a requirement for all federal spending and policies. This approach will be applied to a range of new measures including, but not limited to, government procurement, including sub-national infrastructure spending, investment tax incentives, grants and contributions, technical barriers to trade, sanitary and phytosanitary measures, investment restrictions, and intellectual property requirements.

Reciprocity in Federal Procurement

Canadian businesses deserve to be treated fairly. If countries are discriminating against Canadian businesses, those countries shouldn't expect their companies to receive better access to opportunities in Canada than they afford to Canadian companies. Reciprocal procurement policies will level the playing field for Canadian workers and businesses.

Recognizing this, the federal government is advancing its reciprocity policy, which will match access to federal procurement opportunities in goods and services to the access countries provide to Canadian businesses. This will ensure that federal procurement dollars benefit Canadian workers and businesses, strengthen supply chains with trusted allies, and ensure relationships with our trading partners are mutually beneficial.

• The 2024 Fall Economic Statement announces that starting in spring 2025, the government will strictly enforce its procurement trade obligations to limit access to Canada's federal procurement market to Canadians and our trading partners who provide access to Canada.
• The 2024 Fall Economic Statement announces the government will further explore the possibility of placing domestic content conditions on foreign suppliers' participation in federally funded infrastructure projects and creating a program to prioritize doing business with small Canadian businesses and Canadian innovators.

Canada is a Global Nuclear Leader

Nuclear energy will play a significant role in Canada and around the world to achieve net-zero emissions by 2050 and meet the rising electricity demands of AI. During the World Climate Action Summit of the 28th Conference of the Parties to the UN Framework Convention on Climate Change, Canada and 24 other countries launched the Declaration to Triple Nuclear Energy. Simply put, nuclear power is vital for Canada to generate the power our electricity grids need to fuel a growing economy.

Canada's nuclear energy sector exemplifies the nation's commitment to sustainable and reliable power generation, and to peaceful and responsible use of nuclear technology. We have a long history of leadership in nuclear energy, dating to the 1940s with the establishment of our Chalk River Laboratories, leading to the development of the CANDU (CANadian Deuterium Uranium) reactor.

Canada is making significant strides in nuclear energy investment and development with publicly announced plans for new nuclear reactors across the country, supported by the following recent policy announcements.

• As announced in this Fall Economic Statement, solely having the Canadian Nuclear Safety Commission process apply to certain brownfield nuclear projects, as opposed to also requiring a federal impact assessment.
• The 15 per cent Clean Electricity investment tax credit, the 30 per cent Clean Technology investment tax credit, and the 30 per cent Clean Technology Manufacturing investment tax credit will support investments in nuclear electricity generation, nuclear power supply chains, and nuclear fuel production.
• Committing up to $3 billion in export financing to Romania for two new CANDU reactors, enhancing energy security and reducing reliance on Russian energy while creating Canadian jobs.
• Providing $50 million for Bruce Power's nuclear expansion.
• Investing $970 million in small modular reactors (SMRs) through the Canada Infrastructure Bank in Ontario Power Generation's project at Darlington, with other funding sources also supporting various SMR designs and development efforts.
• Updating, in November 2023, Canada's Green Bond Framework to make certain nuclear energy expenditures eligible.
• Allocating $3.1 billion in Budget 2024 to Atomic Energy of Canada Limited for nuclear research and environmental protection initiatives.
• Getting nuclear projects built in a timely, predictable, and responsible fashion, including setting a three-year target for nuclear project reviews, as announced in Budget 2024.

Strengthening Nuclear Fuel Supply Chains

Canada is a global leader in nuclear energy, which is crucial for achieving net-zero emissions, enabling economic growth, and supporting our energy security and that of our allies. Looking to the future, innovative types of reactors will require enriched nuclear fuel. The nuclear supply chain must be free from Russian influence, which Canada and Sapporo 5 partners (Canada, Japan, France, the United Kingdom, and the United States) have committed to catalyze through public and private investments.

The federal government is stepping up to de-risk energy utility investments in nuclear, to strengthen the supply chains fueling clean nuclear power in our trusted trading partners, particularly the U.S., and ensure that Canada's electricity grids can decarbonize.

• To support demand for allied enriched nuclear fuel and bolster supply chain resiliency, the 2024 Fall Economic Statement announces the government's intent to backstop up to $500 million in enriched nuclear fuel purchase contracts from the United States or other allied countries, including high-assay low-enriched uranium (HALEU), subject to further consultations with industry stakeholders on program details, and provide $4 million over 10 years, starting in 2024-25, for Natural Resources Canada to administer the program.

Canada's Critical Minerals Advantage

The International Energy Agency (IEA) forecasts that global demand for critical minerals—including copper, lithium, cobalt, and rare earth elements—that are needed to build clean energy technologies is set to double by 2030. This represents a generational opportunity for Canada, given our country's extensive reserves, our expertise in the mining industry, and Canada's position as the global leader for mining financing.

All programs and initiatives under Canada's $3.8 billion Critical Minerals Strategy are now underway to bolster clean energy and sustainable critical minerals development, including funding for Indigenous engagement and participation in the mining sector. The government has implemented many key initiatives under the Critical Minerals Strategy since its launch, including under the following areas:

Infrastructure: The $1.5 billion Critical Minerals Infrastructure Fund has completed its first call for proposals. The Fund supports the development and deployment of clean energy and transportation infrastructure that will enable the development and expansion of critical minerals projects in Canada. 

• As a recent example of support provided under the Critical Minerals Infrastructure Fund, the government announced a joint investment of up to $195 million with the Government of British Columbia to upgrade key highway infrastructure in the northwest region. These investments will support critical minerals development in that region, improve community access and safety, and create good mining jobs across the province.

Research and Development: Since the launch of the Strategy, the government has implemented initiatives supporting exploration, research, development, and innovation across the critical minerals sector.

• The Critical Minerals Research, Development, and Demonstration Program supports the advancement of critical minerals technologies and processes through a federal research and development (R&D) stream and a contribution funding stream. To date, the Program has implemented over 75 R&D projects and invested over $62 million to support 14 demonstration projects, including projects covering battery minerals, recovering critical minerals from mine tailings, and rare earth elements processing.

Through the $3.8 billion Critical Minerals Strategy and other federal investments, the government is supporting the growth of the critical minerals sector to create economic opportunities for Canada, promote the production and supply of critical minerals, and friendshore our supply chains.

Strengthening Supply Chains for Responsibly Produced Critical Minerals

Canada is home to the critical minerals the world needs to power the 21^st century industrial transition. Resilient and secure supply chains for critical minerals—essential inputs for clean technology, defence, and advanced manufacturing—are vital for safeguarding Canada's national security, economic security, and prosperity. Canada and likeminded partners are working to diversify supply sources to mitigate risks of supply chain vulnerabilities, particularly from jurisdictions that do not share Canada's, and our allies', democratic values and free-market principles.

Federal investments through Canada's $3.8 billion Critical Minerals Strategy, the Clean Technology Manufacturing investment tax credit, and the EV Supply Chain investment tax credit are positioning Canada as a supplier of choice for responsibly produced critical minerals. As of June 2024, Canada ranked among the top five producers for 10 critical minerals, and has 56 critical minerals mines, 26 critical minerals processing facilities, and 151 active advanced stage projects.

A challenge facing major projects in Canada and elsewhere is unpredictable price fluctuations that create uncertainty for investors and undermine long-term project viability. While price fluctuations also impact other commodities, the distortive practices of dominant market actors operating throughout the world exacerbate price volatility and make this a particularly concerning issue in the critical minerals sector. According to the International Energy Agency, battery critical minerals, such as lithium, cobalt, nickel, copper, and graphite, have seen the greatest price volatility.

To address this challenge, Canada will work with the United States and other likeminded partners to address the impacts of non-market policies and practices that unduly distort critical mineral prices. This includes ensuring that market participants recognize the value of critical minerals produced responsibly, with due regard for high environmental standards and labour practices.

Advancing Border Carbon Adjustments

Canadian industry is serious about doing their part in the fight against climate change. However, many of their overseas competitors are not, and continue to pollute without any concern for the environmental harms they are causing. In many cases, this disregard means that foreign competitors are able to produce goods at lower costs than their competitors in high standard jurisdictions. Our allies are moving forward to address this.

Simply put, Border Carbon Adjustments level the playing field for responsible Canadian companies by ensuring foreign businesses that export into Canada also pay for their emissions.

In 2023, the European Union implemented their own Carbon Border Adjustment Mechanism on carbon intensive products and those at most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. In the United States, there have been at least five different pieces of legislation introduced in the 118th Congress which aim to achieve a similar goal.

As a next step in Canada's efforts, the government is now working with key emissions intensive, trade exposed sectors to assess the domestic emissions intensity of their Canadian production.

Engagement with stakeholders will provide valuable input to the ongoing consideration of potential measures to address high-emissions imports, including Border Carbon Adjustments and emissions standards. At the same time, Canada is engaged with our like-minded partners in pursuit of collaborative approaches to mitigate carbon leakage risks, both bilaterally and through the G7, World Trade Organization, Organisation for Economic Co-operation and Development, and International Energy Agency.

Eradicating Forced Labour from Our Supply Chains

Forced labour is never acceptable anywhere in the world and we must ensure that our global supply chains remain free from these abuses.

That is why in Budget 2024, Canada announced a commitment to eradicate forced labour from Canadian supply chains.

• The 2024 Fall Economic Statement announces the government's intent to introduce legislation to create a new supply chain due diligence regime, requiring government entities and businesses to scrutinize their international supply chains for risks to fundamental labour rights and take action to resolve these risks. A new oversight agency will be created to ensure ongoing compliance.
• The 2024 Fall Economic Statement announces the government's intent to introduce legislative amendments to strengthen Canada's ban on imports of goods produced with forced labour, including increasing the onus on importers to demonstrate that their supply chains are free of forced labour. To implement these new regimes, the 2024 Fall Economic Statement proposes to provide $25.1 million over two years, starting in 2025-26, to Global Affairs Canada and the Canada Border Services Agency.