Monday, June 24, 2024

Svante’s Cleantech Facility, Valued at $165M, Does Not Qualify for Tax Credit

CEO Warns of Potential Exodus of Carbon Capture Solution Providers from Canada due to Lack of Financial Support

CEO Claude Letourneau of Burnaby-based Svante Inc. is disappointed in the Canadian government’s lack of financial support for carbon capture solution providers. This gap in support has led Letourneau to consider moving his company to the U.S., where more appealing financial incentives are offered for CCUS investment and manufacturing.

Svante Inc. is a key player in carbon capture technology, investing $165 million in a new Centre of Excellence for Carbon Capture and Removal in Burnaby. However, when the federal budget was released last month, carbon capture equipment and manufacturing were not eligible for the clean technology manufacturing investment tax credit, leaving Svante unable to claim Ottawa’s 30 per cent tax credit.

Other CCUS technology providers in Canada have been acquired by international companies or moved to the U.S. for better financial incentives. Letourneau has received numerous calls from investors and states in the U.S. offering support, while Canada lags behind in providing incentives for companies like Svante to stay.

Letourneau expressed his frustration, stating, “I’m not supported by my Canadian government.” The lack of support in Canada compared to the U.S. not only affects Svante Inc. but also puts Canada’s carbon capture innovators at a disadvantage in the global market.

Ottawa’s Department of Finance explained that the manufacturing of CCUS equipment is not eligible for reduced tax rates due to difficulties in identifying fabricated components specifically for CCUS at the manufacturing stage. While there are some incentives in Canada for CCUS projects, they do not match up to those offered by the U.S. government, particularly the 48C program which provides tax credits for setting up manufacturing facilities for CCUS equipment and materials.

Letourneau stressed the importance of including CCUS incentives under law in Canada to support green manufacturing and carbon capture technologies. Without the necessary financial support, more companies like Svante Inc. may choose to relocate to the U.S., where they can benefit from better incentives and support for their operations.

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