Canada commits to historic investments in clean electricity and fresh water in Budget 2023, but leaves loopholes for fossil fuels

The International Institute for Sustainable Development (IISD) views Canada's 2023 federal budget as a significant step toward a net-zero economy, noting billions for clean energy and CAD 800 million for freshwater protection. However, the IISD warns that the budget maintains loopholes for fossil fuels, specifically through carbon capture and storage (CCS) funding and the inclusion of abated natural gas in clean electricity tax credits, which may undermine commitments to end inefficient fossil fuel subsidies.

• The 2023 federal budget includes significant funding for environmental protection and adaptation, including nearly CAD 800 million for freshwater protection to establish the Canada Water Agency and CAD 1.6 billion for the National Adaptation Strategy.
• Canada has introduced new clean energy investment tax credits (ITCs) and allocated CAD 3 billion in direct clean electricity spending to remain competitive globally, particularly in response to the US Inflation Reduction Act.
• The budget contains loopholes that allow for continued fossil fuel support, such as an additional CAD 520 million for the carbon capture and storage (CCS) investment tax credit and the eligibility of abated natural gas under clean electricity ITCs.
• The IISD notes that the budget failed to announce a phase-out of existing tax subsidies for fossil fuels, which could conflict with Canada's goal to end inefficient fossil fuel subsidies within the year.
• Experts suggest Canada must invest approximately 2% of its GDP annually in climate investments to maintain global competitiveness and mitigate climate change impacts.

APA

International Institute for Sustainable Development (2023). Canada commits to historic investments in clean electricity and fresh water in Budget 2023, but leaves loopholes for fossil fuels. https://www.iisd.org/articles/statement/canada-budget-2023

Chicago

International Institute for Sustainable Development. Canada commits to historic investments in clean electricity and fresh water in Budget 2023, but leaves loopholes for fossil fuels. 2023. https://www.iisd.org/articles/statement/canada-budget-2023.

Wikipedia

{{cite press release |author=International Institute for Sustainable Development |title=Canada commits to historic investments in clean electricity and fresh water in Budget 2023, but leaves loopholes for fossil fuels |date=28 March 2023 |url=https://www.iisd.org/articles/statement/canada-budget-2023 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{internationalinstituteforsustainabledevelopment2023canada, author = {{International Institute for Sustainable Development}}, title = {{Canada commits to historic investments in clean electricity and fresh water in Budget 2023, but leaves loopholes for fossil fuels}}, publisher = {International Institute for Sustainable Development}, year = {2023}, month = mar, url = {https://www.iisd.org/articles/statement/canada-budget-2023}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }