By Collin Gallant
Southern Alberta Newspapers
Medicine Hat’s Conservative MP says the new federal budget fails to address the long-term affordability crisis, adds to a growing deficit and won’t lessen the housing crisis.
“The headline items are probably what we were expecting from this government: taxes were not cut, deficit spending and new inflationary spending,” he said during a tele-press availability from Ottawa.
“Working Canadians and low-income Canadians will suffer the most. That’s the bottom line.”
The budget, tabled late Tuesday by Finance Minister Chrystia Freeland, predicts $20 billion more in revenue, but $60 billion in higher spending on items like finalizing a dental plan and higher health transfers to provinces.
A new grocery bill offset program would mimic the GST rebate and about $8 billion would be spent this year on green energy projects.
The Liberal government this year will also develop a system to require government to offset the costs to companies related to investing in lower emissions from operations now if a future government cancels or reduces the carbon levy.
Currently, avoiding the added cost of carbon compliance could be seen as a major incentive to take action, but a long-standing Conservative Party promise to cancel the carbon tax is creating some uncertainty for companies.
Motz said it was “disturbing” that the government would tie its own hands when looking to reduce taxes.
A GST top-up of $467 for a family of four will not go far with food inflation near double digits, he said.
“That’s instead of long-lasting benefits” of lowering inflation by reducing government spending, said Motz.
Motz said he was still studying industrial policy released late in the day for potential benefits to the Alberta economy, but said in general, his constituents in Medicine Hat-Cardston-Warner don’t have faith in the government to improve the economy.
Government MPs from the province squarely backed the budget and called Conservative attacks partisan.
“No matter what’s in there to position Canada for greatness in the future, the Conservatives will vote against it,” said Liberal Edmonton-area MP Randy Boissonnault.
“It’s what they’ve always done and what they always do. We’ll keep working for Canadians.”
The budget does include some response to major U.S. federal programs that economists feared may drain investment south of the border, and in several areas of interest in southeast Alberta, which is seeking to kick-start carbon capture and hydrogen production initiatives.
Canada will offer $8 billion this year, and $55 billion over five years, for tax credits and low-carbon initiatives for things like hydrogen production, mining and renewable energy projects.
A Carbon Capture, Storage and Utilization tax credit, costing an estimate $520 million over five years, could also apply, and will now be tied to “prevailing wage” requirement for companies that take advantage of the tax credit as of October 2023.
Heather MacPherson, the New Democrat MP for Edmonton-Strathcona, said “targeted” inflation-fighting rebates and green-industrial strategy that keys on higher wages was the result of her party pushing the Liberals.
“Thanks to the hard work of Alberta Federation of Labour … and the NDP, Budget 2023 will include hundreds of millions (of dollars) for good-paying industrial jobs in Alberta,” she said in a statement. “Putting workers first means a better future for Albertans.”
The Clean Hydrogen Investment Tax Credit would provide 40 per cent of eligible costs back to producers of hydrogen that emits low amounts of carbon, but as little at 15 per cent or nothing to processors that see higher CO2 emissions from operations.
It would also rebate 15 per cent of cost of equipment to process hydrogen into ammonia, which is seen as a safe transport and export method. It also forms the basis of the announced business plan of CF Industries, which has major facilities in Medicine Hat and Ontario.
In total the program could cost $5.6 billion over five years starting this year.
The “Inflation Reduction Act” passed last fall as landmark legislation of U.S. President Joe Biden, provides a total of $3.5 billion in tax credits, known as the 45Q credit, from carbon capture hubs. It would pay out at a rate of $85 per ton of sequestered CO2.