Thank you, Chair. It's an honour to once again be invited to present.
I'm here to comment on the financial realities of deploying carbon capture and storage technologies in Canada. Deployment at scale requires certainty on the value of carbon.
I'd like to make three points.
First, the combined Canadian investment tax credit and carbon price framework need to be competitive with the section 45Q tax credit in the United States. Capital has a choice to make, and it can go to the United States. The recently passed Inflation Reduction Act in the United States significantly upgrades the 45Q tax credit.
Second, certainty on the value of carbon is critical in any company's evaluation of risk, which in turn drives the cost of capital. With carbon capture, a lower cost of capital, as in the utility industry, means more tonnes are captured and sequestered per dollar invested.
Third, the market is unable to underwrite political risk. That is a general proposition, so the risk that the government will change the carbon price in the future away from the scheduled increase of $170 a tonne is a risk that the market is unable to underwrite.
Those are my opening remarks as to the importance of certainty on carbon prices.