Thank you very much, Madam Chair and members of the committee. Thank you for the opportunity to address the committee on the potential trade impacts of the United States Inflation Reduction Act on workers in Canada.
My name is Sean Strickland and I'm the executive director of Canada's Building Trades Unions, part of North America's Building Trades Unions. We represent 14 international construction unions, with offices in Washington, D.C. and Ottawa. The combined membership of NABTU and CBTU includes over three million unionized construction workers, of which 600,000 are in Canada.
The international unions that make up the building trades have a long history of working closely on issues that affect members on both sides of the border. In partnership with our employers, we operate over 1,900 apprenticeship programs and annually invest almost $2 billion in training programs, producing the best, safest and most highly trained skilled trades workers anywhere in the world. We advocate for good union jobs that pay family-sustaining wages and offer benefits and a pension to ensure that folks can retire in dignity.
As you know, the recently passed Inflation Reduction Act includes over $300 billion in energy tax incentives for clean energy infrastructure. This is an international game-changer that incentivizes businesses to create union jobs and to hire apprentices, because it offers expanded tax credits. Up until the IRA was passed, Canada was leading the charge on the transition to net zero using existing subsidies for carbon to make investments and technological advancements in renewables, but with the passing of the IRA, the U.S. is clearly in the driver's seat. What happens next will set up the Canadian economy for the next several decades, which is why we need to respond vigorously, intelligently and quickly.
I am very much aware that the department has briefed you very thoroughly on all of the elements contained within the IRA, things like the nuclear power credit, for example. The credits are increased to five times as much if the taxpayer meets prevailing wage requirements. In the case of the clean electricity investment credit, it is also increased to five times as much if prevailing wage and apprenticeship requirements are met. The hydrogen production credit will be increased 500% if certain prevailing wage, apprenticeship and other requirements are satisfied. The same is true for the energy-efficient commercial buildings deduction and the carbon capture and sequestration credit.
On the electric vehicle front, you will hear from some of the witnesses today on the changes there and on how those may impact the production of Canadian electric vehicles.
The Inflation Reduction Act also establishes “make it in America” provisions for the use of American-made equipment for clean energy production, something we have to pay close attention to.
What the U.S. has effectively done is to position itself to be a very attractive market for investments in clean energy infrastructure. Incentives make it attractive to private equity while at the same time improving the lives of American citizens by ensuring that union wages are being paid and that more people have opportunities to start an apprenticeship in the skilled trades.
It's the view of the Canada's Building Trades Unions that we need to look very closely at these incentives and respond in kind, but respond in ways that are smart and recognize our competitive advantage. I think it would be very difficult for us to respond line by line to all of the incentives contained in the Inflation Reduction Act, but are there areas in which we can exercise and amplify our competitive advantage—in mining, for example, or hydrogen production or carbon sequestration, which is already happening? There are lots of examples of where we already have a competitive advantage. Small modular reactors and lots of projects are in development in Canada right now. How do we use incentives and create a regime in which we can compete and respond to the Inflation Reduction Act but respond smartly?
As my colleague here said earlier, it's not a race to the bottom, so we need to be smart about it and also exercise the competitive advantage we have in our labour force. We have good skilled trades workers right across Canada. We need to continue investing in recruiting and training. We also need to attract more people to the skilled trades in Canada. Making changes to the immigration streams and easing cross-border mobility, for example, are some ways in which we can respond to the increased demand for trades right across the country.
One of the biggest challenges we're going to have as we go through just transition is that, according to some reports, Canada could lose up to 450,000 jobs in the oil and gas sector between now and 2050, so how are we going to replace those jobs with the new energy jobs of the future? This is a very important question, and how we respond to the Inflation Reduction Act is a big part of the answer to that question. We have to make sure we don't leave any workers behind, so when we transition out of oil and gas, we need to replace the jobs of those workers with good, union-paying jobs in the new energy sources of the future—hydrogen, carbon sequestration, small modular reactors, traditional nuclear, etc.
Also, if we're going to offer attractive incentives so that the private sector remains competitive on this front, Canadians should expect that these generous subsidies are tied to the creation of good middle-class jobs to provide family-sustaining wages, health and welfare benefits and pensions. The amounts of tax incentives and credits that we are considering in response to the Inflation Reduction Act are in the tens of billions of dollars. I think the Canadian public would expect—and I would hope that parliamentarians would expect—that any of those kinds of incentives would be tied to the creation of good, sustaining jobs.
On behalf of the over three million skilled trades professionals who belong to North America's Building Trades Unions, and our 14 affiliated international unions and the 60 trades we represent, I want to thank the committee for this opportunity to present. I look forward to any questions you may have.
Thank you, Madam Chair.