Thank you for the question.
That is a fundamentally important question. In Canada, we tend to favour investment tax credits as opposed to production tax credits, and the United States is using both. More recently in the IRA, they have expanded significantly on their production tax credits. They had that in their system already before now. The investment tax credits basically support capital investment up front, so it has, in a way, the advantage when it comes to securing financing to be able to count on that up front, while production tax credits basically support opex—operating expenses.
It's going to vary depending on the project as to which one is preferred. In a way, I think it's back to the relationship between initial capital spending and opex. In the United States, production tax credits would last between 10 and 12 years depending on the credit, which also means that if you do a major investment up front you can count on that for maybe 10 years, but after that it's done. That's another way to look at this. If you have a major infrastructure project that is very costly, sometimes you may prefer the investment tax credits up front, because you get it up front and you get it for the effectively the whole life of the project, and often it easily goes up to 20 years.
It's a question of choice and a question of the predisposition. In a way, the systems in Canada and the United States are also very different. In Canada, we do have a national carbon pricing regime. In the United States, they don't, and that is kind of factored into the idea of how you want to support things. In a way, being able to sell your carbon credits is a way to bank that in addition to the investment tax credits.
That's the context and comparison.