Madam Speaker, I am pleased to rise today to take part in the debate on a private member's bill, Bill C-262. I would like to make to clear from the outset that our government fully recognizes the importance of deepening and accelerating the actions needed to fight climate change.
In this regard, we appreciate the intent of the proposed legislation that is the subject of our debate today. By capturing carbon dioxide emissions from large industrial facilities before they are released into the atmosphere, carbon capture, use and storage technologies will play an important role in helping Canada exceed its 2030 Paris Agreement emissions reductions target. They have the potential to significantly reduce emissions from heavy industrial processes where other emission-reducing alternatives may be limited.
That is why, as part of the strengthened climate plan we announced in December, our government is proposing to develop a comprehensive CCUS strategy and explore other opportunities to help keep Canada globally competitive in this growing industry. It is important that we do so in a way that is fair for all Canadians, takes into account the views of stakeholders and is effective in achieving its objectives. It is here, in this regard, that Bill C-262 falls short. As the saying goes, the devil is in the details. I would like to take a moment to consider some of the troublesome details apparent in this bill.
The tax credit proposed in Bill C-262 would be equal to the amount of captured carbon dioxide or carbon monoxide emissions in tonnes, multiplied by the price of the excess emissions charged for a carbon dioxide equivalent under Canada's output-based pricing system. As we know, the OBPS is part of Canada's carbon pricing framework that applies to industrial emitters, with charges set at $40 per CO2 equivalent tonne in 2021 and $50 per CO2 equivalent tonne in 2022.
Unlike the carbon capture tax credits in the United States, Bill C-262 would not impose time limits on the availability of the tax credit. What does this mean? It means that, because the value of the proposed tax credit is linked to excessive emission targets, its value could increase significantly if the OBPS excess emissions charge under the Greenhouse Gas Pollution Pricing Act were to increase as anticipated under our proposed plan to strengthen Canada's carbon pricing framework beyond 2022.
If the excess emissions charge were to increase by $15 annually from $50 per tonne in 2022 to $170 per tonne in 2030, this would lead to a situation where the government is very heavily subsidizing, or even more than fully subsidizing, certain projects that employ CCUS. This is the point at which incentives, if not properly designed, can become perverse and encourage an unproductive gaming of the system by businesses at the taxpayers' expense.
The bill also appears to be open to accommodating the international trade of physical CO2, as it refers not only to Canadian federal and provincial laws in this respect, but also to U.S. laws. This suggests the measure would allow for the import into Canada of physical CO2 for storage or use in Canada without requiring the capture of that CO2 to have been in Canada. This would clearly undermine the credit's ability to meet our government's objective of reducing Canadian emissions.
Bill C-262 also proposes that multiple types of use would be eligible for the tax credit, including storage through conversion, and use for any other purpose for which a commercial market exists. It is not clear how the use of CO2 for any proposed commercial purpose would reduce Canadian emissions. In fact, some commercial uses could result in CO2 being reintroduced into the atmosphere. What is more, the bill's definitions of “utilization” and “qualifying corporation” suggest the credit would be accessible to all existing and operating facilities, and not just those that are developing and expanding their CCUS capacities.
By providing a windfall for existing operations, which may have already received significant federal and provincial support, the bill does not fully leverage our capacity to encourage the adoption of these technologies to meet our CO2 reduction goals.
As I said, while the bill is commemorable in its objectives, it is severely flawed in its execution. It is in this regard that our government can offer a better way forward. Canada's strengthened climate plan, a healthy environment and healthy economy, proposes measures to cut energy waste, provide clean and affordable transportation to power, build Canada's clean industrial advantage and support nature-based climate solutions.
It also proposes to put a price on pollution through to 2030. The plan is supported by an initial $15-billion investment, which will create jobs, grow the middle class and support workers in a stronger and cleaner economy. This is in addition to the Canada Infrastructure Bank's $6 billion for clean infrastructure that was announced in the fall.
Under our plan, CCUS projects would benefit from credits that are generated under carbon pricing regimes and the clean fuel standard if projects reduce the carbon intensity for fuel suppliers. The plan also provides direct support that may be available for CCUS investments through the new net-zero accelerator, which will provide $3 billion over five years via the strategic innovation fund. The fund is expected to face high demand as it aims to rapidly expedite decarbonization projects with large emitters, scale up clean technology, and accelerate Canada's industrial transformation across all sectors.
Certain projects could also be complemented by funding under the $1.5 billion low-carbon and zero emissions fuels fund to increase the production in use of low-carbon fuels. As well investments by Sustainable Development Technology Canada will support advancement of pre-commercial clean technologies.
In conclusion, it is important that governments continue to work with stakeholders to determine the best approach to leveraging CCUS technology in Canada. It is also important that these efforts are advanced through the budget process, which enables the government to fully consider trade-offs, balance priorities and undertake new fiscal commitments only to the extent that they are effective, fair and affordable, and when no better alternative is identified.
As I have made clear today, it is precisely in these regards that Bill C-262 falls short. That is why the government cannot support it.