Madam Speaker, I appreciate the opportunity to take part in the debate on private member's bill, Bill C‑269. I thank the member for Calgary Centre for putting it forward. I appreciate all members' private member's bills. They are an opportunity for us to work on projects and ideas and bring things forward. I appreciate the hard work that goes into that.
As we know, the bill proposes a set of amendments to the Income Tax Act to establish a new, permanent 30% non‑refundable investment tax credit for certain heat recovery equipment, which would be available as of January 1, 2026. In short, the intent of the bill is to support the adoption of certain heat recovery equipment, including waste heat-to-power technology.
I should make it clear from the outset that this is an objective that our government considers very worthy. For example, waste heat-to-power technologies capture heat that is typically lost during industrial processes and converts it into electricity. Common applications include energy‑intensive industries such as oil and gas refineries, steel mills, cement kilns and many others. By utilizing energy that would otherwise be wasted, this process can improve energy efficiency while also helping to reduce greenhouse gas emissions.
Improving energy efficiency and reducing greenhouse gas emissions are, indeed, the sorts of objectives our government supports, and these are the sorts of technologies we would like to see adopted to help achieve these objectives. That is why we already have measures in place to support the adoption of energy‑efficient technologies, which are helping us meet our goals of improving energy efficiency and reducing greenhouse gas emissions.
Let me clarify. With budget 2025's productivity superdeduction, for example, we have reinstated the accelerated investment incentive, as well as immediate expensing for manufacturing or processing machinery and equipment for clean energy generation, energy conservation equipment and zero‑emission vehicles. The productivity superdeduction also provides for immediate expensing for productivity‑enhancing assets and capital expenditures for scientific research and experimental development. It introduces immediate expensing for manufacturing or processing buildings and it includes the reinstatement of the accelerated capital cost allowances for liquefied natural gas facilities, but only for those that are low‑carbon liquefied natural gas.
Together, these measures that form the productivity superdeduction would lower costs, spur investment and reduce Canada's marginal effective tax rate to 13%, reinforcing Canada as the most tax‑competitive country for new business investment in the G7 and supporting the adoption of cleaner and more efficient technologies.
I would add that we see numbers going up for investments in this area. Business investment has gone up by over 10% for new machinery and equipment. It has also gone up about 13% in IP protection, which is also included in the immediate expensing measures we put in budget 2025. These measures are already starting to take some effect in the economy, and we are seeing business investment where we have not seen it in past years.
Of course, a cornerstone of our new economic plan is an exceptional and unprecedented suite of clean economy investment tax credits, which will help attract investment from here in Canada and from around the world through tens of billions of dollars in incentives. These clean economy investment tax credits are providing businesses and other investors with the certainty they need to invest and build in Canada. They are already attracting major job‑creating projects, ensuring that we remain globally competitive, from new carbon capture projects that will decarbonize heavy industry to new clean electricity projects that will provide clean and affordable energy to Canadian homes and businesses. These new clean economy ITCs would put Canada on track to achieve a net‑zero economy by 2050.
I appreciate that one of the intentions of this private member's bill, Bill C‑269, is to address a perceived gap in the design of those clean economy investment tax credits. However, as I have already noted, certain energy-efficient equipment generally already benefit from the immediate expensing measures that are part of the productivity superdeduction. Therefore, Bill C‑269 is aimed at a target that is already being hit by some of these other measures.
Moreover, in the way the bill is currently structured, it would hit more than just the intended target. That is because the eligibility under the proposed tax credit is defined very broadly and could include not only waste heat‑to‑power technology, but also a much wider range of equipment used in industrial heat recovery and energy generation processes. While a narrowly focused tax credit for waste heat‑to‑power technology could cost roughly $70 million per year ongoing, the proposed tax credit would be available to other types of heat recovery and energy generation equipment, and its fiscal impact is expected to be significantly higher. Opening the door to energy‑efficient technology could create a significant new precedent in this regard.
The proposed new tax credit in the bill also has several inconsistent features that would introduce significant new policy precedents and irregularities into the investment tax credit regime. The proposed tax credit would be permanent, for example, while existing clean economy investment tax credits are time‑limited to encourage investment in the short and medium term. The proposed credit also lacks certain integrity rules that apply to many of the other clean economy ITCs. For example, eligible capital costs under the proposed credit would be reduced by other government assistance received or unpaid amounts, as is generally the case with the clean economy investment tax credits. It is also the case that Bill C‑269 proposes a non‑refundable tax credit, while all of the other ITCs are refundable, which is another inconsistency that I would point out. This would result in the lack of a tax refund and it would be used only to deduct from taxes owed, which is a significant inconsistency with the other ITCs that we have offered.
These are all important facts that should be taken into account when considering Bill C‑269. Having done so, our government cannot support the bill in its currently structured form. Changes to tax laws are ideally considered as part of the budget process so that all relevant facts can be taken into consideration. The budget process also ensures due consideration of the potential fiscal costs of proposed tax measures to ensure that they are consistent with the fiscal framework and overall coherence of the tax system.
I believe we have a responsibility, as parliamentarians, to maintain these standards outside of the budget process. I also believe Bill C‑269 does not meet these standards for the reasons I have outlined today. While the bill is laudable in its intent, and I give the member opposite credit for including the technology he is proposing to support, which I believe in, I believe it is duplicative in that there are existing tax supports for investments in certain heat recovery equipment, it is not appropriately targeted and it may have costly, unfair and unintended consequences.
To conclude, I would accordingly urge that Bill C‑269, unfortunately, not be given the support of the House. I appreciate the opportunity to make this case today.