Discussion · Private Members' Business
Annie Koutrakis Liberal
“I oppose this bill. Heat recovery technology is good, but this tax credit is too broad and will cost taxpayers far too much money. It is also permanent and duplicates tax breaks that we already give businesses for clean energy.”
“Mr. Speaker, I am pleased to rise today to speak to Bill C-269, which seeks to amend the Income Tax Act. The member for Calgary Centre’s bill seeks to create an investment tax credit for certain heat recovery equipment. The bill’s objective is laudable, as heat recovery technologies can help businesses recover the thermal energy generated by their operations and use it productively, rather than letting it go to waste. Some technologies make it possible to use waste heat to generate electricity, improving energy efficiency while also helping to reduce greenhouse gas emissions. This raises two questions. The first is this: Should we encourage the development and use of such technology? The answer is yes, and that is already happening. The current tax system already provides support for investments in this type of technology. The real question, then, is this: Is the tax credit proposed by the member the right tool for the job? In this case, the answer is no. When we look at the bill as a whole, it is clear that it has some fairly major problems. First of all, the bill is much broader than it seems at first. It is presented as a way to support technologies that produce electricity using waste heat, yet the text of the bill goes much further. The definition of qualifying equipment is quite broad, such that the tax credit would apply to several different types of equipment used in industrial heat recovery and energy generation. This is an important distinction. When we create a tax incentive, it is important to know exactly what we are trying to encourage, because that will dictate what activities will qualify for the tax credit and how much it will cost taxpayers. In the case of Bill C‑269, the stated objective and the means proposed to achieve it are not perfectly aligned. This would have significant fiscal implications. According to the Department of Finance’s analysis, a narrowly focused tax credit for waste heat‑to‑power technology could cost roughly $70 million per year. However, Bill C‑269 goes much further. It could apply to a broad range of equipment used in industrial heat recovery and energy generation processes. As a result, its cost would be considerably higher. That is one concern, but it is not the only one. The tax credit proposed in Bill C‑269 would be permanent, unlike the clean economy investment tax credits that are currently available. Those credits are time-limited to encourage investment in the short and medium terms. A permanent tax credit does not create the same incentive for businesses to invest quickly. In addition, certain integrity rules that apply to many of the existing tax credits were not included in Bill C‑269. For example, the bill does not provide for eligible capital costs to be reduced by other government assistance received. In short, Bill C‑269 does not achieve its apparent objective, which is to specifically support waste heat-to-power equipment. The eligibility is defined too broadly and could include a wide range of equipment, at a high cost to taxpayers. We also need to take into account the tax measures that already exist. There are already tax incentives for waste heat-to-power equipment. For example, the productivity superdeduction announced in budget 2025 reinstated immediate expensing of clean energy generation and energy conservation equipment. In practical terms, this measure allows businesses to immediately write off the cost of certain eligible investments rather than having to deduct it over several years. We have gone even further. In September, the government announced the new productivity mega deduction. Building on the superdeduction, this measure will allow businesses to immediately write off the cost of a much broader range of investments. These measures are already helping to drive investment in new equipment and accelerate the adoption of cleaner, more efficient technologies. Bill C-269 proposes a new incentive in an area that already benefits from substantial tax support. As currently drafted, the bill could provide an additional tax benefit for investments that already receive preferential treatment. Before introducing a new permanent 30% tax credit, we should consider whether it genuinely addresses a need that is not already covered or whether it would simply duplicate existing measures. Significant changes to the tax system should normally be considered as part of the budgetary process. Tax credits cannot be assessed in isolation. We must examine their cost, evaluate whether they are likely to achieve their intended objectives and, above all, consider how they interact with existing tax measures. Bill C‑269 is a good example. As I just explained, some of the investments that the bill seeks to encourage already qualify for tax incentives. The budgetary process provides a way to assess the impact of this kind of situation. It allows us to more effectively examine different measures, compare their costs, analyze their benefits and, ultimately, determine whether a proposal is both necessary and advisable. An exhaustive examination also makes it possible to study how a proposed measure will affect public finances. Simply put, we cannot support the bill as drafted. Waste heat to power is a good environmental policy, but Bill C‑269 is not the right way to encourage it. The government agrees with the bill’s underlying objective. We want to encourage Canadian companies to invest in cleaner, more efficient and more productive technologies. To do that, however, we have to choose the right tools. The tax credit proposed in Bill C‑269 is overly broad. It has significant design shortfalls, and it would be permanent. It would duplicate tax measures that already support such investments. The bill’s intentions are good, but a sound fiscal policy requires more than good intentions. A fiscal policy has to be carefully crafted. The measures it introduces have to be well targeted. They have to fit cohesively with existing measures and be implemented in a way that uses public funds responsibly. For these reasons, we cannot support the bill.”
Mr. Speaker, I am pleased to rise today to speak to Bill C-269, which seeks to amend the Income Tax Act. The member for Calgary Centre’s bill seeks to create an investment tax credit for certain heat recovery equipment. The bill’s objective is laudable, as heat recovery technologies can help businesses recover the thermal energy generated by their operations and use it productively, rather than letting it go to waste. Some technologies make it possible to use waste heat to generate electricity, improving energy efficiency while also helping to reduce greenhouse gas emissions. This raises two questions. The first is this: Should we encourage the development and use of such technology? The answer is yes, and that is already happening. The current tax system already provides support for investments in this type of technology. The real question, then, is this: Is the tax credit proposed by the member the right tool for the job? In this case, the answer is no. When we look at the bill as a whole, it is clear that it has some fairly major problems. First of all, the bill is much broader than it seems at first. It is presented as a way to support technologies that produce electricity using waste heat, yet the text of the bill goes much further. The definition of qualifying equipment is quite broad, such that the tax credit would apply to several different types of equipment used in industrial heat recovery and energy generation. This is an important distinction. When we create a tax incentive, it is important to know exactly what we are trying to encourage, because that will dictate what activities will qualify for the tax credit and how much it will cost taxpayers. In the case of Bill C‑269, the stated objective and the means proposed to achieve it are not perfectly aligned. This would have significant fiscal implications. According to the Department of Finance’s analysis, a narrowly focused tax credit for waste heat‑to‑power technology could cost roughly $70 million per year. However, Bill C‑269 goes much further. It could apply to a broad range of equipment used in industrial heat recovery and energy generation processes. As a result, its cost would be considerably higher. That is one concern, but it is not the only one. The tax credit proposed in Bill C‑269 would be permanent, unlike the clean economy investment tax credits that are currently available. Those credits are time-limited to encourage investment in the short and medium terms. A permanent tax credit does not create the same incentive for businesses to invest quickly. In addition, certain integrity rules that apply to many of the existing tax credits were not included in Bill C‑269. For example, the bill does not provide for eligible capital costs to be reduced by other government assistance received. In short, Bill C‑269 does not achieve its apparent objective, which is to specifically support waste heat-to-power equipment. The eligibility is defined too broadly and could include a wide range of equipment, at a high cost to taxpayers. We also need to take into account the tax measures that already exist. There are already tax incentives for waste heat-to-power equipment. For example, the productivity superdeduction announced in budget 2025 reinstated immediate expensing of clean energy generation and energy conservation equipment. In practical terms, this measure allows businesses to immediately write off the cost of certain eligible investments rather than having to deduct it over several years. We have gone even further. In September, the government announced the new productivity mega deduction. Building on the superdeduction, this measure will allow businesses to immediately write off the cost of a much broader range of investments. These measures are already helping to drive investment in new equipment and accelerate the adoption of cleaner, more efficient technologies. Bill C-269 proposes a new incentive in an area that already benefits from substantial tax support. As currently drafted, the bill could provide an additional tax benefit for investments that already receive preferential treatment. Before introducing a new permanent 30% tax credit, we should consider whether it genuinely addresses a need that is not already covered or whether it would simply duplicate existing measures. Significant changes to the tax system should normally be considered as part of the budgetary process. Tax credits cannot be assessed in isolation. We must examine their cost, evaluate whether they are likely to achieve their intended objectives and, above all, consider how they interact with existing tax measures. Bill C‑269 is a good example. As I just explained, some of the investments that the bill seeks to encourage already qualify for tax incentives. The budgetary process provides a way to assess the impact of this kind of situation. It allows us to more effectively examine different measures, compare their costs, analyze their benefits and, ultimately, determine whether a proposal is both necessary and advisable. An exhaustive examination also makes it possible to study how a proposed measure will affect public finances. Simply put, we cannot support the bill as drafted. Waste heat to power is a good environmental policy, but Bill C‑269 is not the right way to encourage it. The government agrees with the bill’s underlying objective. We want to encourage Canadian companies to invest in cleaner, more efficient and more productive technologies. To do that, however, we have to choose the right tools. The tax credit proposed in Bill C‑269 is overly broad. It has significant design shortfalls, and it would be permanent. It would duplicate tax measures that already support such investments. The bill’s intentions are good, but a sound fiscal policy requires more than good intentions. A fiscal policy has to be carefully crafted. The measures it introduces have to be well targeted. They have to fit cohesively with existing measures and be implemented in a way that uses public funds responsibly. For these reasons, we cannot support the bill.