Government delays on CCUS Investment Tax Credit hurts the environment and Canadian business

In a letter to the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, Greg McLean stresses that ongoing delays in adopting an Investment Tax Credit for Carbon Capture, Utilization and Storage (CCUS) by the Government hurts the environment and drives investment away.

Canada was a leader in the development of CCUS technologies but has lost this position to the United States in recent years. McLean urges the government to commit to CCUS tax credit that will re-take Canada's leadership on the advancement of this GHG abatement technology.

In the last Parliament, McLean introduced a Bill C-262 An Act to amend the Income Tax Act (capture and utilization or storage of greenhouse gases) to address the gap between Canada and the United States in respect to the way investment in CCUS are incented. The Bill was defeated at Second Reading with the Liberal Government voting against it.

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January 25, 2022


The Honourable Chrystia Freeland, P.C., M.P.
Deputy Prime Minister and Minister of Finance
House of Commons
Ottawa, ON K1A 0A6


Dear Minister:

Re: Tax Credit for Carbon Capture, Utilization and Storage

In the last Parliament, I proposed Private Members Bill C-262 An Act to amend the Income Tax Act (capture and utilization or storage of greenhouse gases) to address the gap between Canada’s taxation practice and those of our major competitor – the United States of America – with respect to the way investors in carbon capture, utilization and sequestration (CCUS) are financially incented or penalized.

The necessity of the Bill, proposing an Investment Tax Credit (ITC) to be split between the various parties involved in the complex and sometimes disconnected practice of removing produced carbon from entering the atmosphere and storing it in underground caverns or using that captured carbon for other societal objectives is evident to all ‘experts’, and I use that term correctly.

Bill C-262 was introduced over one year ago. It was defeated in the House of Commons at Second Reading in June, 2021. Note that the government and your party’s members voted against supporting a Bill that would have advanced what all ‘experts’ view as one of the world’s strongest approaches to addressing the effects of greenhouse gas production.

So, let’s accept that Canada’s approach to this environmental tool has been delayed by over a year.  If your government is serious about meeting 2030 climate goals, losing a year in bringing forth the policy and taxation framework necessary for this environmental solution is not a strong signal. That would equate to 10% of the time period – again, wasted.

I appreciate that you have since been seized with the importance of CCUS in meeting Canada’s and the world’s greenhouse gas abatement solutions, and I appreciate you turning your mind to the importance of this approach. However, I am concerned by narratives being promulgated by your colleague, the Honourable Jonathan Wilkinson, Minister of Natural Resources, who sounds quite opposed to allowing CCUS credits to be permitted for any outcome that results in enhanced oil recovery (EOR). I’ve also heard the support he’s receiving from various ‘experts’on the matter. In this instance, I will question the application of the word to these aimless lobby organizations, to whom Minister Wilkinson seems beholden. They are not experts. If you are seeking expert advice, please stick with the input you are receiving from the scientific and environmental solution providers, with whom I know you are engaged.

Good policy aims for an attainable outcome.

Canada once was a leader in the development of CCUS technologies. The past handful of years have seen us lose our position in advancing this environmental solution to the USA.  We cannot continue to fall behind, if we are going to be rewarding the technological solution providers that will help Canada lead the way on environmental solutions. To exclude any application of CCUS which will make the technology more viable and attractive elsewhere will lead to the ‘mind and management’ of those technology companies domiciling in that jurisdiction. After over a decade of leadership on this technology, and significant commitment of funds – both private and public – Canada will accept its role as a ‘branch plant’ in the technology’s application. We need to avoid this outcome and re-take our leadership role in this environmental advancement.

Virtue signalling has no real reward for this country, or for the environment. The outcome matters. It is time for your government to look at the outcomes Canada requires – environmentally and from a technology development perspective – and commit to a policy framework on the advancement of CCUS which will put us back in a leadership position in the world.

Much has been lost – time and technological advancement. I urge you to commit to a CCUS tax credit that will re-take Canada’s leadership on the advancement of this significant greenhouse gas abatement technology.

If you require further input or assistance, please do not hesitate to contact me.




Greg McLean, M.P.
Calgary Centre