Canada’s federal budget released on Tuesday includes a tax break hoping to entice automakers to build electric vehicle (EV) factories in the country.
According to Bloomberg, the incentive offers a 10 percent tax credit on the capital cost of buildings used for EV manufacturing. However, the government also wants companies to “choose Canada for more than one stage in the manufacturing process.”
The new tax credit can stack with a 30 percent tax credit for the equipment costs of EV manufacturers, which was announced last year. The government projects the credit will cost $1 billion CAD by 2035.
Bloomberg notes the new incentive is a shift for the Canadian government, which is trying to keep pace with the U.S. Last year, Canada also gave huge production-subsidy packages to Volkswagen, Stellantis and Northvolt to build battery assembly plants.
However, it seems the government is done with those packages and hopes the tax credits will be a sufficient incentive. Honda, for example, is looking at a multi-billion dollar EV project, but the feds haven’t offered a production subsidy deal, unnamed sources told Bloomberg.
Along with the EV tax incentive, the budget includes other programs intended to boost investment in energy and natural resources projects.
Image credit: Shutterstock
Source: Bloomberg
MobileSyrup may earn a commission from purchases made via our links, which helps fund the journalism we provide free on our website. These links do not influence our editorial content. Support us here.
