Montreal, August 3, 2023 — Propulsion Québec, the industrial cluster for electric and intelligent transportation (EIT), today submits its priorities in anticipation of the 2024 budget as part of the federal pre-budget consultation. The global race to attract champions in the electrification sector has begun; Canada must play its cards right thanks to its many strengths. Quebec companies are already hard at work developing technologies, accelerating the transition to electromobility and smart mobility, and transforming critical and strategic minerals. We recommend that the Government of Canada implement an industrial policy for the EIT sector by targeting niches with high commercial potential and deploying financial support aimed at companies.
"Some of our international partners, such as Europe and the United States, have adopted industrial policies that offer notable advantages to companies. To ensure the competitiveness of the domestic industry and to be in sync with its peers, the government would benefit from putting in place an industrial policy for the EIT sector. Creating such an industrial strategy for the sector would allow our territory to be more proactive in achieving its climate objectives and would respond to the urgent pressures of global competition in this new carbon-neutral economy," says Sarah Houde, President and CEO of Propulsion Québec.
Improve access to capital
The United States' Inflation Reduction Act (IRA) has significantly increased the financing available to companies in the manufacturing of electric vehicles and their components, charging systems, and the extraction and processing of critical and strategic minerals. Access to capital for Canadian companies is becoming essential to ensure their competitiveness.
Propulsion Québec therefore recommends the following measures:
- Reduce the burden on entrepreneurs by having the ability to guarantee certain investments.
- Accelerate the deployment of capital from the various programs dedicated to commercialization, including the TDDC and the FSI.
- Offer increased support for CAPEX investments.
- Experiment with new financing formulas other than the 80/20.
- Increase funding for companies at the startup and growth stages.
- Support and promote the circularity of critical and strategic minerals.
Furthermore, the Government of Canada must quickly put in place the refundable tax credits for EV manufacturing, manufacturing of charging systems, the manufacture or processing of critical minerals, and for investments in clean technologies that were announced in the last budget. Access to financing through the various existing programs must also be accelerated.
The importance of maintaining incentives for the transition to transportation electrification
The various incentive programs for electrification will expire soon. To ensure better predictability for companies that wish to plan their investments over the coming years, we consider it essential to extend them. This is notably the case for the following programs, which have an important impact on the energy transition and on improving the energy performance of the transportation sector:
- The Incentives Program for Zero-Emission Medium and Heavy Vehicles (iVMLZE)
- The Zero-Emission Vehicle Infrastructure Program (PIVEZ).
- The Energy-Efficient Freight Transport Program.
- The Incentives Program for the Purchase of Zero-Emission Vehicles (iVZE).
- The Zero-Emission Public Transit Fund.
