Recent Win

Big win for working Albertans: Federal budget includes labour conditions on tax credits

Carbon Capture tax credits include requirements for fair wages, training

EDMONTON – The federal budget’s Carbon Capture (CCUS) investment tax credit plan will create thousands of high-paying jobs for Albertans and help lay the foundation for sustained prosperity in our province, says Alberta Federation of Labour president Gil McGowan. The plan includes labour conditions that ensure the that the full benefit of the tax credit will only flow to employers who commit to training apprentices and paying “prevailing wages,” calculated, in part, by looking at union wages and benefits in the sector.

“At the urging of unions and labour groups like the AFL, the federal government had already attached labour conditions to investment tax credits for clean tech and hydrogen projects. Now they’re doing the same with the new investment tax credit for CCUS,” says McGowan. “This has never been done before by any Canadian government and it will not only ensure that these important projects get built; it will also ensure that the jobs created will be good jobs.”

“This is a win-win-win scenario. The public will get projects that diversify our economy and build the infrastructure for a clean future. Investors and companies will get the support and certainty they need to make investment decisions. And workers will get thousands of good jobs that won’t be undercut by low-ball contractors.”

McGowan thanked Finance Minister Chrystia Freeland, Labour Minister Seamus O’Regan and Natural Resources Minister Jonathan Wilkinson for rolling up their sleeves to work closely with Alberta’s workers and unions.

“We have been saying for the past two years that the big paradigm shift happening in the global economy presents historic opportunities for investment and job creation here in Alberta – but only if we play our cards right [LINK],” says McGowan. “We have also been saying that if we don’t respond to huge investment incentives contained in the American Inflation Reduction Act, we would run the risk of being left behind. [LINK]. We’re incredibly pleased that the federal government has listened. This is a transformative budget.”

“Credit also has to be given to the federal NDP caucus and the Supply and Confidence Agreement (SACA) as they negotiated with the Liberal Caucus,” concluded McGowan. “None of the victories for working Albertans contained in this budget would be possible without this agreement and the hard work done by both partners in this minority government. This is an example of how government should work, by putting the public interest first.”

Relevant text from the Budget document is attached as background.

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John Ashton
Director of Communications, AFL
Phone: (780) 913-6518


From the Budget document [LINK]:

Fair Pay for Workers Who Build the Clean Economy

“When the federal government provides support for businesses to grow, their workers must also see the benefit. For the first time in Canadian history, the 2022 Fall Economic Statement announced that labour requirements would be attached to investment tax credits. These tax credits, for investments in clean technology and clean hydrogen equipment, have requirements that include paying prevailing wages and ensuring that apprenticeship opportunities are being created.

Following consultations with unions and other stakeholders, Budget 2023 is announcing additional details on the labour requirements for the Clean Technology and Clean Hydrogen Investment Tax Credits.

To be eligible for the highest tax credit rates, businesses must pay a total compensation package that equates to the prevailing wage.

The definition of prevailing wage would be based on union compensation, including benefits and pension contributions from the most recent, widely applicable multi-employer collective bargaining agreement, or corresponding project labour agreements, in the jurisdiction within which relevant labour is employed.

Additionally, at least ten per cent of the tradesperson hours worked must be performed by registered apprentices in the Red Seal trades. The government also intends to apply labour requirements related to the prevailing wage and hours worked by registered apprentices to the Investment Tax Credit for Carbon Capture, Utilization, and Storage, and the Investment Tax Credit for Clean Electricity. Further details will be provided at a later date.

In all cases, the requirements would apply to labour that is performed on or after October 1, 2023”