Alberta premier says province open to providing carbon capture tax credits
(Reuters) - Canada's main oil-producing province Alberta is open to bolstering tax credits for carbon capture and storage (CCS) technology but also wants the federal government to increase financial support, Premier Danielle Smith said this week.
Carbon capture and storage is seen as a key plank in global efforts to fight climate change by cutting emissions, and last April Ottawa unveiled tax credits designed to spur investment in the costly technology.
However, Canada's oil industry says it needs more government help to scale up the nascent industry, especially after the United States passed the Inflation Reduction Act (IRA) last year, which included massive tax credits to CCS there.
Ottawa, in turn, has said Alberta should contribute more. Last week Liberal Prime Minister Justin Trudeau urged the province to use its budget surplus to boost the tax credits.
Smith, who is a fierce critic of Trudeau and became premier last October with promises that her government would stand up to Ottawa, told a news conference Alberta was open to "collaboratively" investing in CCS with the federal government.
"We are working towards the same goal...then we can figure out what portion comes from federal tax relief and what portion comes from provincial tax relief," Smith said.
"It really is up to the federal government to come to the table with something more significant," she added.
Smith said the IRA in the United States had "changed the calculus" for a lot of companies, and Alberta needed to ensure it could compete to attract investment.
She pointed to the Alberta Petrochemicals Incentive Program, which provides companies with grants worth 12% of a project's capital costs, as a successful model for spurring investment.
"The question would be, can we expand that to include more types of projects?" Smith said.
(Reporting by Nia Williams Editing by Marguerita Choy)