Thursday, January 29, 2009

Ottawa to spend $1 billion on green infrastructure

There wasn’t much in Budget 2009 for social investors, or for investors of any stripe, for that matter. However, among the plethora of new spending proposed in this year’s budget is a $1 billion Green Infrastructure Fund. Ottawa says green investing can improve the quality of the environment and lead to a more sustainable economy. The new fund, to be allocated over the next five years, will focus on infrastructure that supports the creation of sustainable energy, such as modern transmission lines, which the government says will contribute to improved air quality and lower carbon emissions.

The fund includes $150 million for research and $850 million for the “development and demonstration of promising technologies, including large scale carbon capture and storage projects.” Funding for the new projects will be allocated based on merit to support green infrastructure projects on a cost-shared basis. Ottawa hopes to generate a total investment in clean technologies of at least $2.5 billion over the next five years.

The government says it also plans to consult with stakeholders to identify specific carbon capture and storage projects with a view to providing accelerated capital cost allowance deductions to promote such investments.

Advancing the timing of capital cost deductions for tax purposes defers taxation and improves the financial return from investments in particular assets, the budget documents note.

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