Support journalism that lights the way through the climate crisis by June 3

Goal: $100k
$44,301

Unions are welcoming the federal government’s stipulation that companies must meet certain labour requirements to take full advantage of clean energy tax credits proposed in Budget 2023, but there’s still work to be done.

“Canada’s unions applaud the government’s investment in sustainable jobs and training, which will benefit workers as our economy shifts to address the climate crisis,” said Bea Bruske, president of the Canadian Labour Congress, shortly after Budget 2023 was tabled on March 28. “The government's move to attach strings to tax credits to ensure that investments in clean energy create good jobs is positive.”

The clean electricity tax credit will cover up to 15 per cent of eligible investments in transmission equipment, batteries and hydroelectric storage, and electricity generation like wind, solar, hydro, nuclear, natural gas with carbon capture (CCUS) technology and more. If certain labour conditions aren’t satisfied, the credit rate will drop 10 percentage points.

The federal budget lists ensuring wages are “at the prevailing level” — meaning aligned with what unionized workers in that industry and region make — and that apprenticeship training opportunities are being created as the two requirements to receive the full tax credit.

At least 10 per cent of the total labour hours worked on a subsidized project must be apprenticeship hours, according to Budget 2023. Trades apprentices have to accumulate work hours to progress through their levels of schooling and eventually get their national certification. This requirement will create opportunities for them to do so, said Bruske.

The prevailing wage piece is “critically important” to the Canadian Labour Congress and something Canadian unions lobbied tirelessly for, Bruske told Canada’s National Observer in an interview. It means “employers who want to take advantage of those tax deductions need to pay a wage that is in line with what the multi-employer collective agreements in the region and for that sector pay, taking into account the cost of benefits, as well as pension plans,” she said.

Prevailing wages and apprenticeship hours requirements will apply to the clean electricity investment tax credit and the clean hydrogen investment tax credit, which supports clean hydrogen production based on the life cycle carbon intensity of hydrogen — hydrogen made using CCUS receives less than hydrogen produced with renewables. The Investment Tax Credit for Clean Technology Manufacturing is not subject to any labour conditions. It supports critical mineral mining and processing, zero-emission vehicle manufacturing, creation of nuclear energy equipment and battery production.

Unifor will continue to work with the government and demand it applies the prevailing wage requirement to manufacturing and production jobs, too, Unifor national president Lana Payne told Canada’s National Observer in an interview.

The CLC and Unifor both want jobs in the low-carbon economy, but especially those created thanks to public subsidies, to be unionized. “We feel that being able to sit down and negotiate a collective agreement paves the pathway to a better future, to a middle-class lifestyle,” said Bruske.

Unions were successful in tying labour conditions to some climate measures in #Budget2023, but Unifor says it will push the feds to require employers to remain neutral if their workplaces decide to unionize to benefit from hefty tax credits.

Requiring employers to commit to staying neutral if workers choose to unionize is another key area Unifor will push on, according to Payne.

“That means no intimidation, no harassment, no threats, no anti-union campaigns … so workers have a chance to unionize in a fair environment,” said Payne.

“There's a lot of detail to be worked out yet,” but nonetheless, the conditions are “a very important step in the right direction” to ensure businesses, employers and corporations that receive government support and investment are delivering something in return “in the form of good jobs and good wages for working people in Canada,” she said.

At the end of the day, she says working people have to see that an energy transition is going to work for them by delivering good jobs.

“All eyes are on us right now … to get this right,” said Payne.

Finance Canada will consult with unions and other stakeholders “to refine these labour requirements in the months to come,” according to the budget.

Facing an energy transition and economic slowdown, the CLC and Unifor say they are disappointed the federal government didn’t use Budget 2023 to reform and fix the employment insurance (EI) system. Both unions plan to continue pushing for this in the future.

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer