GOVERNMENT OF CANADA
Deputy Prime Minister welcomes $2 billion partnership between Canada Growth Fund and Strathcona Resources to secure Canada's carbon capture leadership

On July 11, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, welcomed the announcement of the Canada Growth Fund's sixth investment.

The Canada Growth Fund and Strathcona Resources Canada's fifth-largest oil producer have agreed to invest up to $2 billion combined to build carbon capture and sequestration infrastructure on Strathcona's steam-assisted, gravity drainage oil sands facilities in Saskatchewan and Alberta. Upon completion, the partnership will capture and permanently store up to two million tonnes of carbon dioxide annually, unlocking Canada's pathway to lead the world with low-carbon resource exports.Supported by an initial $500 million investment from the Canada Growth Fund which could be upsized up to $1 billion Strathcona will begin its final detailed engineering work for the first carbon capture and sequester project, with a final investment decision expected next year. This partnership was made possible by and will benefit from the federal government's Carbon Capture, Utilization, and Storage investment tax credit, which investors are already able to claim.

The Canada Growth Fund will earn a targeted return over time with the annual cash flows generated by each carbon capture and sequestration project based on actual captured volumes, actual operating costs, and a fixed carbon price guaranteed by Strathcona.

At the heart of the federal government's economic plan is creating good-paying jobs today and for generations to come. Through the Canada Growth Fund's innovative investments in clean technology, and beyond, the government is empowering industry to decarbonize its operations and turn their ideas into success stories, helping to unlock a brighter, more prosperous future, with more good-paying jobs for Canadians.

"This $2 billion partnership between our Canada Growth Fund and Strathcona Resources is proof that our economic plan is working it is growing the economy, creating good-paying jobs, and keeping Canada on track to reach net-zero by 2050. This partnership, made possible by our Carbon Capture, Utilization, and Storage investment tax credit, will build one of the world's lowest-emission oil facilities, ensuring Canada's resource sector remains competitive for generations to come."

The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

"The decarbonization of our resource sector is an enormous economic opportunity for Canada that businesses like Strathcona Resources recognize and are rapidly moving to seize on. As the world moves towards a low-carbon future, the Investment Tax Credits are helping to keep Canada's resource sector and Canadian workers competitive. Since the tax credits were officially established just three weeks ago, we have seen companies act quickly to take advantage of them. These investments show the innovation of Canadian companies which will create jobs now and into the future."

The Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources

• The Canada Growth Fund is a $15 billion arm's length public investment vehicle launched by the federal government to attract private capital and invest in Canadian projects and businesses, which is led by Canada's world-leading public sector pension professionals.
  • The Canada Growth Fund makes strategic investments to help Canada to meet the following national economic and climate policy goals:
    • Reduce emissions and achieve Canada's climate targets;
    • Accelerate the deployment of key technologies, such as low-carbon hydrogen and carbon capture and sequestration;
    • Scale-up companies that will create jobs, drive productivity and clean growth across new and traditional sectors of Canada's industrial base;
    • Encourage the retention of intellectual property in Canada; and,
    • Capitalize on Canada's abundance of natural resources and strengthen critical supply chains to secure Canada's future economic and environmental well-being.
• As part of this partnership with Strathcona Resources, the Canada Growth Fund will initially commit $500 million in funding, with the option to upsize its commitment to $1 billion. The Canada Growth Fund and Strathcona would each fund 50 per cent of the capital costs to build the carbon capture and sequestration infrastructure on Strathcona's oil sands facilities.
  • This partnership significantly advances Canada's progress to decarbonize industry while protecting and creating good-paying jobs, as Strathcona generates production-related emissions of approximately 3 million tonnes of CO2 per annum from its seven major oil sands facilities across Saskatchewan and Alberta.
• The 2023 Fall Economic Statement announced that the Canada Growth Fund will be the principal federal entity to issue carbon contracts for difference (CCFDs), including allocating, on a priority basis, up to $7 billion of its current $15 billion in capital to issue all forms of contracts for difference and offtake agreements.
• Budget 2024 announced that the Canada Growth Fund is developing an expanded range of CCFD offerings tailored to different markets and their unique risks and opportunities. The Canada Growth Fund will continue offering bespoke CCFDs and carbon offtake agreements, with a focus on provinces contributing significantly to greenhouse gas emissions reductions.
  • Budget 2024 also announced that the Canada Growth Fund will explore ways to broaden its approach, for example, by developing off-the-shelf contracts for certain jurisdictions and ways to offer these contracts on a competitive basis for a set amount of emissions reductions.

Associated links

• Budget 2024: Fairness for Every Generation