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ARTICLE · 03 MARCH 2005

Canada Enhances Tax Incentives For Green Energy Projects

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For a number of years, Canada has offered tax incentives to encourage the development of efficient or so-called Green Energy Projects. These incentives include an accelerated capital cost allowance deduction for the capital cost of certain assets and an immediate deduction for certain expenses incurred in the development of Green Energy Projects.

CanadaEnergy and Natural Resources
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Article by Bill Maclagan, ©2005 Blake, Cassels & Graydon LLP

This article was originally published in Blakes Bulletin on Taxation - March 2005

For a number of years, Canada has offered tax incentives to encourage the development of efficient or so-called Green Energy Projects. These incentives include an accelerated capital cost allowance deduction for the capital cost of certain assets and an immediate deduction for certain expenses incurred in the development of Green Energy Projects. In the February 23, 2005 Budget (the Budget) the Minister of Finance has proposed to amend the Income Tax Act (Canada) (Act) and the regulations thereto (Regulations) to enhance these incentives. The Budget proposes to increase the maximum capital cost allowance (CCA) in respect of these assets to 50%, broaden the types of assets that are eligible for the accelerated CCA and enhance the immediate deduction of other expenditures.

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