CRA Denies Tax Deduction For Alberta Climate Change Fund Payments

As emissions and cap-and-trade regimes develop, the tax issues relating to such regimes evolve and receive further consideration. One aspect of Alberta's emission reduction regime is the Climate Change and Emissions Management Fund (the Fund). A greenhouse gas emitter that is subject to Alberta's provincial emission reduction target may pay $15 per tonne into the Fund to the extent its emissions are in excess of the emissions target set by Alberta's regime. The money collected by the Fund is intended to be invested into projects, initiatives and technologies relating to reducing emissions.

One of the tax issues relating to this type of regime is the nature of contributions to the Fund for tax purposes, and in particular whether the contributions are deductible for tax purposes.