< Browse more articles

The federal government’s Fall Economic Statement, delivered by Finance Minister Bill Morneau last month included some significant climate actions through new tax reforms. First, the cost of specified clean energy equipment will be eligible for immediate and full write-off. Secondly, investment in other types of equipment, including efficiency-related technology, will be eligible for accelerated write-offs.  The whole package represents an injection of $14.4 billion to stimulate investment across Canada.

The economic statement allows businesses to immediately write off the full cost of machinery and equipment used in the manufacturing and processing of goods for tax purposes (Class 53 under the Income Tax Regulations), as well as specified clean energy generation and energy conservation equipment (classes 43.1 and 43.2). The former could enable energy efficiency upgrades in the manufacturing sector, and the latter includes technologies such as cogeneration, solar heating, heat recovery equipment, geo-exchange and district energy systems. This is strengthening the tax incentives already provided through accelerated capital cost allowance (ACCA).  The expectation is that allowing businesses to immediately or more quickly write off their capital expenses will significantly improve the business case for investment in efficiency and reduced carbon upgrades.

HRAI and a number of allied associations with an interest in energy efficiency have for years advocated for favourable tax treatment as a preferred approach to direct cash incentives. There are details that still need to be clarified, however, so HRAI will be engaging with the federal government to determine the full implications for the industry and how these measures will be rolled out and promoted.

For more information, contact Martin Luymes at 1-800-267-2231 ext. 235, or email mluymes@hrai.ca.