1219 (1) Subject to subsection (2), for the purpose of subsection 66.1(6) of the Act, Canadian renewable and conservation expense means an expense incurred by a taxpayer, and payable to a person or partnership with whom the taxpayer is dealing at arm’s length, in respect of the development of a project for which it is reasonable to expect that at least 50% of the capital cost of the depreciable property to be used in the project would be the capital cost of any property that is described in Class 43.1 of Schedule II or that would be such property but for this subsection, and includes such an expense incurred by the taxpayer
(a) for the purpose of making a service connection to the project for the transmission of electricity to a purchaser of the electricity, to the extent that the expense so incurred was not incurred to acquire property of the taxpayer;
(b) for the construction of a temporary access road to the project site;
(c) for a right of access to the project site before the earliest time at which a property described in Class 43.1 of Schedule II is used in the project for the purpose of earning income;
(d) for clearing land to the extent necessary to complete the project;
(e) for process engineering for the project, including
(i) collection and analysis of site data,
(ii) calculation of energy, mass, water, or air balances,
(iii) simulation and analysis of the performance and cost of process design options, and
(iv) selection of the optimum process design;
(f) for the drilling or completion of a well for the project; or
(g) for the taxpayer’s test wind turbine for the project.
(2) A Canadian renewable and conservation expense does not include any expense that
(a) is described in paragraphs 20(1)(c), (d), (e) or (e.1) of the Act; or
(b) is incurred by a taxpayer directly or indirectly and is
(i) for the acquisition of, or the use of or the right to use, land, except as provided by paragraph (1)(b), (c) or (d),
(ii) for grading or levelling land or for landscaping, except as provided by paragraph (1)(b),
(iii) payable to a non-resident person or a partnership other than a Canadian partnership (other than an expense described in paragraph (1)(g)),
(iv) included in the capital cost of property that, but for this section, would be depreciable property, except as provided by paragraph (1)(b), (d), (e), (f) or (g),
(v) an expenditure that, but for this section, would be an eligible capital expenditure, except as provided by any of paragraphs (1)(a) to (e),
(vi) included in the cost of inventory of the taxpayer,
(vii) an expenditure on or in respect of scientific research and experimental development,
(viii) a Canadian development expense or a Canadian oil and gas property expense,
(ix) incurred, for a project, in respect of any time at or after the earliest time at which a property described in Class 43.1 of Schedule II was used in the project for the purpose of earning income,
(x) incurred in respect of the administration or management of a business of the taxpayer, or
(xi) a cost attributable to the period of the construction, renovation or alteration of depreciable property, other than property described in Class 43.1 of Schedule II, that relates to
(A) the construction, renovation or alteration of the property, except as provided by paragraph (1)(b), (f), or (g), or
(B) the ownership of land during the period, except as provided by paragraph (1)(b), (c) or (d).
(3) For the purpose of paragraph (1)(g), test wind turbine means a fixed location device that is a wind energy conversion system that would, but for this section, be property included in Class 43.1 of Schedule II because of subparagraph (d)(v) thereof, and in respect of which the Minister, in consultation with the Minister of Natural Resources, determines that
(a) the device will be the first such device installed at the taxpayer’s site for a proposed wind energy conversion system; and
(b) the primary purpose of the device is to test the level of electrical energy production at the site.
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- SOR/2000-327, s. 4
- Date modified: