Principal Issues: Does equipment use to produce biogas from non-anaerobic digestion of manure qualify as a class 43.1 asset.
Position: No.
Reasons: Budget 2005 only proposes to extend eligibility for Class 43.1 to equipment used to produce biogas (which is primarily methane) from the anaerobic digestion of manure.
September 14, 2005
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable John McCallum, Minister of National Revenue, has asked me to reply to the email you sent to your Member of Parliament, XXXXXXXXXX, regarding accelerated capital cost allowance for equipment used to produce biogas from hog manure. The Honourable Andy Mitchell, Minister of Agriculture and Agri-Food, forwarded a copy of your email to Minister McCallum on July 14, 2005.
As explained in Annex 8 Tax Measures: Supplementary Information of the February 23, 2005 Budget Plan, to encourage further capture and use of biogas, the budget proposes to extend eligibility for Class 43.1 to equipment used to produce biogas, which is primarily methane, from the anaerobic digestion of manure. I note that you indicated in your email that your company does not fall into the anaerobic digester group. Therefore, it is unlikely that any of your company's equipment would qualify for the accelerated capital cost allowance.
You also indicated that you could not find any details about the Clean Fund or environmental incentives. These matters were addressed in Chapter 5 of Budget 2005 and can be found on the Department of Finance Web site at www.fin.gc.ca/budget05/bp/bpc5e.htm.
If you would like to discuss your company's assets and activities to ascertain what incentives it might be eligible for, I encourage you to visit the Vancouver Tax Services Office at 1166 West Pender Street, Vancouver BC V6E 3H8.
I trust that the information I have provided will be helpful.
Yours sincerely,
Brian McCauley Assistant Commissioner Policy and Planning Branch
2005-014677
Charles Rafuse
613-957-8967