A Canadian public corporation ("Z Co"), as LP, and newly-incorporated CBCA grandchild subsidiary ("GP") of Z Co, as GP, form the Partnership. The Partnership enters into a "Concession Agreement" with the Province respecting the financing, construction and operation by the Partnership of the Facility for the specified Contract Period and respecting the granting by the Province to the Partnership of the "Concession", i.e., the right to use and access the Facility and related site for the purpose of constructing the Facility, and operating it during the "Operating Period," i.e., the portion of the Contract Period following substantial completion. The Province will be the owner of the Facility at all times so that title to property will pass to it as the construction work occurs.
In return for the grant of the Concession, the Partnership will agree to construct the Facility and operate it during the Operating Period at its own expenses except for the amount of $XX that the Minister will pay to the Partnership during the Construction Period.
For the purposes of apportioning the capital cost of the Concession over the remaining period of the Concession in accordance with Reg. 1100(1)(c), the Partnership will aggregate its total capital expenditures incurred with respect to the Concession (including capital repairs and alterations once operations commence, but as reduced by the construction payments received from the Province) on a quarterly basis and amortize that quarterly amount over the remaining period of the Concession.
Rulings that the Concession will be included in Class 14 with a capital cost including the design and net construction costs.