In light of the accelerated CCA rules under Reg. 1100(2), what are examples of manufacturing or processing properties in the oil and gas context? CRA responded:
Properties used in manufacturing or processing activities are included in Class 29, 43 or 53. The enhanced first year allowance for qualifying property does not affect the depreciable class of a property.
Examples of the activities in the oil and gas context that are considered manufacturing or processing include:
- the processing of natural gas at a straddle plant in Canada; and
- the processing of natural gas in a plant in Canada that is devoted primarily to the recovery of ethane.
… S4-F15-C1 … lists the following activities in the oil and gas context that are [excluded]:
- operating an oil or gas well or extracting petroleum or natural gas from a natural accumulation of petroleum or natural gas;
- processing natural gas as part of the business of selling or distributing gas in the course of operating a public utility;
- processing heavy crude oil recovered from a natural reservoir in Canada to a stage that is not beyond the crude oil stage or its equivalent; and
- “Canadian field processing” as defined in subsection 248(1).