Ottawa, Ontario, 3-March-2008 - On February 26, 2008, Minister of Finance, the Honourable James Flaherty, presented the third budget of the current Conservative government. The budget will not give rise to a federal election but from an energy perspective, it continues to deliver on the government’s commitment to increase the viability of clean energy generation systems.

The 2005 Budget first introduced the concept of “50% accelerated CCA” (fast tax write offs) for a range of equipment and machinery described as clean energy generation alternatives. There have been modest increases each year in the nature of systems that qualify for this fast write off, including, for example, wave and tidal power energy producing systems in the 2007 Budget.

It has since been an operating assumption within the government that the business community will take the theoretical economic benefits of the enhanced cash flows derived from these fast tax write offs and makes investment decisions accordingly, all within what the government refers to as the “business model”.

The 2008 Budget finally tackles the fact that the business model is not yet optimal. This Budget positions “expanding the range of business models” which can actually benefit from these tax breaks as one of the desired outcomes. In this regard, the Budget proceeds to eliminate “use restrictions” with respect to four specific systems.

The most significant change relates to ground source heat pump (GSHP) systems. The requirement that the liquid or gas heated by equipment that is part of a GSHP system be used only in an industrial process or in a greenhouse has been eliminated. The new requirement is simply that the system meets the Canadian Standards Association regulations for the design and installation of earth energy systems.

With respect to waste-fuelled thermal energy systems, restrictions have been eliminated such that systems producing heat energy used in an industrial process or greenhouse now qualify, independent of who owns the facility.

Similarly, with respect to systems that convert wood waste or plant residue into bio-oil, restrictions have been eliminated so that systems generating electricity or heat energy used in an industrial process or greenhouse qualify, again independent of who owns the facility.

And finally, with respect to systems that produce, store and use biogas, restrictions have been eliminated so that the systems qualify even in circumstances where the biogas is simply sold to third parties.

In addition to these measures, there were also provisions to add the simple generation of heat from bio-oil, the use of “animal matter” and sludge from a licensed sewage treatment facility as feedstock for biogas, and the use of biogas as a feedstock for waste-fuelled thermal and electrical energy generation systems to the rules.

Energy Advantage® is well positioned to inform its customers about these tax write off opportunities and compliance regulations so that they are able to take full advantage of them.