Air
• Pollution control equipment
• Green technologies

Earth: carbon tax, trading
• Waste disposal/diversion
• End of life product plans
• Production inputs
• Packaging materials

Fire: fines
• Alternative energies: solar, wind, geothermal, biomass

Water: tax incentives
• Filtration
• Flow restrictions
• Waste diversion

Levies

Canadian governments are encouraging the use of green technologies through regulations and taxes. A recent flurry of legislative activity focuses on the “Air” and “Fire” elements.

Federal

The Income Tax Act provides an accelerated capital cost allowance (50 per cent per year on a declining balance basis) for specified clean energy equipment acquired before 2020. This category includes equipment that generates heat or electricity by using renewable energy sources (wind, solar, tidal, geothermal, biomass), uses waste to create bio-fuels, and uses fossil fuels in high-efficiency co-generation situations. Similar equipment meeting a lower efficiency standard is eligible for the lower, but still generous, 30 per cent per year CCA rate.

Where the majority of tangibles are eligible for the enriched CCA rates, certain intangible start-up costs (such as engineering, design work, and feasibility studies) are also treated as Canadian Renewable and Conservation Expenses. These expenses may be fully deducted in the year incurred, carried forward indefinitely for use in future years, or transferred to investors.

Provincial

• British Columbia: The province announced a revenue-neutral carbon tax commencing July 1, 2008. This tax will be offset by income tax reductions to businesses and individuals, and levied at the retail level. A cap and trade system will also be introduced commencing in August 2008.
• Alberta: An emissions trading system was introduced to provide for the purchase of credits and offsets. Where emissions levels are exceeded, it provides for payments into a management fund.