March 2002
- Consulting with Canadians -

Background Information

Class 43.1 (Income Tax Regulations)

Related document:

• Letter from Mr. Paul Berg-Dick - Re: Consultations - Class 43.1.

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Income Tax Regulations:

The criteria for admissibility governing Class 43.1 is included in Schedule II of the Income Tax Regulations. Please refer to the following hyperlink to view the Income Tax Regulations:

http://laws.justice.gc.ca/en/I-3.3/C.R.C.-c.945/index.html

Natural Resources Canada Publications:

Natural Resources Canada has published a brochure that describes tax incentives for business investments in energy conservation and renewable energy. A copy of this brochure is available at the following hyperlink:

http://www2.nrcan.gc.ca/es/erb/english/View.asp?x=469&oid=111

Natural Resources Canada also publishes the Class 43.1 Technical Guide for Energy Conservation and Renewable Energy Equipment. Natural Resources Canada is the "engineering and scientific authority" for Class 43.1. This Guide provides a thorough discussion of technical content of Class 43.1.

Recent Changes to Class 43.1:

Class 43.1 was introduced in the 1996 Budget. Recent changes include:

2001 Budget

:

• Property that generates electricity using blast furnace gas produced at steel mills is now included in Class 43.1.
• More small hydro projects will now qualify for Class 43.1.

1999 Budget

:

• Electrical generating equipment using solution gas that would otherwise be flared during the production of crude oil was added to Class 43.1.