Given the interest in green buildings and the protection of the environment, we have put together a bulletin of certain environmentally friendly programs and initiatives that you may be able to look at to obtain some financial incentives in your projects. The list is not intended to be exhaustive, but it gives you an idea of the types of programs that are currently being applied in the market.
B. FEDERATION OF CANADIAN MUNICIPALITIES
The Government of Canada endowed the Federation of Canadian Municipalities (FCM) with $550 million to establish the Green Municipal Fund (GMF). GMF is a long-term source of financing for municipalities and their partners to develop communities that are more environmentally, socially, and economically sustainable.
The Fund provides low-interest loans and grants to municipalities that deliver leading examples of sustainable development; and builds capacity and shares the knowledge and experience gained by municipal leaders through GMF-funded studies and projects.1
GMF grants can reimburse up to 50 percent of the total eligible costs2 of a plan, up to a maximum grant amount of $350,000.
C. ECOACTION ENERGY RETROFIT INCENTIVES (GOVERNMENT OF CANADA)
Homeowners, building owners and industries can take advantage of the ecoENERGY Retrofit grant program offered by Natural Resources Canada (NRCan).
The Government of Canada launched ecoENERGY Retrofit Homes program on April 1, 2007, which has paid out $91 million to Canadian homeowners for more than 85,000 home retrofits. On March 30, 2009, the Honourable Lisa Raitt, Minister of NRCan, announced for a limited time, that grants under the ecoENERGY Retrofit Homes program will increase by 25 percent.3 The maximum grant one can receive per home or multi-unit residential building is $5,000. Owners of low-rise residential rental properties may also qualify for a grant.
The residential energy assessment initiative has been developed by the Office of Energy Efficiency of NRCan to help property owners make retrofit choices that improve the comfort and energy efficiency of their home. Advisors will show homeowners how to cut heating and cooling costs.
NRCan has contracted with organizations across Canada to make the residential energy assessment service widely available. The Government of Canada provides grants to property owners who complete energy efficiency retrofits based on the energy advisors' recommendations. Owners of low-rise residential rental properties may also qualify for a grant.
Homeowners will then have until March 31, 2011, or 18 months from the date of their pre-retrofit evaluation report (whichever comes first) to complete the post-retrofit evaluation in order to receive a grant, subject to available funding.
Ontario provides a matching rebate to this federal rebate (see the Ontario Home Energy Savings Program below).4
Organizations that own, manage or lease the following types of buildings can apply:
- Commercial and institutional buildings such as retail stores, hotels, restaurants, office buildings, schools, health care facilities, places of worship, and college and university buildings;
- Provincial, territorial and municipal buildings
- Multi-unit residential buildings
- Mixed-use commercial/residential buildings
Building owners and managers could receive up to $10 per gigajoule of estimated energy savings, 25 percent of eligible project costs or $50,000 per project ($250,000 per organization).5 This program ends on March 12, 2012 or when all funds are committed.6
The ecoENERGY Retrofit Incentive for Industry Program was launched on April 1, 2007 and was originally scheduled to run until March 31, 2011. The program has been extended to March 31, 2012, subject to the availability of funds.
This program provides a financial incentive of up to 25 percent of project costs to a maximum of $50,000 per application and $250,000 per corporate entity to help small- and medium-sized industrial facilities implement energy-saving projects.7
D. ONTARIO HOME ENERGY SAVINGS PROGRAM (GOVERNMENT OF ONTARIO)
In addition to the federal ecoENERGY Retrofit Homes Program, the homeowner is eligible to the Ontario Home Energy Retrofit Program.
The Ontario Home Energy Savings Program (OHESP) is an energy conservation program from the Government of Ontario, which will pay half (up to $150) of the Home Energy Audit that will find home’s energy leaks and identify renovations homeowners can make to lower their energy bills.8 If some or all the upgrades suggested in the Energy Efficiency Report are made, homeowners could qualify for up to $10,000 in Ontario and federal rebates. Owners of multi-unit low-rise residential buildings are eligible to receive up to $1,000,000 over the life of the retrofit program ($500,000 each from the Government of Ontario and the Government of Canada).
Please note that the Province of Ontario is currently reviewing the Ontario Home Energy Savings Program’s rebate amounts.
E. ONTARIO POWER AUTHORITY
The Cool Savings Rebate Program is available for residents and businesses (with residential-type systems) of Ontario who work with a participating contractor to:
- Replace an existing central air conditioning (CAC) system with one that meets or exceeds the ENERGY STAR® standard for CAC systems;
- Replace an existing furnace with a mid or high efficiency furnace or air handler with a fully variable speed electronically commutated motor (ECM); and
- Replace an existing non-programmable thermostat with a programmable thermostat
The program runs from January 1, 2009 through to December 31, 2009 and the following rebates are available:
a) $25 rebate for the installation of a programmable thermostat by a participating contractor;
b) $125 rebate for the replacement of an existing furnace with the purchase of a mid or high-efficiency furnace equipped with an Electronically Commutated Motor (ECM);
c) $250 rebate for the replacement of an existing central air conditioner with the purchase of an ENERGY STAR qualified central air conditioning system, heat pump, or ductless split system;
d) $400 rebate for the replacement of an existing central air conditioner with the purchase of an ENERGY STAR qualified, stand-alone CEE "Tier 2" level central air conditioning system (CAC) or heat pump.9
F. MINISTRY OF REVENUE- RETAIL SALES TAX EXEMPTION
Retail Sales Tax (RST) exemptions for certain new ENERGY STAR® qualified household products purchased, rented, or leased after July 19, 2007 and before September 1, 2009 are available. Qualifying household appliances are non-commercial refrigerators, dishwashers, clothes washers, freezers, dehumidifiers and room air conditioners.
A point-of-sale exemption is also available for certain lighting products listed as ENERGY STAR® qualified by the Office of Energy Efficiency, Natural Resources Canada. Qualifying lighting products are energy-efficient light bulbs and decorative light strings.10
G. TAX INCENTIVES FOR BUSINESS INVESTMENTS IN ENERGY CONSERVATION AND RENEWABLE ENERGY
Two specific taxation measures are available to encourage investments in energy efficiency and renewable energy projects:
Class 43.1 in Schedule II of the Income Tax Act
This measure allows taxpayers an accelerated write-off of certain equipment that is designed to produce energy in a more efficient way or to produce energy from alternative renewable sources. Class 43.1 provides an accelerated rate of write-off for certain capital expenditures on equipment that is designed to produce energy in a more efficient way or to produce energy from alternative renewable sources.
Class 43.1 allows taxpayers to deduct the cost of eligible equipment at up to 30 percent per year, on a declining balance basis.11 Thus, there is a significant tax incentive for owning property that qualifies under s. 43.1.
Canadian Renewable and Conservation Expenses (CRCE)
The CRCE is a category of fully deductible expenditures associated with the start-up of renewable energy and energy conservation projects for which at least 50 percent of the capital costs of the property would be described in Class 43.1. CRCE category of expenditures was introduced in the 1996 Budget to allow investors to fully write-off certain intangible costs associated with investments in renewable energy and energy conservation projects. CRCE is intended to promote the development of conservation and renewable energy projects in the same way that is currently done for investments in other types of resource activities.
Under CRCE, eligible expenditures are 100 percent deductible in the year they are incurred or can be carried forward indefinitely for deduction in later years. These expenditures can also be renounced to shareholders through a flow-through share agreement, providing the agreement was entered into before the expense was incurred. To be eligible, costs must be incurred after December 5, 1996.
In general, the following types of systems qualify for CRCE or Class 43.1 write-off:
- certain cogeneration and specified-waste fuelled electrical generation systems
- small-scale hydro-electric installations (not exceeding 15 megawatts of average annual capacity)
- wind energy electrical generation systems
- enhanced combined cycle systems
- expansion engines
- photovoltaic electrical generation systems (three kilowatts capacity or larger)
- geo-thermal electrical generation systems
- electrical generating systems using solution gas that would otherwise be flared during the production of crude oil
- active solar systems (including groundsource heat pumps)
- heat recovery systems
- specified-waste fuelled heat production equipment
Moreover, intangible expenses eligible under CRCE include:
- the cost of pre-feasibility and feasibility studies of suitable sites and potential markets for projects that will have equipment included in Class 43.1
- costs related to determining the extent, location and quality of energy resources
- negotiation and site approval costs
- certain site preparation costs that are not directly related to the installation of equipment
- service connection costs incurred to transmit power from the project to the electric utility