In order to promote the use of clean energy, the Budget includes a proposal to accelerate CCA on certain clean energy generation equipment. Under the current CCA regime, Class 43.2 provides accelerated CCA (50% per year on a declining balance basis) for specified clean energy generation and conservation equipment. This class incorporates, by reference, a detailed list of eligible equipment that generates or conserves energy by: (i) using a renewable energy source (e.g., wind, solar, small hydro); (ii) using fuels from waste (e.g., landfill gas, wood waste manure); or (iii) making efficient use of fossil fuels (e.g., high efficiency cogeneration systems, which simultaneously produce electricity and useful heat). This constitutes an exception to the general practice of setting CCA rates based on the useful life of assets.

The Budget goes one step further in order to encourage productive use of otherwise wasted energy by expanding the list of equipment that falls into Class 43.2 to include equipment that generates electricity using waste heat. In particular, it is proposed that Class 43.2 be amended to include equipment that is used by the taxpayer, or by a lessee of the taxpayer, to generate electrical energy in a process in which all or substantially all of the energy input is from waste heat.

Eligible equipment will include electrical generating equipment, control, feedwater and condensate systems, and other ancillary equipment, but not buildings or other structures, heat rejection equipment (such as condensers and cooling water systems), transmission equipment or distribution equipment. Systems will not be eligible if they use chlorofluorocarbons or hydrochlorofluorocarbons due to their negative environmental impacts.

This measure will encourage investment in equipment that uses thermal energy that would otherwise be wasted in order to generate electricity.

This measure will apply to eligible equipment acquired on or after March 22, 2011 ("Budget Day") that has not been used or acquired for use before that date.