Going Green Incentives

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Episode 4: Going Green Incentives

Release date: June 30, 2009
Contacts: Lana Paton or Wendy Potomski
Running time: 6:22 minutes

“Going green” challenges many businesses but is worth pursuing financially. Learn about various environmental incentives (provincial and federal) that will benefit your organization.

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Through interviews with prominent PwC tax subject matter professionals, Tax Tracks is an audio podcast series that is designed to bring succinct commentary on tax technical, policy and administrative issues that provides busy tax directors information they require.


Going Green Incentives

Welcome to this PricewaterhouseCoopers podcast — another in a series on Canadian and international tax issues affecting businesses and individuals in Canada.

Businesses in Canada, as elsewhere, face a sprawling range of issues that come under the broad heading of "corporate sustainability." Many of these relate to environmental concerns, which can be prompted by government or industry regulation, pressure from customers, good-old altruism or other motivations.

When it comes to "green" issues, risks abound. Some, such as fines and bad publicity, are obvious. But opportunities are plentiful too – and not just for windmill manufacturers or others operating specifically in the environmental field.

Many of these opportunities take the form of environmental incentives. These have been springing up across Canada at both the federal and provincial levels. The result? A complex array of "going green" incentives that provide funding, rebates, loans and tax savings for an enormous variety of "going green" activities.

If your competitors manage to take advantage of incentives while your organization misses out, that puts you at a clear competitive disadvantage – another risk. There is a good chance that several of these incentives could help your organization – some substantially. However, finding those worth considering can be something of a treasure hunt. Fortunately, PricewaterhouseCoopers has made this treasure hunt much easier.

Our Climate Change professionals can guide you. But to make the process as efficient as possible, they have prepared a set of user-friendly Going Green Tables as your map. These are available at no charge on our website.

In this brief podcast, rather than describing the many individual incentives, we'll offer a brief general overview.

Environmental incentives encompass projects related to climate change, sustainability, alternative fuels and energy efficiency, among other things. Some incentives are available to companies that create, design or use going green technologies and ideas. But many are available to businesses in more traditional areas. Incentives are provided not only through government agencies, but also through utility, power and other companies – often funded by government agencies.

While a number are quite modest, other incentives can be worth millions of dollars. Several are aimed at large companies that invest in leading-edge technology and processes, or that commercialize innovative technologies. Two examples are the federal ecoAgriculture Biofuels Capital Initiative and SD Tech Fund.

Other incentives focus on down-to-earth projects, such as retrofitting buildings or replacing equipment with energy-efficient alternatives. Some of these are things you might be considering even without the incentives. It is all in the Going Green Tables, including the amount of funding available.

Various criteria apply to the individual environmental incentives, but your organization may well be eligible if you are involved in:

  • Creation or adaptation of new technology, innovate products or processes
  • Pre-commercialization, demonstration or commercialization stages of development
  • Waste reduction
  • Greenhouse gas reduction
  • Energy conservation and efficiency
  • Reduction of environmental impact
  • Research and development, including research of new uses for bioproducts, alternative renewable fuels and co-products (This includes the development of generating systems and applies to transportation bio-fuel.)
  • Building and equipment retrofit, energy audits and feasibility studies
  • Creating alternative energy and selling any excess to the power grid

The incentives themselves take various forms, including interest-free loans (which include repayable grants based on profitability), rebates and grants. Other incentives involve corporate income tax. The capital cost allowance (or "CCA") system for tax depreciation includes environmental categories that allow for the quick write-off of capital expenditures.

A second aspect of the tax system that can come into play is the special treatment of expenditures for Scientific Research and Experimental Development (or "SR&ED" – sometimes pronounced "shred"). These tax write-offs, deductions and investment tax credits have the potential to be significant.

Some incentives have been around for years, and receive funding annually. Others are available for a limited time. Still others are not yet official, but are expected to be created with new government funding.

The incentives are in the Going Green Tables, but reciting a long list of specific incentives in this podcast wouldn't be practical. Instead, we suggest that you go to our website www.pwc.com/ca/greenincentives. (I'll repeat that in a moment) and check them out for yourself.

The PricewaterhouseCoopers Climate Change professionals listed in the tables will help you sort through the myriad of incentives and zero-in on those you can use. The website again is www.pwc.com/ca/greenincentives.

Whether you are looking for incentives for things you are doing already, or want to find out what you can do a little differently so that you can benefit from the array of incentives available, the incentive treasure hunt can be challenging. The Going Green Tables, together with our Climate Change professionals, will help you find the reward. Please don't hesitate to contact us for assistance.

Thank you for listening.

The information in this podcast is provided with the understanding that the authors and publishers are not herein engaged in rendering legal, accounting, tax or other professional advice or services. The audience should discuss with professional advisors how the information may apply to their specific situation.

Copyright 2009 PricewaterhouseCoopers LLP. All rights reserved. PricewaterhouseCoopers refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. For full copyright details, please visit our website at pwc.com/ca.