Evidence of meeting #51 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was agreed.
A video is available from Parliament.
Liberal
The Chair Liberal Wayne Easter
I don't see any questions on that.
(Clause 83 agreed to on division)
(On clause 84)
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Currently the tax rules provide for an accelerated deduction in respect of certain zero-emission vehicle properties. These amendments would extend the class of vehicles eligible for the enhanced zero-emission vehicle deduction. It would include things like off-road vehicles and it would extend the capital cost allowance or tax depreciation deduction.
Conservative
Ted Falk Conservative Provencher, MB
Thank you.
By off-road vehicles, are you referring to recreational vehicles, heavy equipment, or agriculture vehicles? What would you be referring to there?
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Well, there are requirements that need to be met. One of the existing prohibitions was that they had to be driven on a road. I don't think there are distinctions made between types.
In terms of the specific technologies and types of vehicles, is my colleague, Maude Lavoie, able to join in, or maybe Dave Beaulne, who worked on the file?
Liberal
The Chair Liberal Wayne Easter
Good. That's not a problem.
We'll have Mr. Fast after this.
I know there are only 65 folks sitting in the wings there while we go through this process. Thank you all for your patience.
Dave Beaulne, go ahead.
Dave Beaulne Senior Director, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance
Hi there. Yes, I'm happy to help out Trevor. It has been a long haul.
On the types of vehicles, we have a few examples that we've given in the clause-by-clause description. I'll just quote from it.
I'm not an expert in this technology, but what we talk about are items that go into class 56 of schedule II of the income tax regulations: “Notable examples would be zero-emission aircraft, watercraft, trolley buses and railway locomotives.” However, I am aware that some of the large equipment used in mining, I guess, would also potentially be fully self-propelled and fully electric.
Conservative
Ted Falk Conservative Provencher, MB
You mentioned that mining would probably qualify. I'm thinking particularly of agriculture.
Would agriculture equipment also qualify? There is more and more energy-efficient agriculture equipment being produced.
Senior Director, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance
I see that Maude Lavoie has just shown up. I don't want to steal her thunder. She knows more about this stuff than I do.
Maude Lavoie Director General, Business Income Tax Division, Tax Policy Branch, Department of Finance
Yes, as long as the equipment is fully electric or uses hydrogen, it could be equipment used in agriculture. It could be forklifts, it could be tractors, it could be Zambonis, or it could be golf carts. It could be equipment that meets the requirements in any industry.
What we have heard from more is the mining sector, which seems to have technology available and ready to be used, but any other industrial sectors could also qualify if they use equipment that is fully electric or using hydrogen.
Conservative
Ed Fast Conservative Abbotsford, BC
I think most of my questions have actually been answered. That was very helpful.
Just to be very clear, this is a temporary enhanced CCA that allows the capital costs to be written off in the first year. In other words, there's no schedule of writeoff. It's one year, and it's all written off in that year.
Maude, is that correct?
Director General, Business Income Tax Division, Tax Policy Branch, Department of Finance
Yes, that's correct. It's for equipment that becomes available for use before 2023, so it is temporary.
Director General, Business Income Tax Division, Tax Policy Branch, Department of Finance
The 100% is until 2023. Then there's a phase-out, so it will be then fully phased out by 2028.
Conservative
Ed Fast Conservative Abbotsford, BC
That wasn't explained in my notes here, so thank you for that clarification. I appreciate it.
Liberal
The Chair Liberal Wayne Easter
Is there anything further on this?
(Clause 84 agreed to on division)
(On clause 85)
Thank you, all three, for your explanations there.
Trevor, we're turning to clause 85.
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Thank you.
I would say, borrowing from my colleague Pierre's grouping, that clauses 85 through 87 are all consequential amendments relating to the measure that we just discussed.
Liberal