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Construction Industry Fights for Energy Tax Reform

Construction Industry Fights for Energy Tax Reform

Nine property and construction associations in Canada are fighting for more favourable tax treatment of energy efficiency commercial building retrofits.

The Canadian Construction Association (CCA), the Canadian Federation of Apartment Associations (CFAA), the Real Property Association of Canada (REALpac) and the Canadian Institute of Plumbing and Heating (CIPH) have joined forces with five other organisations to create the Building Energy Efficiency Coalition (BEEC).

The Coalition will lobby for changes in taxation to increase the attractiveness of commercial building retrofits aimed at improving energy efficiency.

Specifically, the BEEC is pushing for the inclusion of a number of heating and cooling items in CCA Class 43.2, a provision in the tax code which allows deductions for the writing off or depreciation of certain machinery and equipment at a rate of 30 per cent each year. This includes certain additional heat recovery ventilators and active solar equipment as well as certain high efficiency heating equipment and high efficiency chillers.

In a detailed submission to the Minister of Finance and the Minister of Natural Resources, the Coalition argued that improved energy efficiency in buildings is the cheapest source of energy available, reduces the need for costly new energy infrastructure, helps to reduce greenhouse gas emissions and enables Canada to achieve its emissions reduction targets while creating significant employment opportunities in Canada.

man climbing glass building

It says similar but more extensive provisions to the ones it is seeking are already in place in the US and Britain.

Furthermore, far from starving the government of revenue, the BEEC says that in many cases, the revised tax treatment would increase tax receipts due to a combination of increased net income of building owners through reduced energy costs, increased profits and wages of manufacturers and installers of the energy efficient equipment and on increased wages of new workers who are hired.

“Energy efficiency tax reform will create a large number of good jobs, since the work must be done in Canada and much of the equipment is manufactured in Canada,” CFAA president John Dickie said. “Energy efficieny tax reform is a win-win proposition, good for workers, good for the environment, good for building owners and tenants, and positive for government revenue.”

The coalition also includes the Heating, Refrigeration and Air Conditioning Institute of Canada, the Thermal Insulation Association of Canada, the Association of Energy Engineers – Southern Ontario Chapter, Energy Services Association of Canada and the Mechanical Contractors Association of Canada.

By Andrew Heaton
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