Income Tax Act — I-3.3 (a)
qualified carbon capture expenditure of a taxpayer for a taxation year means an amount that is the portion of an expenditure incurred by the taxpayer to acquire a property in the year, in respect of a qualified CCUS project of the taxpayer, determined by the formula A × (B + C + D + E) × F where A is, in respect of property acquired by the taxpayer in the year (other than property situated outside of Canada), (a) the capital cost of property described in (and, in the case of property acquired before the first day of commercial operations of the project, verified by the Minister of Natural Resources as being property described in) (i) paragraph (a) of Class 57 in Schedule II to the Income Tax Regulations , or (ii) any of paragraphs (d) to (g) of Class 57 in Schedule II to the Income Tax Regulations in relation to equipment described in paragraph (a) of that Class, or (b) the proportion of the capital cost of dual-use equipment that, (i) if the equipment is described in subparagraph (a)(i) of the definition dual-use equipment in this subsection, or is acquired in relation to such equipment, the amount of energy expected to be produced for use in a qualified CCUS project over the project’s total CCUS project review period is of the total amount of energy expected to be produced by the equipment in that period (determined without regard to energy produced and consumed by the equipment in the process of producing energy), based on the project’s most recent project plan, (ii) if the equipment is described in subparagraph (a)‍(ii) of the definition dual-use equipment in this subsection, or is acquired in relation to such equipment, the mass of water expected to be supplied to a qualified CCUS project over the project’s total CCUS project review period is of the total mass of water expected to be processed by the equipment in that period, based on the project’s most recent project plan, (iii) if the equipment is described in subparagraph (a)(iii) of the definition dual-use equipment in this subsection, or is acquired in relation to such equipment, the amount of electrical energy expected to be transmitted by the equipment for use in a qualified CCUS project over the total CCUS project review period is of the total amount of electrical energy expected to be transmitted by the equipment in that period (determined without regard to electrical energy consumed by the equipment in the process of transmission), based on the project’s most recent project plan, and (iv) if the equipment is described in subparagraph (a)(iv) of the definition dual-use equipment in this subsection, or is acquired in relation to such equipment, the amount of electrical or heat energy expected to be distributed by the equipment (or if it is equipment that expands the capacity of existing equipment, the electrical or heat energy expected to be distributed by the existing and new equipment) for use in a qualified CCUS project over the total CCUS project review period is of the total amount of electrical or heat energy expected to be distributed by the equipment (or the existing and new equipment) in that period (determined without regard to energy consumed by the equipment in the process of distribution), based on the project’s most recent project plan; B is (a) if the time of the expenditure is after the first project period, nil, or (b) in any other case, the projected eligible use percentage for the first project period; C is (a) if the time of the expenditure is after the second project period, nil, or (b) in any other case, the projected eligible use percentage for the second project period; D is (a) if the time of the expenditure is after the third project period, nil, or (b) in any other case, the projected eligible use percentage for the third project period; E is the projected eligible use percentage for the fourth project period; and F is (a) if the time of the expenditure is before the second project period, 0.25, (b) if the time of the expenditure is duri