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Canada

Ontario government tax incentives seen as symbolic by wind industry

The Ontario government has announced tax breaks and a green power purchase target in an attempt to boost electricity production in the province's tight supply market. The proposed tax incentives, which will apply to so-called alternative energy sources like wind, natural gas, hydro and solar, include a corporate income tax holiday, a property tax holiday for new facilities, a 100% corporate tax write-off for the cost of assets used to generate new supply and a capital tax exemption for those assets. The government has also pledged to acquire 20% of its electricity usage from renewable sources. Glen Estill, an Ontario wind producer and the incoming president of the Canadian Wind Energy Association, calls the government's actions "important, but still largely symbolic." The tax breaks, he says, work out to roughly C$0.003/kWh in cost reductions for a project. "We believe that the wind industry in Ontario can install several thousand megawatts of wind energy," he says. "This is not sufficient in its own right to cause that several thousand megawatts to be put in place." The impact of the province's green power purchase plans is hard to gauge until details about which facilities will be included are released, says Estill. He would like to see schools, universities, hospitals and other provincial agencies that use a large amount of power included. "If it is just ministries, it is probably not all that much power. But it is still enough, it is still a significant symbolic thing."

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