About this Notice
This Notice explains how owners of eligible electricity generating facilities or deep
lake-water cooling facilities may receive a rebate of Retail Sales Tax (RST) paid on
building materials purchased and incorporated into such facilities after November 25,
2002 and before January 1, 2008. The rebate is also available to owners of
qualifying nuclear facilities for building materials purchased and incorporated into
such facilities after June 1, 2003 and before January 1, 2008.
Background
As part of the Electricity Pricing, Conservation and Supply Act, 2002, the Ontario
government introduced the rebate for RST paid on the purchase of building
materials incorporated into eligible electricity generating facilities, qualifying nuclear
facilities or eligible deep lake-water cooling facilities. The rebate applies to new
facilities as well as upgrades and expansions of existing facilities.
Alternative or Renewable Source of Energy
For the purpose of this rebate "alternative or renewable source of energy" means a
source of energy that produces electricity from wind, water, a biomass resource,
hydrogen, biogas, biofuel, landfill gas, an eligible fossil fuel (i.e., natural gas, blast
furnace gas, coke oven gas, basic oxygen furnace gas or peat), uranium, solar
energy, geothermal energy, tidal forces or thermal waste.
Eligible Electricity Generating Facilities
An "eligible electricity generating facility" means a facility in Ontario, excluding
residential premises and multi-residential premises, and including qualifying property
incorporated into the facility,
- that is substantially used to generate electricity from alternative or
renewable sources of energy
- that generates the electricity for its own consumption or for delivery to a
person in Ontario or to the Independent Electricity Market Operator
(IMO)-controlled grid, and
- that is not a non-qualifying nuclear facility.
The "qualifying nuclear facilities" are:
- Bruce Nuclear Generating Station A (Units 1 and 2)
- Pickering Nuclear Generating Station A (Units 1, 2 and 3).
"Qualifying property" means:
- tangible personal property used to deliver electricity to a person in
Ontario or to the IMO-controlled grid
- tangible personal property used to convey water to a hydro-electric
turbine or to a reservoir that supplies water to a hydro-electric turbine
- tangible personal property used in the distribution of steam or heated
water for the purposes of district heating.
District heating means the heating of more than one building through the distribution
by underground pipes of steam or heated water from a central location.
Facilities selling more than 10% of the electricity generated to customers outside
Ontario will not qualify as an eligible electricity generating facility. If an electricity
generating facility ceases to qualify within four years of receiving the rebate (through
significant exports, i.e., more than 10% of the electricity generated), the rebate must
be repaid.
Eligible Deep
Lake-Water
Cooling
Facilities
An "eligible deep lake-water cooling facility" means:
- a facility in Ontario, including qualifying property, that uses the constantly
cold water found at the bottom of a lake to cool the fluid circulated
through a district cooling system.
District cooling means the cooling of more than one building through the distribution
by underground pipes of cooling fluid from a central location.
"Qualifying property" means:
- tangible personal property used to collect water for a deep lake-water
cooling facility or to distribute fluid through a district cooling system, and
includes production machinery and equipment that is not otherwise
eligible for exemption under the Retail Sales Tax Act.
Building
Materials
Eligible for the
Rebate
For an electricity generating facility, including a qualifying nuclear facility, building
materials that are eligible for the rebate include:
- materials used for structures housing production equipment (producing
electricity and/or steam), and related processes such as control rooms,
instrumentation, environmental or emission monitoring rooms
- materials used for ancillary buildings related to the facility, such as
security offices that ensure the safe operation of the facility.
The rebate does not apply to production machinery, equipment and other items such
as turbines and generators that may be exempt from RST under any other section of
the Retail Sales Tax Act.
For a deep lake-water cooling facility, a rebate may be claimed on building materials,
such as:
- pipes, pumps, and valves to collect water, to carry water through the
production facility, and to distribute cooling fluid to customers
- materials used for structures housing production equipment, and related
processes such as control rooms and instrumentation
- production machinery, such as chillers and heat exchangers.
Who can Claim
the Rebate?
The rebate may be claimed by the owners/lessees of eligible electricity generating
facilities, including qualifying nuclear facilities, and of deep lake-water cooling
facilities who purchase and incorporate building materials into these facilities.
The owner/lessee of an "eligible facility" may claim a rebate of RST paid on the
purchase of building materials that were purchased either by the owner/lessee or by
a contractor under a written construction contract and incorporated into an eligible
facility.
Calculating the
Rebate
Where the owner/lessee purchases the building materials directly from a supplier,
without installation, the amount of the rebate is based on the actual amount of RST
paid on the building materials.
Where the owner/lessee enters into a written contract with a contractor to construct,
expand or renovate an eligible electricity generating or deep lake-water cooling
facility, and does not know the actual amount of RST paid by the contractor, the
rebate is based on a percentage of the total contract price as follows:
- if the federal Goods and Services Tax (GST) is included in the contract
price, the rebate is calculated by multiplying the payments made
(including the GST) by 3%
- if the GST is not included in the contract price, the rebate is calculated
by multiplying the payments made by 3.4%.
When calculating the rebate, using one of the above formulas, the following costs
must be removed from the total contract price before calculating the rebate
amount:
- land or land improvement costs
- the cost of obtaining a performance bond
- charges for development or for project consulting services
- architect's fees
- building permit fees
- charges for temporary facilities
- cost of demolition
- equipment rental charges, and
- the cost of tangible personal property that may be exempt from tax under
any other section of the Retail Sales Tax Act.
If the contractor provides the owner/lessee with actual receipts or a signed
statement to confirm the actual amount of RST paid on the building materials, the
owner/lessee may choose to claim this amount.
Rebate Time
Frames
Eligible building materials must be purchased and incorporated into eligible
electricity generating and/or deep lake-water cooling facilities after
November 25, 2002 and before January 1, 2008. For qualifying nuclear facilities,
the building materials must be purchased and incorporated into eligible facilities after
June 1, 2003 and before January 1, 2008.
How to Claim
the Rebate
To claim a rebate, a completed "General Application for Refund of Retail Sales Tax"
form, along with supporting documentation, must be submitted to the Retail Sales
Tax Branch - Refund Unit, 1600 Champlain Drive, Whitby, Ontario, L1N 9B2.
If the actual amount of RST paid is being claimed, a copy of the sales contract,
invoice or other receipt to show the date of purchase, the amount of RST charged,
proof that the RST was paid and confirmation of the installation date must be
included with the rebate claim.
If the claim is being made for building materials purchased and incorporated by a
contractor as part of a construction contract, a copy of the contract and proof of
payment must be included. As an alternative, if the actual amount of RST paid by
the contractor is being claimed, copies of the contractor's invoices or a signed
statement by the contractor stating the amount of the RST paid on the eligible
building materials must be included.
Rebate claims must be received by the Ministry of Finance within four years from the
date the RST was paid or from the date the contract was paid. Please allow 6 to 8
weeks for processing of the rebate.
Please note that interest is not payable on these rebate claims.
Interpretation of
Scientific
Matters
The Ministry of Energy and Infrastructure will be responsible for providing opinions relating to
engineering and scientific matters for this rebate program.
For More
Information
For more information or to obtain a refund form, please contact the nearest Ontario
Ministry of Finance Tax Office listed under Taxes - Provincial (Retail) Sales Tax in
the blue pages of your telephone directory, or visit our website at ontario.ca/finance.
