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Government of Manitoba
Manitoba Finance
Tax Assistance Office

Green Energy Equipment Tax Credit

Geothermal Heat Pump Systems

Beginning after April 4, 2007, property owners who installed or are considering installing a geothermal heat pump system can receive a tax credit from the Manitoba government as follows:

      • a 5% tax credit on geothermal heat pumps that are manufactured in Manitoba for use in Manitoba plus
      • a 10% tax credit on the balance of the cost of the geothermal system if installed by a member of the Manitoba Geothermal Energy Alliance.

A further 5% tax credit is provided to manufacturers on the sale of heat pumps that are made in Manitoba and sold for use in Manitoba.

Geothermal ground source heating systems have equipment that is or will be used primarily for heating an actively circulated liquid or gas and is part of a ground source heat pump system that meets the standards set by the Canadian Standards Association for the design and installation of earth energy systems, including such equipment that consists of underground piping, energy conversion equipment, energy storage equipment, control equipment, equipment designed to interface with other heating equipment.

The machinery and equipment must be new. Reconditioned or remanufactured machinery or equipment do not qualify for the credit. It is not necessary that a complete heating system qualify for the credit. For example, a qualifying new heat pump that is replacing an existing pump in a geothermal ground source heating system would be eligible for the credit. Additionally, the heat pump itself must have a full load coefficient of performance (as rated in accordance with the International Standards Organization standard 13256-1 for water-to-air and brine-to-air heat pumps, and standard 13256-2 for water-to-water and brine-to-water heat pumps) of not less than 3.3 for a closed loop design, or not less than 3.6 for an open loop design.

Capital cost includes invoiced costs of the geothermal system, as well as taxes - Manitoba sales tax, federal Goods and Services Tax, excise and customs taxes – and other cost related to acquiring and making the system operational - insurance, freight, installation. The costs must be incurred and paid. Where government assistance is received for purchasing or installing the system, this amount will reduce the amount claimable under the tax credit. Borrowing costs are not eligible.

The following equipment and property are not eligible for the credit: a building or part of a building, equipment used to heat water for use in a swimming pool, energy equipment that backs up eligible equipment described above, and equipment that distributes heated air or water in a building.

The system must be installed in Manitoba by an installer certified by the Manitoba Geothermal Energy Alliance Inc., a listing of which is available on the MGEA website www.mgea.ca. If the heat pump is manufactured in Manitoba the tax credit is 10% on the other capital costs plus 5% of the cost of the heat pump. If the heat pump is not manufactured in Manitoba the tax credit is equal to 10% on the other capital costs excluding the costs of the heat pump.

The tax credit can be claimed through the income tax system either on the individual T1 income tax return or the corporate T2 income tax return. 

For information on this tax credit contact:

The Manitoba Tax Assistance Office, Manitoba Finance
809 – 386 Broadway, Winnipeg MB R3C 3R6
Telephone: 204-948-2115
Toll free: (in MB) 1-800-782-0771
E-mail: tao@gov.mb.ca

For 2009 and forward, the Green Energy Equipment Tax Credit complements any Provincial Grants that may be available for geothermal installations.  For additional information on provincial geothermal grants, including a Grant Application Form see: Manitoba Geothermal Energy Incentive Program or visit www.manitoba.ca

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