Tax Court finds LNG import facility qualified as processing asset included in Class 43

In Repsol Canada Ltd. v. The Queen, 2015 TCC 21, the Tax Court of Canada found that a deep water pier and plant (Facility) in New Brunswick qualified as a processing asset included in Class 43 for the 2007 taxation year.  The Facility was used for receiving, unloading, and storing liquid natural gas (LNG), and re-gasifying the LNG into methane (having required specifications) for sale into a transmission pipeline system.  This activity was sufficient to constitute “processing”.  The Facility was not included in Class 1(n), as part of a gas distribution system, because the activities at the Facility were conducted prior to the methane entering into a transmission/distribution pipeline system.  The capital cost allowance regulations were subsequently amended to include LNG plants in Class 47, depreciable at 8% per annum. Deep water piers are specifically excluded from Class 47. Presumably such piers remain processing assets included in Class 43 based on the reasoning in Repsol Canada Ltd.