CRA indicates that completing an exploratory geothermal well ultimately used in production generates Class 43.1 costs, not CRCE

CRA indicated that the costs of both drilling and (except as noted below) completing exploratory wells for a geothermal project generally qualify as Canadian renewable and conservation expense (“CRCE”). However, in the case of a production well - or a (smaller diameter) exploratory well that nonetheless ends up being used for production (including small-scale heat or electricity production), - the costs only of drilling qualify as CRCE whereas the costs of completing such a well instead generally would be an addition to the Class 43.1 costs of the project.

Neal Armstrong. Summary of 17 July 2018 External T.I. 2018-0747311E5 under Reg. 1219(1)(h) and Schedule II - Class 14.