Principal Issues: Appropriate capital cost allowance (“CCA”) classification of “wellsite trailers” under Schedule II of the Income Tax Regulations (the “Regulations”) under two specific scenarios. 1. The wellsite trailers are moved around frequently from site to site, i.e. at least 30 times a year; 2. The wellsite trailers are installed and remain at a particular site for a long period of time.
Position: 1. Class 10(e); 2. Class 6 or Class 1(q).
Reasons: 1. The wellsite trailers in this scenario are portable and are moved frequently and are therefore not buildings or structures, but instead fall within Class 10(e).
2. In the second scenario, the wellsite trailers are installed and remain at a particular site for a long period of time and would otherwise have the characteristics of a building. If the wellsite trailers are made of corrugated metal and have no footings or other base supports below ground level, they would fall within Class 6. If this is not the case, such wellsite trailers would fall within Class 1(q).