CRA finds that fees paid to a landowner to access a CCUS construction site were not part of the capital cost of the resulting Class 57 property

The taxpayer, which proposed to construct a qualifying CCUS project in Canada, agreed with the landowner, whose land was required to access the project site, to pay fees for the right to access that land during project construction, and to thereafter restore the land to its original condition.

CRA indicated that the access fees appeared to be an expenditure incurred in connection with a separate asset of a capital nature and, accordingly, would not be included in the cost of the prospective Class 57 asset. There was insufficient information to determine the particular depreciable class for such separate property.

The fees incurred to restore the property arguably should receive the same treatment, i.e., as an addition to such separate class of depreciable property. Otherwise, it would have to be determined whether their current deduction was denied by s. 18(1).

Neal Armstrong. Summary of 25 November 2025 External T.I. 2025-1049831E5 under s. 127.44(1) – qualified CCUS expenditure, s. 13(21) – UCC – A.