The Canadian federal government has a number of historical and current initiatives to encourage the development of windpower. In the 2002 federal government "Climate Change Plan for Canada" the federal government set a target for at least 10% of new electricity capacity to be generated from renewable sources. Other historical government initiatives to facilitate the development of windpower include:

• a 2004 federal budget commitment of $1 billion over seven years in support of environmental technologies where $800 million over five years (beginning in 2006/07) will be invested to support the development and commercialization of promising environmental technologies in such key areas including renewable energy;
• a commitment under the 2002 Climate Change Plan for Canada to purchase 20% of the electricity needed for federal operations from emerging renewable energy sources such as wind and solar power;
• a $25-million Market Incentive Program ("MIP") to encourage residential and small- business and institutional customers to buy low-impact renewable energy where it is available;
• the creation of the Canadian Wind Energy Atlas, a large database of high resolution wind statistics for Canada to facilitate the development of wind projects;
• a $30-million investment in the development and demonstration of decentralized energy production systems to make more efficient use of locally available energy resources and renewable sources including wind;
• two tax incentives aimed mainly at promoting investment in renewable energy projects: Capital Cost Allowance Class 43 in the Income Tax Act, and the Canadian Renewable Conservation Expense; and
• a $30.7-million Aboriginal and Northern Communities Action Plan, to help aboriginal and northern communities increase their energy efficiency and their use of renewable electricity.

More recently, in the 2007 federal budget, the federal government launched its ecoENERGY for Renewable Power Initiative which will invest approximately $1.5 billion to increase Canada’s supply of clean electricity from renewable sources such as wind, biomass, low-impact hydro, geothermal, solar photovoltaic and ocean energy. The initiative aims to encourage the production of 14.3 TWh of new electricity from renewable energy sources, enough electricity to power about one million homes.

Canadian Renewable and Conservation Expenses

Tax relief for expenditures that qualify as Canadian Renewable and Conservation Expense (CRCE). These expenses are fully deductible for income tax purposes. Such CRCE-eligible expenses can be financed using flow-through shares. Eligible expenses include the costs of feasibility and wind studies, negotiation of power purchase agreements, site approval, site preparation costs, service connection costs and the cost of the test wind turbines.

ecoENERGY for Renewable Power Program

On January 19, 2007, the federal government announced its eRPI program. The 14-year, $1.48 billion program administered by Natural Resources Canada, is intended to encourage the production of 14.3 TWh of electricity production from new eligible renewable power projects to be commissioned between April 1, 2007 to March 31, 2011. The program is anticipated to support approximately 3,000 MW of windpower and 1,000 MW from other renewable sources.

The program will provide an incentive of $0.01 per kWh production over ten years for eligible projects up to a maximum of $80 million per project and $256 million per recipient. eRPI also mandates a maximum Capacity Factor of 35% for onshore windpower projects. The terms and conditions of eRPI require a qualifying project, which would include a wind farm, which has met the requirements of an environmental assessment to reach full capacity and receive engineering approval and certification between April 1, 2007 and March 31, 2011, inclusive, to qualify for the program. Qualifying projects must have a rated capacity of 1MWor greater. Electricity generated from test turbines installed under the CRCE program is not eligible for the eRPI incentive.

Renewable Portfolio Standards

A Renewable Portfolio Standard (“RPS”) is an initiative that requires a minimum percentage of all electricity supplied in a particular jurisdiction to be generated from renewable sources such as wind, solar, biomass and geothermal energy. This regulatory requirement has been implemented in a number of states in the United States including Texas, California, Massachusetts and New York. Eligible renewable electricity generators may generate and sell RECs in such jurisdictions. In certain instances, Canadian wind electricity generators that sell into neighbouring jurisdictions in the United States with an RPS may qualify to sell RECs. The monetary value of RECs varies both within and among jurisdictions. In Canada, the federal and provincial governments are working together to examine how RPSs may work and be implemented in Canada and a number of provincial governments have stated or implemented renewable portfolio targets.