Americas News
Canada Gives Tax Breaks to Jumpstart LNG Sector
The Canadian government has announced that it will grant tax breaks to potential liquefied natural gas (LNG) terminals in British Columbia in an an attempt to hasten the province's burgeoning LNG sector, The Globe and Mail reports.
The tax breaks will be tied to asset depreciation rates, and are aimed at spurring final investment decisions among the 19 proposed terminals on the Canadian west coast.
“The government of Canada is delivering on its goal to diversify and grow Canada’s energy exports,” said Michael Culbert, president of the proposed Pacific NorthWest LNG project, which is backed by Malaysia's state-owned Petronas.
“Pacific NorthWest LNG has the potential to generate over $1 billion in tax revenues to all levels of government each year.”
In a speech made last week, Prime Minister Stephen Harper said that the overall hit to federal tax revenues resulting from the breaks would be "modest," with the incentives also helping to prompt investments that otherwise wouldn't occur.
“The change the federal government has made is going to be a big help in making sure LNG companies get to that final investment decision,” British Columbia Premier Christy Clark said.
“To the extent this makes it an easier environment for investment, that’s really good.”
It was reported as early as 2013 that Canadian oil and gas developers were pushing for tax relief to jumpstart the country's LNG industry, with media at the time reporting that industry groups were looking for up to $2 billion in tax breaks.
