Spectra Energy natural gas processing plant near Fort Nelson, part of B.C.’s extensive gas resources seeking additional markets via LNG exports. (Black Press files)

B.C.’s natural gas taxes deter new investment, study says

Fifth highest among energy producing regions in North America

B.C.’s tax rate on new natural gas investments was 31.9 per cent in 2018, higher than all other provinces except Saskatchewan, says a new study by University of Calgary economist Jack Mintz.

The detailed tax and resource royalty comparison comes as B.C. prepares for construction of its first liquefied natural gas export facility at Kitimat, entering into the fiercely competitive international market for LNG and pipeline gas.

“Developing B.C.’s natural gas resources has been a priority for successive provincial governments, and yet its tax rate on new natural gas investments is highly uncompetitive with neighbouring and competing jurisdictions,” said Mintz, who calculated the effective tax rates in a study for the Fraser Institute.

The study compares the “marginal effective tax and royalty rate,” including corporate income taxes, sales taxes on capital purchases, capital taxes, transfer taxes, profit-based resource levies and royalties on natural gas and oil.

The calculations found B.C.’s overall tax and royalty rate is second highest in Canada, nearly five percentage points higher than the Canadian average of petroleum-producing provinces, Alberta, B.C., Saskatchewan, Newfoundland and Labrador and Nova Scotia. It also compared the 10 highest producing U.S. states, Alaska, Arkansas, California, Colorado, Kansas, Louisiana, Mississippi, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, West Virginia and Wyoming.

READ MORE: B.C. NDP offers tax breaks to jumpstart LNG Canada

READ MORE: B.C. Greens oppose LNG Canada deal, call it ‘giveaway’

The B.C. NDP government reduced taxes on LNG development in 2018, prompting the Shell-led LNG Canada consortium to green-light their $40 billion investment in an LNG plant and the Coastal Gaslink pipeline from gas fields in the Dawson Creek area to the coast.

Those tax breaks include removal of an LNG income tax from export revenues and an exemption on provincial sales tax for construction.

The study took into account Canadian government changes to accelerate depreciation tax measures for energy investment in November 2018.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Delta mosque part of open-house effort launched in wake of New Zealand shootings

The ‘Visit a Mosque’ campaign aims to combat Islamophobia

White Rock dog poop conspiracy picks up steam

Opponent says theory is a ‘load of crap’

Surrey MLA slams NDP poverty reduction strategy plan

Liberal MLA Marvin Hunt says the NDP’s poverty reduction plan is ‘underwhelming’

Father thanks Surrey Mountie for shooting hoops with kids, ‘changing perspectives’

‘We’re just like everyone else,’ says Surrey officer who stopped to play basketball with kids

Noted Spanish guitarist in Surrey with VSO and Rodrigo’s ‘beautiful concerto’

‘I love playing it,’ Pablo Sáinz Villegas says of famous composition ahead of Bell concert date

Five highlights in the 2019 federal budget

Latest budget includes a sprinkling of money for voters across a wide spectrum

Facebook to overhaul ad targeting to prevent discrimination

The company is also paying about $5 million to cover plaintiffs’ legal fees and other costs

Teacher reprimanded after incident with Grade 11 student in school gym

Gregory Norman Brock was teaching at a high school in the Maple Ridge-Pitt Meadows School District

Explosives unit brought in after suspicious boxes left at B.C. RCMP detachment

Nanaimo RCMP issues all clear after packages were found on lawn earlier in the day

Avalanche control tomorrow on Highway 1

Expect closures of up to two hours east of Revelstoke

Newfoundland man caught after posting photo of himself drinking and driving

The 19-year-old took a photo of himself holding a beer bottle and cigarette while at the wheel

2019 BUDGET: As deficit grows, feds spend on job retraining, home incentives

Stronger economy last year delivered unexpected revenue bump of an extra $27.8 billion over six years

Carfentanil found in 15% of overdose deaths in January: B.C. coroner

Carfentanil is 100 times more powerful than illicit fentanyl and used to tranquilize elephants

Kids found playing darts with syringes in Vancouver Island park

Saanich police is urging people to throw out their syringes properly and safely

Most Read