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

Choir leader’s selfless work wins her Castlegar Citizen of the Year

Christina Nolan has grown the community choir into a strong and vibrant asset for the city

Water main maintenance ongoing in South Castlegar and Blueberry

Project will take two weeks — city says there should not be any service disruptions

Downtown businesses want you to love them this weekend

Third annual event encourages people to shop in their own community.

Police investigating man’s death in Winlaw

Foul play not established, but major crimes unit is investigating

Grand Forks woman assaulted in home invasion

The incident took place Wednesday morning

VIDEO: Protesters in Penticton gather to rally against sleeping-on-sidewalk bylaw

The proposed bylaw would outlaw sitting or lying on the city’s downtown sidewalks

Raptors beat Bucks 100-94 to advance to franchise’s first-ever NBA Finals

Leonard has 27 points, 17 boards to lead Toronto past Milwaukee

Third person charged in death of B.C. teen Bhavkiran Dhesi

Inderdeep Kaur Deo facing charge of accessory after the fact to murder

Kootenay man arrested and charged in 2015 murder

Nathaniel Jessup 32 of Creston has been charged with the second-degree murder of Katherine McAdam and offering an indignity to a body.

Kamloops girl, 9, recovering from carbon monoxide poisoning now out of ICU

Her mother who was sleeping in the same tent with her did not survive

‘I think he’s still alive’: B.C. mom pleads for help finding son last seen a month ago

Family offering $5,000 reward for information leading to the safe return of Tim Delahaye

New poll suggests one-third don’t want politicians to wear religious symbols

Local politicians shouldn’t be allowed to wear hijabs, crucifixes or turbans on the job, survey suggests

Raptors fans far from home adjust plans to watch pivotal playoff game

Raptors currently lead the playoff series 3-2, and a win Saturday would vault them into NBA finals

Five takeaways from the Court of Appeal ruling on B.C.’s pipeline law

It’s unclear how many tools are left in B.C.’s toolbox to fight the project

Most Read