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

Two individuals arrested who the Vanderhoof RCMP say are allegedly linked to B&E’s and thefts in the community

A long chase ensued where the accused fled from the police twice, and tried to get away on stolen Kayaks

Precipitation levels low for the month of June

Both June and July have seen low to average precipitation levels in comparison to last year, says meteorologist

CN train derailment cleared between Terrace and Prince Rupert

The CN mainline is now open, following a train derailment mid-way between… Continue reading

Nechako Valley Otters bringing home multiple medals from swim meets

The next meet for the Nechako Otters is on July 21 and 22

State of local financial crisis declared in Fort St. James

The District will have a job fair on July 31 to help workers find transitioning jobs

VIDEO: Young couple found dead in northern B.C. had been shot, police say

Chynna Noelle Deese of the U.S. and Lucas Robertson Fowler of Australia were found along Highway 97

VIDEO: Man found dead near B.C. teens’ truck could be linked to a double homicide

RCMP said they are looking for Kam McLeod, 19, and Bryer Schmegelsky, 18, of Port Alberni

Latest plan is to fly trapped fish by helicopter over Big Bar slide

Multi-pronged plan set in motion to freesalmon blocked by landslide in the Fraser River

Family of missing B.C. senior with dementia frustrated with situation, heartened by community support

Nine days since Grace was last seen the question remains: ‘How can an 86-year-old just disappear?’

Unsealed record suggests U.S. man convicted of murdering Vancouver Island couple left DNA on zip tie in 1987

William Talbott is set to be sentenced Wednesday in the murders of Jay Cook and Tanya Van Cuylenborg

Coast Tsimshian sign historic stewardship agreement

Lax Kw’alaams and Metlakatla plan to work as one to preserve traditional lands

Okanagan Air Cadet challenges gender-exclusive haircut policy

Haircut regulation inspires challenge around gender identity

VIDEO: Bystander training gains traction as tool to prevent sexual harassment, violence

Julia Gartley was sexually assaulted after an event, and no one stepped in to help

Two brands of ice cream sandwiches recalled due to presence of metal

The Canadian Food Inspection Agency issued a recall on Iceberg and Originale Augustin brands

Most Read