Possible new LNG tax breaks in Canada’s federal budget
Companies building LNG export terminals in Canada could be looking at new tax breaks.
According to Reuters, the government of Canada is looking into the possibility of providing new tax brakes, which could help companies progress stalled developments in the country despite cutting costs due to the oil plunge.
Global heavy hitters like Petronas, Chevron or Royal Dutch Shell have all proposed projects in Canada’s province of British Columbia and noted that costs of these developments are rather high.
In order to speed up development, the Canadian Association of Petroleum Producers urged Ottawa to change the current classification of LNG facilities. It proposed the LNG export plants to be classified as manufacturing assets which would allow them to write off 30 to 50% of their capital investment per year. Currently, LNG export plants can write off 8% of capital investment.
CAPP’s proposal has been examined by the Natural Resource department’s energy sector, but it is not certain that the proposal would be accepted this time, as it was already rejected twice before.
LNG World News Staff; Image: Pacific NorthWest LNG