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.

BC legislature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

COVID-19 cases identified in Kelowna, after public gatherings

Those who were downtown or at the waterfront from June 25 to July 6 maybe have been exposed to COVID-19.

COSAR and Kelowna RCMP rescue couple lost at James Lake

The rescue occurred Saturday, July 11

QUIZ: Are you ready for a summer road trip?

How much do you really know about roads, motor vehicles and car culture? Take this quiz to find out.

Okanagan sisters-in-law sleep out successful

Kiley Routley and Heidi Routley raise nearly $2,400 and awareness for youth homelessness

Beverly Hills 90210 star’s family selling Vancouver Island Beach Resort

You can own Jason Priestley’s Terrace Beach Resort in Ucluelet for less than $5 million

Genetic detectives begin work to trace spread of COVID-19 in Canada

The kinds of genetic technology being used for this project did not exist when SARS hit Canada in 2003

Sports fishers protest Fraser River Chinook closures

Public Fishery Alliance wants hatchery fish open for harvest

COVID-19: Homeless to be relocated from temporary Okanagan shelter

Homeless shelters in Vernon have been combined into one site at the curling rink since April

Dozens of fish die at popular lake near Chase

A few natural phenomena are possible causes for their deaths.

Amber Alert for two Quebec girls cancelled after bodies found

Romy Carpentier, 6, Norah Carpentier, 11, and their father, Martin Carpentier, missing since Wednesday

B.C. man prepares to be first to receive double-hand transplant in Canada

After the surgery, transplant patients face a long recovery

Most Read