Canada Increases Tax Incentives For Natural Gas Production
Reuters reported late last week that Canada will soon implement a new tax incentive for natural gas exploration and production. Canada is increasing the capital cost allowance rate from eight percent to 30 percent for capital assets acquired after Feb. 19, 2015 and until 2025. The rate for buildings where natural gas is liquefied will increase from six percent to 10 percent.
The Canadian Association of Petroleum Producers (CAPP) told Reuters, “This tax classification change actually puts Canadian LNG facilities on a more level playing field with our international competitors. And that's going to improve our competitiveness for those scarce dollars.”
Canadian Prime Minister Stephen Harper said, “Our government is committed to providing the right conditions so that industries and businesses can succeed and compete in the global economy, by lowering taxes, cutting red tape and encouraging entrepreneurship. Today’s announcement builds on our low tax plan for jobs and growth, strengthening the already strong case for business investment in Canada.”