Canada unveils new tax measures to boost LNG investment: PM

Published Thu, Feb 19, 2015 · 11:28 PM

[OTTAWA] Canada is introducing substantial new tax measures that will allow investors in new liquefied natural gas facilities to recover their costs more quickly, Prime Minister Stephen Harper said on Thursday.

Mr Harper told a televised news conference in British Columbia that the tax relief would encourage investment in the LNG industry and boost employment.

The measures could help companies move forward with stalled developments in Canada, even as they cut spending around the world in response to plummeting oil prices. "The business of shipping natural gas is capital intensive. The bar for entry is high," Mr Harper said.

Ottawa will establish a capital cost allowance rate of 30 per cent for equipment used in natural gas liquefaction and 10 per cent for buildings at a facility that liquefies natural gas, Mr Harper announced.

LNG facilities in Canada can currently write off 8 per cent of their total capital investment each year.

Mr Harper said the tax relief would be available for capital assets acquired after Feb 19 this year and before 2025.

Last week, Reuters revealed that the government was studying the idea of new tax breaks in the upcoming budget for companies that build LNG plants.

More than a dozen LNG terminals have been proposed in Canada, mostly in the West Coast province of British Columbia. Backed by energy giants like Malaysia's Petronas, Royal Dutch Shell and Chevron Corp. The projects would ship cheaper North American gas to Asian markets.


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