Companies investing in capital assets for the liquefied natural gas industry can expect tax breaks to kick in immediately, according to Stephen Harper.
The prime minister announced Thursday (February 19) Ottawa is offering a capital cost allowance rate of 30% for equipment used in the LNG sector and 10% for any buildings that go up at a facility that liquefies natural gas.
Harper, who was appearing at Kwantlen Polytechnic University’s Surrey campus, said the tax breaks would apply to any assets acquired as of Thursday. The tax relief would extend until 2025.
The cuts are expected to reduce federal corporate income tax revenues by less than $50 million, up until 2020.
“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,” Harper said in a statement. “Through our ambitious trade agenda, we are opening new markets for Canadian businesses and developing the infrastructure to transport Canadian products to new markets, which is essential for Canada’s future prosperity and security.”
B.C.’s LNG sector has been in a state of uncertainty recently as the fall in oil prices have made liquefied natural gas less lucrative for companies to invest in.
In December, oil giant Petronas announced it was deferring its final investment decision on the $36-billion Pacific NorthWest LNG plant in Prince Rupert.