Federal Government Proposes LNG Tax Break

Last week, we reported that the federal government was considering a proposal to provide a significant tax break to proposed LNG plants in British Columbia.

The Prime Minister has now confirmed, in a speech today in Surrey, that the government intends to amend the Income Tax Act regulations to provide for accelerated depreciation for LNG facilities.

The announced rates are 30% depreciation for equipment used in natural gas liquefaction (including controls, cooling equipment, compressors, pumps, storage tanks, and ancillary equipment, pipelines used exclusively to transport liquefied natural gas from the facility, and related structures), and 10% for buildings at a facility that liquefies natural gas.