Canadian Manufacturing

LNG projects in B.C. looking for federal tax breaks, report claims

Four LNG proponents allegedly want their terminal projects treated as manufacturing operations to gain tax concessions

September 15, 2014  by The Canadian Press

TORONTO—Players behind major liquefied natural gas (LNG) projects in British Columbia are lobbying Ottawa for tax relief, according to a new report.

The Toronto-based Globe and Mail newspaper reports that the newly formed B.C. LNG Developers Alliance, representing four of the largest proponents of LNG exports from the West Coast, want their planned multi-billion-dollar terminals treated as manufacturing operations to gain tax concessions.

The Globe says the alliance is arguing that it is in the national interest to launch sales to Asia, and reduce Canada’s dependence on energy exports to the United States.

The alliance sent a letter recently to the House of Commons Standing Committee on Finance, hoping that Ottawa will move on the idea when the next federal budget is tabled by the end of March.


LNG export plants are viewed under existing Canadian rules as distribution businesses with less favourable tax treatment than manufacturers.

The alliance’s four members are Kitimat LNG, the Pacific NorthWest LNG project led by Malaysia’s state-owned Petronas, Shell Canada Ltd.-led LNG Canada and BG Group plc’s Prince Rupert LNG.

The Canadian units of Chevron Corp. and Apache Corp. co-own Kitimat LNG, though Apache will be exiting the joint venture, leaving Chevron to find a new partner.

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