Study of Some Incentive Properties of the Canadian Petroleum Taxation System

摘要

The Canadian National Energy Program have provisions directly affecting the economic behavior of oil and gas companies which are discussed in this report. Only the fiscal regimes that face companies engaged in conventional oil and gas operations in Alberta and in the Canada Lands are studied. Income taxes and royalties are calculated. Deductible allowances, the Petroleum Incentives Program, tax lags and loan financing are dealt with. A consept of marginal tax rates based on a company's decision criteria and executable formulas for marginal tax rates resulting from the Canadian system of petroleum taxation are developed. The areas of Alberta and Canada Lands are treated separately because taxes are calculated differently in the areas. The computer program used for calculating tax rates is presented in an appendix. Some aspects of the Canadian system of petroleum taxation are discussed. The main conclusions are that the tax system leads to domestic companies hold a strong competitive edge against foreign companies. Companies tend to move from Alberta to Canada Lands. Under certain conditions tax exemption rates may easily reach 100%. Generally the tax system is not neutral in the production phase. Improvement in the incentive system could be made. The energy program seem to increase opportunities for Canadian oil companies. (ERA citation 10:017912)