The government of British Columbia is providing $120 million in credits to encourage new oil and gas infrastructure development and job creation.
The credits will be provided as part of the Infrastructure Royalty Credit program. The program provides companies with royalty deductions in exchange for industry investment in road and pipeline infrastructure. Companies are required to fund the entire cost of an approved infrastructure project, and may receive up to 50 per cent of the eligible project costs from the Province paid in the form of royalty deductions once the project is completed.
Here are some facts about the program:
- This is the 12th instalment of the Infrastructure Royalty Credit program. Since 2004, the Province has allocated a total of $840 million in royalty credits to approved infrastructure projects.
- The Infrastructure Royalty Credit Program is responsible for the development of 82 new or upgraded all-season roads and 133 pipeline projects in B.C. These projects represent a new total capital investment of more than $1.7 billion.
- The selection process focuses on applications for new projects - projects that would not occur without the incentive of royalty credits. A Request for Applications is issued and are carefully evaluated. Projects are ranked according to the potential benefits each offers.
- Historically, the Infrastructure Royalty Credit program generates about $2.50 in incremental royalties for every dollar awarded in credits. In five years, this is expected to generate a return in net new incremental royalties of approximately $300 million.
- The Infrastructure Royalty Credit Program is unique in North America, and has been vital for ensuring that B.C. remains competitive relative to other North American jurisdictions in attracting investment for oil and gas development and jobs for regional economy.
Ministry of Energy, Mines and Natural Gas