The Government of British Columbia will attract new, long-term investment in the natural gas and oil sector by expanding the Province’s Infrastructure Royalty Credit Program (IRCP) for three years.
By offering $120 million in royalty credits annually for the next three years, the Province is providing companies with a longer timeframe to work new capital expenditures into their plans. Expanding the program will help to create certainty and improve the Province’s ability to attract new investment given the economic conditions facing industry due to lower natural gas and oil prices.
The three-year allocation of the program was first announced as part of the provincial budget and three year fiscal plan on Feb. 16, 2016.
All other aspects of the IRCP remain unchanged. A company must fully fund and complete an approved infrastructure project before it can apply to recover up to 50% of the project’s costs. This approach uses a portion of royalty revenue collected to support development without a direct expense to government.
Companies can apply for the latest installment of the IRCP until April 15, 2016. As in previous years, applications will be ranked according to their potential benefits, with approval going only to the projects demonstrating the highest economic advantage to British Columbia.
The Request for Applications information can be found at:
Minister of Natural Gas Development Rich Coleman –
“By offering our infrastructure program in three-year instalments, we are able to support longer-term planning and attract the investments we still need to help our natural-resource sector grow at the very same time companies are carefully managing their capital.”
- This will be the 15th instalment of the Infrastructure Royalty Credit Program.
- Since 2004, the program has attracted private-sector investment into new or upgraded roads and pipelines by providing royalty deductions to companies who build the infrastructure. In previous years, the program was announced and made available on single-year instalments exclusively.
- Last year’s instalment of the IRCP is supporting the construction of 14 infrastructure projects – development that is expected to result in over $448 million in new capital spending and over 2,000 jobs.
- The IRCP prompts year-round activity and creates jobs by providing an incentive to invest in natural gas infrastructure – development that has helped the sector grow and attract interest from global companies looking to build a liquefied natural gas industry in B.C.
- To date, over 200 new or upgraded all-season roads and pipeline projects have been built as a result of the IRCP – a total capital investment of more than $2.5 billion.
Details about the Infrastructure Royalty Credit Program, including the 2016 Request for Applications and information about previous instalments, can be found at:
For more information on British Columbia’s royalties and royalty programs:
Further details about British Columbia’s growing LNG industry can be found at: http://engage.gov.bc.ca/lnginbc/
A backgrounder follows.