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Canada offers tax relief to boost LNG sector

The Canadian government is providing tax breaks to encourage investment in LNG projects
Canada offers tax relief to boost LNG sector

The Canadian Gas Association (CGA) welcomed the Canadian government's plans to establish new Capital Cost Allowance (CCA) rates to help support investment in liquefied natural gas (LNG) facilities in Canada.  

The Federal Government announced that it intends to establish a capital cost allowance rate of 30% for equipment used in natural gas liquefaction and 10% for buildings at a facility that liquefies natural gas. This investment support will be available for capital assets acquired after February 19, 2015, and before 2025.  

"LNG, a clean and affordable energy solution, has just become a much more realistic option for a number of domestic markets including northern and remote communities and the transportation sector," said Timothy M. Egan, president and CEO of the Canadian Gas Association. "The natural gas distribution industry is highly supportive of this Federal Government tax measure that will help support new LNG facility investments and expansions in Canada, supporting jobs and growth.”   

Natural gas utilities have been operating LNG facilities for over 40 years in Canada.  LNG can be produced and transported in storage tanks to a regasification facility located near large industrial facilities (like mines) or communities where it can be used for heat or to generate power. LNG can also be used as a clean and affordable transportation fuel choice for truck, rail, marine, and off road transportation operators.   "Today, well over 20 million Canadians benefit from the safe, clean, reliable, and affordable energy service that natural gas utilities provide using abundant natural gas. This tax measure will go a long way towards ensuring that even more Canadians have that energy choice.  The Government of Canada announcement will support industrial development, driving environmental performance, and reducing energy costs for Canadian homes, businesses, and institutions," said Egan.

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