City could benefit from exploratory drilling tax change
MEDICINE HAT, AB — The impact of Wednesday’s federal budget on Alberta’s largest industry is beginning to take shape. The province will receive a one-time payment of $30 million to help with the more than 80,000 orphan wells scattered throughout Wildrose Country, but tax changes around the drilling of exploratory oil and gas wells are also on tap and the city’s new conventional oil drilling program could actually benefit from the change.
Justin Trudeau’s Liberal Government announced in its budget that companies who discover previously unknown petroleum or natural gas reserves will no longer be eligible to deduct, in full, their exploration costs of the first year. It’s a change to an existing tax program that the city doesn’t use says natural gas and petroleum resources general manager Brad Maynes.
“We’ll have potentially less competition,” said Maynes Thursday. “For the programs that we’re pursuing, these would be the types of wells junior start-ups might also be interested in pursuing.”