In addition to rising costs, industry’s challenges are compounded by the recent decline in the price of oil and gas Although most financial firms foresee oil settling into a range between $60 and $65 US a barrel over the course of 2015, right now the price of the North American benchmark is in the high to mid-$40 range. The price of oil has declined by 50 per cent since June 2014, and most analysts do not expect prices to recover substantially before the end of Q2.
The implications for the oil and gas industry and the Alberta economy are substantial: according to TD bank, Ontario is now poised to lead Canada in economic growth in 2015 (2.5 per cent), followed by B.C. (2.4 per cent) and AB (2.3 per cent). With some forecasts suggesting the prospect of a recession for the province.
In response to these challenges, CAPP is seeking to work with the provincial government to advance priorities that increase economic competitiveness without imposing additional costs on government.
Scientific Research and Experimental Development (SR&ED) Tax Credit:
- Remove the annual SR&ED expenditure limit in Alberta, similar to the B.C. approach
- Allow corporate partners of a partnership to claim their respective share of the Alberta SR&ED tax credits
- Conduct a review of the Alberta SR&ED program as it pertains to competitiveness with other provincial R&D programs, the economic and productivity benefits of the program and its administrative efficiency
- Prioritize economic competitiveness as part of the municipal government act review process
- Re-introduce a linkage between the residential and non-residential property tax rates in rural and specialized municipalities, and consider 1.33 to 2.00 as the starting range
- Freeze rate ratios for rural and specialized municipalities already above the threshold to recognize existing practice and budget constraints
- Establish a formal requirement for rural and specialized municipalities to consult with the major non-residential assessment base representatives in the municipality prior to raising non-residential to residential tax rate ratio
- Adopt a province-led approach for assessing industrial facilities. This would serve to enhance independence, give assurance that assessments are free of municipal influence, and would promote consistency in the application of provincial legislation