Alberta offering $1.1 billion tax credit to companies through Petrochemical Diversification Program

Oct 25 2019, 10:22 am

The Province of Alberta is planning to give $1.1 billion in royalty credits to companies through the Petrochemicals Diversification Program.

In an effort to see methane and propane feedstocks harnessed for the creation of plastics, fabrics, fertilizers, and more, the government is incentivizing companies to create facilities that will do just that.

A full $150 million has already been confirmed for these royalty credits, and a release from the province states that $1.1 billion will be given out in total by the end of phase two of the program.

“Albertans elected our government to fight for our energy sector and get Albertans back to work,” Minister of Energy Sonya Savage said in the release.

“We promised Albertans that we would respect agreements made under the Petrochemicals Diversification Program and look at extending the royalty tax credit model to incent future projects.”

Applications from companies have already been submitted, though the confirmation process had to be put on hold until the full $1.1 billion could be secured. The government will now begin considering applications for the royalty credits.

“Downstream chemical and petrochemical production and operations are a significant contributor to Alberta’s economy, and the sector continues to play an important role in attracting investment to Alberta,” said Associate Minister of Natural Gas Dale Nally in the release.

“We’re acting on the Natural Gas Advisory Panel’s recommendation to encourage petrochemical development, and I’m confident this program will further restore Alberta’s reputation with investors as a good place to do business.”

The same release also noted that the province has discontinued the Petrochemicals Feedstock Infrastructure Program and the Partial Upgrading Program, citing a higher financial risk due to relying on loans and grants.

It has also ended its request for proposals on refinery projects.