Canadian PM defends oil sands tax breaks
Source: Reuters
(New with quotes from prime minister) By Randall Palmer OTTAWA, Dec 14 (Reuters) - Conservative Prime Minister Stephen Harper was at odds with opposition parties on Thursday over whether to restrict tax benefits for the burgeoning oil sands industry in order to curb greenhouse gas emissions. The new leader of Canada's opposition Liberal Party, Stephane Dion, told reporters he wanted to limit accelerated tax write-offs for the oil sands sector in Alberta. The smaller New Democratic Party had said Harper must get rid of what it called oil sands subsidies as a price for its support. But Harper was clearly not prepared to limit the write-offs for oil sands, particularly after having slapped new taxes on income trusts, many of which are in the oil and gas industry, on Oct. 31. "That obviously had a significant impact on the energy sector. I think it would be asking a bit much to target the energy sector for tax hikes in that manner," he said. "Obviously we'll look at all options but ultimately we have to be fair. All industries have to play their part in regulating greenhouse gases." Dion, slightly ahead of Harper in the polls for an election widely expected next year, says he wants Canada to fulfill its obligations under the Kyoto Protocol on climate change, which calls for deep cuts in the country's spiraling emissions. Green activists and the leftist New Democrats want the government to end what they call massive tax breaks to the oil and gas industry, particularly in the energy-rich western province of Alberta. "We will revisit the oil and gas tax regime to be sure it will be fair and competitive and also effective for greenhouse gas reductions and for the competitiveness of the economy," Dion said. The accelerated cost allowance was brought in by the previous Liberal government to help the industry in its early days but it is now moving ahead full throttle. "I'm saying that we will revisit it completely and if they (the companies in the oil sands) want to have it back ... they will need to come with zero-emission projects and (plans) to use three times less water, let's say," he said. "Through that we'll change our country for good. Instead of having an economy based on waste we'll have an economy based on recycling, the best environmental technologies available, the best clean coal technologies, carbon dioxide capture and storage." Harper said Ottawa cannot meet its Kyoto target without devastating the economy. Emissions are 35 percent above the level would have to be achieved by 2012. The prime minister, who is from Alberta and has his strongest support there, charged that the other parties would unfairly penalize his province. "It's easy for some of the other parties...to say Albertans should pay all the taxes in the country, but you know, I think we have to be a little bit fairer than that," he said. (Additional reporting by David Ljunggren)
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