Royalty program stimulates job creation for 14th time

Credit: Government of British Columbia

Credit: Government of British Columbia

The Province has approved $115 million in royalty deductions that will create jobs and support the construction of 14 infrastructure projects in northeastern B.C.

For the 14th time since its inception, royalty deductions will be provided under B.C.’s Infrastructure Royalty Credit Program (IRCP), designed to facilitate the construction of new resource roads and pipelines. This infrastructure improves B.C.’s liquefied natural gas (LNG) opportunity by expediting development and creating access to the province’s unexplored resource areas.

Royalty revenue for government will also increase as a result of new drilling activities. Five years from now, the 2015 royalty deductions are expected to generate approximately $288 million in revenue for the province.

“British Columbia’s royalty credit program supports economic stability and improves the competitiveness of the province’s natural gas sector by leveraging investor capital. New infrastructure improves our positioning in the global marketplace by expediting development and our capacity to supply natural gas for export,” said Rich Coleman, Minister of Natural Gas Development.

The 2015 program is also expected to result in over $448 million in new capital spending by industry. Of this total, over $224 million are expected to reach service-sector companies in B.C., creating more than 2,100 new jobs.

The first instalment of the IRCP occurred in 2004. Since then, the program has supported the development of over 200 resource road and pipeline projects. This represents more than $2.5 billion in private-sector capital investment.

British Columbia’s LNG industry continues to make strides alongside the growth taking place in the natural gas sector. There are currently 20 LNG proposals at various stages of development in B.C. If five LNG plants are constructed, up to 100,000 jobs could be created.

The IRCP is unique to B.C., and keeps the province’s natural gas sector competitive by attracting investment and facilitating growth. B.C.’s LNG export opportunity relies on the exploration and production activities – known as upstream development – happening in northeastern B.C.

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