145/2019

O.C. 374/2019

June 26, 2019

Income Tax Act

Natural Gas Tax Credit Regulation

[Last amended November 7, 2019 by B.C. Reg. 232/2019]

145_2019_pit

Definitions

In this regulation:

Act means the Income Tax Act ;

Compressor Station 2 means the compressor station located at 55° 38' 54.76" north latitude and 122° 12' 30.70" west longitude on the natural gas pipeline known as the Westcoast Transmission System.

[en. B.C. Reg. 232/2019, s. 1.]

Prescribed amount of LNG

1.1

For the purposes of paragraph (

b) of the definition of "major LNG facility" in

section 172 of the Act, the prescribed amount of LNG per year is 2 million tonnes.

[en. B.C. Reg. 232/2019, s. 2.]

Reference point

1.2

For the purposes of the definition of "reference point" in

section 177 of the Act, the prescribed reference point is Compressor Station 2.

[en. B.C. Reg. 232/2019, s. 2.]

Prescribed percentage

For the purposes of

section 173 (4) of the Act, the prescribed percentage is 2.5%.

Pipeline fuel and losses adjustment

2.1

For the purposes of

section 180 of the Act, a corporation's pipeline fuel and losses adjustment, in respect of a major LNG facility and for the month, is the amount determined by the following formula:

pipeline fuel and losses adjustment

volume variance

adjusted LNG facility inlet volume

× 100%

where

volume variance

the amount determined under subsection (2) for the month;

adjusted LNG facility inlet volume

the total of the following:

(

a) the volume of natural gas deemed to have been purchased under

section 178 of the Act by the corporation in the month at an LNG facility inlet meter for the major LNG facility;

(

b) the volume of natural gas disposed of by the corporation in the month at an LNG facility inlet meter for the major LNG facility;

(

c) the volume of natural gas disposed of by the corporation in the month while that natural gas is in the feedstock pipeline that delivers natural gas to the major LNG facility.

For the purposes of the description of "volume variance" in subsection (1), the amount determined for the month is the amount determined by the following formula:

volume variance

feedstock pipeline inlet volume

acquisitions

dispositions

change in inventory

LNG facility inlet volume

where

feedstock pipeline inlet volume

the volume of natural gas owned by the corporation that passes, in the month, through the feedstock pipeline inlet designated in respect of the major LNG facility;

acquisitions

the volume of natural gas acquired by the corporation in the month

(

a) while that natural gas is in the feedstock pipeline that delivers natural gas to the major LNG facility, or

(

b) at an LNG facility inlet meter for the major LNG facility from a person or partnership;

dispositions

the volume of natural gas disposed of by the corporation in the month

(

a) while that natural gas is in the feedstock pipeline that delivers natural gas to the major LNG facility, or

(

b) at an LNG facility inlet meter for the major LNG facility;

change in inventory

the volume of natural gas equal to the volume of natural gas owned by the corporation and in the feedstock pipeline at the end of the month less the volume of natural gas owned by the corporation and in the feedstock pipeline at the end of the preceding month;

LNG facility inlet volume

the volume of natural gas notionally acquired by the corporation at an LNG facility inlet meter for the major LNG facility in the month.

[en. B.C. Reg. 232/2019, s. 2.]

Interest on percentage owing to government

For the purposes of

section 194 (4) of the Act, interest payable to the government

under

Part 13 of the Act must be calculated on a daily basis and compounded monthly.

For the purposes of

section 194 (4) of the Act, the rate of interest prescribed is,

during each successive 3 month period beginning on April 1, July 1, October 1 and January 1 in each year, 3% above the prime lending rate of the principal banker to the Province on the 15 th day of the month immediately preceding that 3 month period.

Interest on tax refunds

Interest payable under

section 197 (2) of the Act must be calculated on a daily basis and compounded monthly.

For the purposes of

section 197 (2) of the Act, the rate of interest prescribed is, during each successive 3 month period beginning on January 1, April 1, July 1 and October 1 in each year, 2% below the prime lending rate of the principal banker to the Province on the 15 th day of the month immediately preceding that 3 month period.

Reference price

In determining the reference price for the purposes of

section 180 of the Act, the minister charged with the administration of the Petroleum and Natural Gas Act must consider the monthly Natural Gas Exchange Inc.'s NGX AB-NIT natural gas price indices that relate to any period in the month.

[Provisions relevant to the enactment of this regulation: Income Tax Act , R.S.B.C. 1996, c. 215, s. 213.