Finance Minister Jim Flaherty delivered the Harper government’s 2012 budget today, mixing together austerity measures, pension reforms, and the end of the penny.
For the energy and resources sectors, there are a number of highlights in the budget, most significantly the setting of limits on the time for environmental review of major projects.
The budget speech cited a need to cut through a "complex maze" of rules and “long and unpredictable” approval processes, and stated the government’s commitment to ensure that needed pipeline infrastructure is built to access Asian markets. Accordingly, new rules will limit review processes for pipelines to 18 months. Mining projects will be limited to two years, and all other approvals would be limited to a one year review period. In addition, Flaherty reaffirmed the government’s commitment to “one-project, one-review”, likely limiting the scope of federal review of projects already undergoing a provincial review.
Other energy and resources highlights include
- Improvements to oil tanker safety, including stronger vessel inspection requirements and improved emergency preparedness ($35.7M)
- Trade measures to support the energy industry, including continuing to advance recently announced free trade negotiations with Japan and exploring freer trade with other Asian nations
- Expanding the eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of bioenergy equipment. An expanded Class 43.2, which depreciates at 50% per year, would include such equipment as waste-fuelled space and water heaters, waste-fuelled district energy, and equipment that uses plant residue such as straw to generate electricity and heat
- $13.5m to the National Energy Board to increase the inspection of oil and gas pipelines
- Continuing the Aboriginal Skills and Employment Training Strategy, in recognition of the severe labour shortage faced by the energy and resources industries
- Following concern that some of the opposition to major resources projects is funded by illegitimate charities, the government is dedicating $8m per year to the Canada Revenue Agency to “ensure that charities devote their resources primarily to charitable, rather than political, activities”
- $47m to the Northern Pipeline Agency, tasked with the development of the Alaska Pipeline
- Spending $107M to ensure a stable supply of medical isotopes from Atomic Energy of Canada and maintain safe and reliable operations at the Chalk River reactor, and providing $8m per year to fund the licensing function of the Canadian Nuclear Safety Commission
- $8m to fund the cleanup of low-level radioactive waste in Port Hope and Clarington, Ontario
- $1m to update mine effluent regulations
- $50 million over two years to implement the Species at Risk Act.
- Extending the 15% mineral exploration flow-through tax credit
- Improving access to offshore seismic resource information
- Renewal of the Diamond Valuation and Royalty Assessment program
- Tariff relief, including the elimination of the 5% duty on certain imported oils and electricity
- The extension of Export Development Canada’s temporary domestic lending powers
- Phasing out the 10% Atlantic Investment Tax Credit on the oil, gas and mining sectors in Atlantic Canada