MEDICINE HAT — An oil and natural gas industry association is pressing Ottawa to develop an economic stimulus package aimed at boosting drilling activity in Western Canada.
The Small Explorers and Producers Association of Canada is calling on the Conservative government to reform federal tax write-offs for drilling projects.
Currently, companies can deduct 100 per cent of the federal taxes they incur from drilling over a three-year period after the wells have been punched.
However, the precipitous drop in drilling activity this year, led by low natural gas prices, has prompted the association to ask Ottawa to refund taxes on drilling after only 12 months.
Gary Leach, association’s executive director, says the measure would encourage energy companies to boost drilling activity, creating jobs across Western Canada.
“The cost to the government is going to be nil,” Leach said Thursday. “This is not like the Ontario bailout, where the government put billions into General Motors and Chrysler to save a few thousand jobs.
“We’re just asking them to leave some money in the pockets of the private sector and let us put it to work creating jobs.”
Leach said the initiative has been gaining support among Alberta Conservative members of Parliament and the industry also appears receptive to the idea.