Pre-budget: Accelerated capital cost allowance for oilsands

In October, Amy Taylor, director of the Pembina Institute's Ecological Fiscal Reform Program, presented before the Standing Committee on Finance. This written brief was submitted to the committee in advance of the presentation. The brief calls for the elimination of the 100% accelerated capital cost allowance for oilsands. This significant tax break has cost Canadian's potentially billions in foregone tax revenue. It was established to overcome barriers related to high capital costs and to spur oilsands developments in the mid-1990s when the price of oil was much lower. Since that time, the price of oil has increased, capital expenditures have sky-rocketed and production has grown. This tax break is no longer justifiable and should be eliminated. The oilsands should be put on a level playing field with conventional oil and natural gas and the money saved by eliminating this subsidy should be used to transition to a sustainable energy future.