Brian Zinchuk is editor and owner of Pipeline Online
OTTAWA – The federal government’s 2022 budget released on April 7 intends on killing off one of the more attractive ways of financing oil and gas development – the flow-through share. They call it an “inefficient fossil fuel subsidy.”
Here’s what the budget says:
Phasing Out Flow-Through Shares for Oil, Gas, and Coal Activities
The federal government committed to phase out or rationalize inefficient fossil fuel subsidies—and has recently accelerated the previous timeline for doing so from 2025 to 2023.
- Budget 2022 proposes to eliminate the flow-through share regime for fossil fuel sector activities. This will be done by no longer allowing expenditures related to oil, gas, and coal exploration and development to be renounced to flow-through share investors for flow-through share agreements entered into after March 31, 2023.
This measure is expected to increase federal revenues by $9 million over five years, starting in 2022-23.