Bill C-221: An Act to amend the Income Tax Act (oil and gas wells)

Bill C-221 If you have any questions or comments regarding the accessibility of this publication, please contact us at [email protected]. First Reading LEGISinfo Bilingual view XML PDF Skip to Document Navigation Skip to Document Content ENGLISHSUMMARYSUMMARY1 Short Title1 Short Title2 Income Tax Act2 Income Tax Act3 Report to Parliament3 Report to Parliament First Session, Forty-third Parliament, 68-69 Elizabeth II, 2019-2020 HOUSE OF COMMONS OF CANADA BILL C-221 An Act to amend the Income Tax Act (oil and gas wells) FIRST READING, February 25, 2020 NOTE 2nd Session, 43rd Parliament This bill was introduced during the first session of the 43rd Parliament. Pursuant to the Standing Orders of the House of Commons, it is deemed to have been considered and approved at all stages completed at the time of prorogation of the first session. The number of the bill remains unchanged. Mrs. Stubbs 431062 SUMMARY This enactment amends the Income Tax Act to establish a tax credit for the closure of oil and gas wells. It also sets out a requirement for the Minister of Finance to make an assessment respecting the implementation of possible tax incentives for the closure of oil and gas wells. Available on the House of Commons website at the following address: www.ourcommons.ca 1st Session, 43rd Parliament, 68-69 Elizabeth II, 2019-2020 HOUSE OF COMMONS OF CANADA BILL C-221 An Act to amend the Income Tax Act (oil and gas wells) Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: Short Title Short title 1 This Act may be cited as the Environmental Restoration Incentive Act. R.‍S.‍, c. 1 (5th Supp.‍) Income Tax Act 2 (1) The Income Tax Act is amended by adding the following after section 125.‍6: Definitions 125.‍7 (1) The following definitions apply in this section. closure of an oil or gas well means, in respect of an oil or gas well in Canada, the measures taken in accordance with federal laws or the laws of the province in which the oil or gas well is located to plug and cap the well to prevent leaks, to dismantle the surface structures and associated infrastructures, and to restore the surface to its previous condition. (fermeture d’un puits de pétrole ou de gaz) qualifying corporation means a corporation that owns one or more oil or gas wells in Canada which, for a taxation year, produced on a daily average a total quantity of oil or gas that is less than 100,000 barrels of oil equivalent. (société admissible) Closure of oil or gas well tax credit (2) There may be deducted from the tax otherwise payable under this Part by a qualifying corporation for a taxation year an amount equal to the qualifying corporation’s general rate reduction percentage for the taxation year (within the meaning assigned by subsection 123.‍4(1)) multiplied by the total of all expenses incurred by the qualifying corporation in that taxation year for the closure of an oil or gas well. (2) Subsection (1) applies in respect of expenses incurred after 2019 and before 2026. Report to Parliament Assessment — tax incentives 3 (1) Within one year after the day on which this section comes into force, the Minister of Finance, in collaboration with the Minister of Natural Resources, must assess whether the implementation of a tax incentive, including a flow-through shares program, would increase private sector funds available to close oil or gas wells, reduce the risk of oil or gas wells becoming orphaned and promote the safe and effective closure of oil or gas wells. Tabling (2) The Minister of Finance must prepare a report on the assessment and cause it to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the report is completed. Published under authority of the Speaker of the House of Commons Publication Explorer Publication Explorer ParlVU