Liquified Natural Gas Income Tax Act Glossary
The terms defined here are explanatory only. They aren't intended to be used for legal interpretation. Where there is a conflict between these terms and the Liquefied Natural Gas Income Tax Act, the Act shall prevail.
- The date a certificate of restoration is issued under section 41 of the Oil and Gas Activities Act
- The date other prescribed documentation is issued for an obligation under Canadian federal or provincial law regarding the restoration, reclamation or remediation of the LNG facility site
- Inducement (such as a grant, subsidy, forgivable loan, deduction from tax or allowance)
- Refund, reimbursement, contribution or allowance
- Assistance (such as a grant, subsidy, forgivable loan, deduction from tax or allowance)
Financial incentives don't include payments made relating to the acquisition of an interest in your business or property.
- As or instead of interest
- Resulting from issuing or selling units of:
- a unit trust
- interests in partnerships or syndicates by the partnerships or syndicates
- shares of your capital stock
- For borrowing money or incurring debt
- For restructuring, rescheduling or assuming a debt obligation
- As or instead of charges or fees you incurred to borrow money, incur debt, reschedule or assume a debt obligation
- To satisfy the principal amount of a bond, debenture, bill of exchange, note or mortgage
But doesn't include:
- Amounts paid to obtain a collection bond
Fiscal period: A fiscal period for LNG income tax is the same as the fiscal period under the federal Income Tax Act (Canada) (or would have, if the federal Act applied to you). If a fiscal period ends at any time, the next fiscal period begins immediately after that time. If a fiscal period begins at any time, the previous fiscal period ends immediately before that time.
Hedging transaction: Hedging transactions are certain transactions that can reasonably be considered to have been undertaken to reduce or eliminate your risk of loss and opportunity for gain or profit from liquefaction activities at an LNG facility. Hedging transactions are:
- Transactions under an agreement where:
- The value of the agreement changes in response to certain rates, prices or credit ratings, or other variables outside the influence of the parties to the agreement
- The agreement requires no initial net investment, or an initial net investment that is smaller than would be required for similar agreements
- The agreement is settled at a future date
- The agreement is not entered into and held for the receipt or delivery of a service or property
- Acquisitions or dispositions of currency
Improvement: An improvement includes any building, structure or other thing that is attached to or installed in an existing building, structure or land so that it ceases to be personal property at common law.
Land: Land include any foreshore or land covered by water and any interest in that foreshore or land, but doesn't include improvements.
LNG facility: A single LNG plant located in B.C. that includes:
- All land underneath the plant
- Any land that is contiguous with the land underneath the plant if that land is used or held for the operations of the plant
LNG income tax taxpayer (taxpayer): A person who engages in or has income from liquefaction activities, regardless of whether the person is liable to pay the tax. An LNG income tax taxpayer includes trusts.
- Receiving or measuring natural gas
- Removing and separating natural gas liquids from natural gas
- Storing natural gas liquids or LNG
- Measuring and loading facilities for natural gas liquids or LNG
- Loading natural gas liquids or LNG
- Transmitting LNG for regasification
An LNG plant also includes tangible personal property or improvements that are used for generating electrical power for the LNG plant and tangible personal property that is necessary for complying with health, safety and environmental standards required by law.
An LNG plant doesn’t include feedstock pipelines, vehicles or vessels used for transporting LNG or natural gas liquids from an LNG plant or pipelines used for transporting LNG, natural gas liquids or natural gas from an LNG plant unless that pipeline is used for loading LNG or natural gas liquids for shipment or transmitting LNG for regasification.
Tax pool: The balance of your tax pool for a tax year for a single LNG facility is the amount of tax payable at the 1.5% tax rate on your net operating income for the current and previous tax years, less all amounts already used out of the tax pool to reduce the tax payable on your net income for previous tax years.