Canada's oil and gas industry says the federal government has missed the mark with its plan to tax share buybacks, arguing it could discourage investment in the domestic energy industry.
In a statement, the Canadian Association of Petroleum Producers said the disparity with U.S. policy could funnel investor interest out of Canada and towards lower-tax jurisdictions.“The 2% tax rate is double than what is being considered in the United States and may have the unintended effect of discouraging investment into Canadian-run businesses while putting the shareholder returns of Canadian investors at risk,” it said.
“It’s truly tragic. The way forward should be based upon serious energy policy focused on things that will help encourage investment and increase supply – i.e. stable and well understood regulatory approval processes would be a good start. But higher taxes? Higher taxes have never been a path to increasing the supply of anything,” he said in an email.“It’s a pretty straight forward fact pattern. So am I thrilled? Nope. Will the world end? Nope.
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