CNRL is the second big oil company to blame an Alberta tax increase for hundreds of millions of dollars in losses during their second quarter of operations. The entire oil industry saw losses last year because of the drop in global oil prices, but some energy companies are seeing current losses that they link with Alberta tax increases as well. The corporate tax rate for Alberta jumped from 10% to 12%, and this caused CNRL to record a $405 million net loss during the second quarter. This is in comparison to a profit of $1.07 billion that was recorded just a year ago. CNRL has taken the position that the sudden increase in the tax rate for corporations played a huge part in the losses the company is experiencing.
When discussing the Alberta tax increases and the posted loss that CNRL has the chief financial officer for the company, Corey Bieber, stated “This charge effectively translates into lower future cash flows and therefore, lowers reinvestment in the business. Based upon third-party research, this lower future capital reinvestment likely equates to about 4,100 fewer person years of direct, indirect and induced employment, with follow-on impact of higher income taxes on future income streams. We expect to deliver annual oil production at the midpoint of guidance despite the forest fire impact on second quarter oil production,. We have been able to achieve significant cost savings through better effectiveness, efficiency and innovation. Both operating and capital costs were down significantly from the second quarter in 2014 to the second quarter of this year.”