IN THE NEWS / Imperial Oil gets latest big tax refund
TORONTO, Jan 5 (Reuters) - Imperial Oil Ltd. , Canada's biggest energy company,
said on Tuesday it had pocketed a C$155-million tax refund from the Alberta
government, the latest in a series of paybacks on taxes it overpaid in previous
decades.
Toronto-based Imperial, the affiliate of U.S. oil major Exxon Corp. , said the new
settlement included about C$80 million in taxable interest and would result in a
C$74-million gain to its fourth-quarter 1998 earnings.
The company received a final tax refund from Canada's federal government of
C$140 million in September, which came after an C$843-million payment in 1996.
The big refunds, which other Canadian oil companies have received as well, are
related to a 1992 Federal Court of Appeal decision in which Calgary-based Gulf
Canada Resources Ltd. was awarded a C$60-million settlement for taxes it paid after
deductions were eliminated by the country's tax authority.
The issue dates back to 1974, when the federal government began banning the
deduction of royalties and taxes paid by oil companies to provincial governments. At
the same time, it introduced another tax deduction -- now called the resource
allowance --to make up for the ban.
But a host of companies criticized the complexity of the allowance and pushed the
government to change the way it was calculated.
Some of Imperial's latest refund from Alberta has already been accounted for in past
earnings, it said.
Imperial spokesman Jean Cote said the company still expected similar refunds from
the provinces of Ontario and Quebec, but noted they would be much smaller.
Imperial shares on the Toronto Stock Exchange closed up C$0.20 to C$24.60 on
Tuesday. The refund announcement was made after the market closed.
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