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Originally Posted by Jacks
Saw that story earlier but the numbers seem kind of funky. Someone would have to explain to me how 2% rate increase would swing them from a profit to a $400M loss. The additional tax should be charged on profit no? unless the tax was retroactive or something.
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It was charged on deferred income tax liabilities, so on revenue from past quarters as well as current. That allows better cash flow but obviously increases your liability to this sort of thing.
I think CNQ is being a bit mellow dramatic, but their point is not wrong. This tax increase will obviously result in less investment and less employment especially when combined with the current economic condition in the province, country and world.
What I hate even more is Notely's response. To paraphrase, "well, duh, of course higher taxes result in less profit. That's what Albertans wanted when they voted for us. We'll talk again when oil prices go back up....which they will...fer sher".
Painful.