Quote:
Originally Posted by firebug
As the individual in my firm who does all of the project valuation modelling I thought I'd take a look at some of our historical approved projects to see how much of an impact the tax change makes...
10% Tax Rate: IRR 14.2%; PVAT7% $2,427.4MM
12% Tax rate: IRR 13.9%; PVAT7% $2,378.2MM
So a while a 20% tax increase sounds like a big bogeyman, it only impacted our PV by 2% (What a surprise ;-). A change that small is unlikely to affect project approval for all but the most marginal of projects (which likely wouldn't have flown anyways).
Those who are trying to blame the NDP for the lack of corporate investment in the current economic climate are barking up the wrong tree and are displaying their lack of real-world experience in these matters.
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http://business.financialpost.com/ne...llion-net-loss
CNRL posted a $405-million loss for the quarter, compared to $1 billion in earnings during the same period last year.
The company attributed the loss to a $579 million charge as a result of the recent hike in Alberta’s corporate tax rate, to 12 per cent from 10 per cent, introduced by the newly elected NDP in June.
If they paid $579M due to the 2% increase, and lost $405M overall, that means that they would have made something like $174M in profit.
Instead of using a potential $174M to pay dividends (which all help all of our RRSPs) or put that money towards future investment (which help all Albertans), the company above can do neither thanks Rachel.