Long-term bond rate
Table 1. Non-Arm’s Length
This is the Non-Arm’s Length transaction Non-Basic Pipeline chart, please note that from 2018 – 2004 the deemed corporate income tax rate type was variable. From 2003 – 1995 the corporate income tax rate type was fixed.
|Year||Rate of Return on Capital||Deemed Corporate Income Tax|
|2016||6.88% Pg. 5 (PDF, 45 KB) See breakdown including prior year data](Note: Revised due to new information)||27.00%||FINAL|
For reference Energy chart
|Non-Arm’s Length Transaction Non-Basic Pipeline|
|Rate of Return on Capital (RORC)||Deemed Corporate Income Tax|
|6.88% Pg. 5 [see breakdown including prior year data] (Note: Revised due to new information)||27.00%||FINAL|
Refer to these pages for more help:
- Bank of Canada Benchmark Bond Yields (Long Term Bond Rate)
- Bank of Canada Weekly Financial Statistics (PDF, 154 KB)
More on rates of return
All pre-payout projects are allowed a return allowance on the excess of cumulative costs, less cumulative revenue.
For post-payout projects, a return allowance may be claimed if a project has a net loss for the year.
In the case of pre-payout projects, the amount is calculated monthly. In the case of post-payout projects, the amount is calculated annually.
The rate of the return allowance is tied to the long-term bond rate, set by the Bank of Canada. The legislative authority for the return allowance is provided by Section 2 of the Oil Sands Allowed Costs (Ministerial) Regulation.
Non-arm’s length (NAL) pipeline return rate
Pipelines used to transport bitumen or bitumen blend to market are not allowed as project assets. As a result, only a per-unit charge is allowed based on volumes actually transported.
In the case of NAL pipelines, the amount charged is calculated by a formula. It includes a return-on-capital component, which is tied to the return allowed by the National Energy Board for multi-rate pipelines.
More information on this cost-of-service formula can be found in Section 5.3 of the Oil Sands Royalty Guidelines, 2012.
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