Canadian Natural Resources blames NDP for financial loss

A prominent Alberta oil and gas companyis blaming the provincial NDP government for a loss this quarter, saying its tax hike is the reason why it was not able to post a profit.

On Thursday, Calgary-based Canadian Natural Resources reporteda $405-million net loss in the second quarter. The company says it would have been profitable if not for an increase in Alberta's corporate tax rate,which rose from 10 per cent to 12 per cent as of July 1.

The company says the tax hike increased its deferred income tax liability by $579 million. A deferred income tax liability is an item on a balance sheet showing a tax that a company will owe on its income, but has not yet been assessed.

"This charge effectively translates into lower future cash flows and therefore, lowers reinvestment in the business," said company CFOCorey Bieber in a release.

Company president Steve Lauttold analystshecould not make any projections about 2016because of other potential changes by the provincial government, such as newroyalty rates andclimate change regulations.

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Similar to other companies in the oilpatch, the price of oil continues to hurtCanadian Natural Resources. Total revenue in the most recent quarterwas $3.42 billion, down from $5.37 billion a year earlier.

"Yes, when you pay a higher corporate tax, it does mean you have a little less profit," said Alberta Premier Rachel Notley to reporters on Thursday as she responded to a question about the company's comments."But at the end of the day, Albertans clearly considered that issue very thoroughly in the last election and determined that when it comes time for all of us to pull up our socks and tighten our belts because of the fiscal challenges we find ourselves with, that everybody needs to chip in."

This is not the first time Canadian Natural Resources has spoken out about the NDP, which won a majority government in the spring election. In May, the companycancelled its presentation of future spending plans because of the change in government and the NDP'spolicies. The movewas described by some industry watchers as aggressiveandmade it seem like the companywas going out of its way to attack the NDP.

"I think different corporate players in Albertaare going to engage in public discussion with Albertans in different ways," said Notley. "We feel quite confident that we are effectively working with most oil and gas leaders to move forward with both the climate change strategy as well as how we deal with the royalty regime as prices recover."

Canadian Natural Resources is not the only oilpatch player to speak up about the NDP. In fact,ever since the change of government, several oil and gas companies have spoken out about their concern and fear, as they are uncertain what changes willbe made to Alberta's largest industry.

Last month, the head of Encanareminded the new government that investment dollars can always find a home in another jurisdiction.