Saskatchewan has updated Information Bulletin PST-14, “Information for Oil and Natural Gas Producers”, and has also issued Information Notice IN 2018-03, “Information Regarding Natural Gas Valuation for Producers”, to outline how PST applies to natural gas used by its producer.
Natural gas is subject to PST when consumed in stationary internal combustion engines that enable the compression of natural gas at pipeline compression facilities for processing, gathering, storage, transmission and certain other activities. The bulletin and information notice provide producers with an updated method of calculating the value of natural gas that is consumed at their compressor stations, as well as the corresponding PST liability, based on the Provincial Average Field Gate Price and a measurement of its energy content (i.e., Giga Joules).
These documents define this taxable natural gas as “Lease Fuel”, and confirm that producers may deduct a 10 percent allowance when calculating their PST liability to account for the use of this fuel in exempt activities, such as heating.
In addition, the bulletin clarifies the tax status of labour services and any associated charges made in relation to tangible personal property and real property.