Page 72 - AIF - English

RISK FACTORS

increase or decrease Suncor’s decommissioning and company’s projects may rely on securing licences for

restoration cost estimates. The company’s failure or inability additional water withdrawal, and there can be no
to adequately implement its reclamation plans could have a assurance that these licences will be granted or that they

material adverse effect on Suncor’s business, financial will be granted on terms favourable to Suncor.
condition, results of operations and cash flow.

Income Taxes
Alberta’s Land-Use Framework
In January 2013, the company received a proposal letter

Alberta’s LUF has been implemented under the Alberta from the Canada Revenue Agency (CRA) relating to the
Land Stewardship Act (ALSA), which sets out the income tax treatment of realized losses in 2007 on the

Government of Alberta’s approach to managing Alberta’s settlement of certain derivative contracts. Following
land and natural resources to achieve long-term economic, Suncor’s response to a number of information requests in
environmental and social goals. ALSA contemplates the 2013, the CRA informed the company that it has not

amendment or extinguishment of previously issued changed its original proposed position.
consents such as regulatory permits, licences, approvals and
In the event that the CRA issues a formal Notice of
authorizations in order to achieve or maintain an objective Reassessment (NOR), Suncor plans to file a Notice of
or policy resulting from the implementation of a
Objection to dispute this matter. However, notwithstanding
regional plan.
the filing of an objection, the company would be required

On August 22, 2012, the Government of Alberta approved to make a minimum payment of 50% of the amount
the LARP, the first regional plan under the LUF. The LARP payable under the NOR, estimated to be $600 million,

includes management frameworks for air, land, and water which would remain on account until the dispute
quality that incorporate cumulative limits and triggers. As is resolved.

well, the LARP identifies areas related to conservation, Suncor strongly disagrees with the CRA’s position and
tourism and recreation.
firmly believes it will be able to successfully defend its
A management framework for water quantity (water original filing position so that, ultimately, no increased

withdrawals from the Athabasca River) has recently been income tax payable will result from the CRA’s actions. If the
announced. A management framework for biodiversity is company is unsuccessful in defending its tax filing position,

under development.
it could be subject to an earnings impact of up to
The implementation of, and compliance with, the terms of $1.2 billion.

the LARP may adversely impact our current properties and
projects in northern Alberta due to, among other things, Skills and Resource Shortage
The successful operation of Suncor’s businesses and our
environmental limits and thresholds. Due to the cumulative
nature of the plan, the impact of the LARP on Suncor’s ability to expand operations will depend upon the
availability of, and competition for, skilled labour and
operations may be outside of the control of the company,
as Suncor’s operations could be impacted as a result of materials supply. There is a risk that we may have difficulty
sourcing the required labour for current and future
restrictions imposed due to the cumulative impact of
development, by the operators in the area and not solely in operations. The risk could manifest itself primarily through
an inability to recruit new staff without a dilution of talent,
relation to Suncor’s direct impact.
to train, develop and retain high-quality and experienced
staff without unacceptably high attrition, and to satisfy an
Alberta Environment Water Licences
We currently rely on fresh water, which is obtained under employee’s work/life balance and desire for competitive
compensation. The labour market in Alberta is particularly
licences from Alberta Environment to provide domestic and
utility water at our Oil Sands operations. Water licences, tight due to the growth of the oil sands industry. The
increasing age of our existing workforce adds further
like all regulatory approvals, contain conditions to be met
in order to maintain compliance with the licence. Although pressure to this situation. Materials may also be in short
supply due to smaller labour forces in many manufacturing
there can be no assurance that the licences to withdraw
water will not be rescinded or that additional conditions operations. Our ability to operate safely and effectively and
complete all our projects on time and on budget has the
will not be added to these licences, without evidence of an
environmental impact associated with the licence and potential to be significantly impacted by these risks.

providing compliance is maintained, this is not likely to
occur. There can be no assurance that the company will Change Capacity
In order to achieve Suncor’s business objectives, the
not have to pay a fee for the use of water in the future or
that any such fees will be reasonable, although there is company must operate efficiently, reliably and safely, and,
currently no evidence that governments are contemplating at the same time, deliver growth and sustaining projects

such a fee at this time. In addition, the expansion of the
safely, on budget and on schedule. The ability to balance

70 SUNCOR ENERGY INC. ANNUAL INFORMATION FORM 2014