Page 75 - Suncor AR English

significant barrier to its exports of oil sands crude if the Alberta Environment Water Licences

importing jurisdictions do not acknowledge efforts We currently rely on fresh water, which is obtained under
undertaken by the oil sands industry to meet the emissions licences from Alberta Environment to provide domestic and

intensity reductions legislated by the Government
utility water at our Oil Sands operations. Water licences,
of Alberta.
like all regulatory approvals, contain conditions to be met

in order to maintain compliance with the licence. Although
Land Reclamation
there can be no assurance that the licences to withdraw

There are risks associated specifically with the company’s water will not be rescinded or that additional conditions
ability to reclaim tailings ponds containing mature fine will not be added to these licences, without evidence of an

tailings, with TROTM or other methods and technologies. environmental impact associated with the licence and
Suncor expects that TROwill help the company reclaim providing compliance is maintained, this is not likely to
TM
existing tailings ponds by reducing the volumes of fluid fine occur. There can be no assurance that the company will
tailings. The success of TROor any other methods of not have to pay a fee for the use of water in the future or
TM
technology and the time to reclaim tailings ponds could that any such fees will be reasonable, although there is
increase or decrease Suncor’s decommissioning and currently no evidence that governments are contemplating
such a fee at this time. In addition, the expansion of the
restoration cost estimates. The company’s failure or inability
to adequately implement its reclamation plans could have a company’s projects may rely on securing licences for
additional water withdrawal, and there can be no
material adverse effect on Suncor’s business, financial
condition, results of operations and cash flow.
assurance that these licences will be granted or that they
will be granted on terms favourable to Suncor.

Alberta’s Land-Use Framework
Income Taxes
Alberta’s Land-Use Framework (LUF) has been implemented
under the Alberta Land Stewardship Act (ALSA), which sets In January 2013, the company received a proposal letter
from the CRA relating to the income tax treatment of
out the Government of Alberta’s approach to managing
Alberta’s land and natural resources to achieve long-term realized losses in 2007 on the settlement of certain
economic, environmental and social goals. ALSA derivative contracts. Following Suncor’s response to a

contemplates the amendment or extinguishment of number of information requests in 2013, the CRA
previously issued consents such as regulatory permits, informed the company that it has not changed its original

licences, approvals and authorizations in order to achieve proposed position.
or maintain an objective or policy resulting from the
In the event that the CRA issues a formal Notice of
implementation of a regional plan.
Reassessment (NOR), Suncor plans to file a Notice of

On August 22, 2012, the Government of Alberta approved Objection to dispute this matter. However, notwithstanding
the Lower Athabasca Regional Plan (LARP), the first the filing of an objection, the company would be required

regional plan under the LUF. The LARP includes to make a minimum payment of 50% of the amount
management frameworks for air, land, and water quality payable under the NOR, estimated to be $600 million,

that incorporate cumulative limits and triggers. As well, the which would remain on account until the dispute
LARP identifies areas related to conservation, tourism
is resolved.

and recreation.
Suncor strongly disagrees with the CRA’s position and

A management framework for water quantity (water firmly believes it will be able to successfully defend its
withdrawals from the Athabasca River) has recently been original filing position so that, ultimately, no increased

announced. A management framework for biodiversity is income tax payable will result from the CRA’s actions. If the
under development.
company is unsuccessful in defending its tax filing position,

The implementation of, and compliance with, the terms of it could be subject to an earnings impact of up to
$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
environmental limits and thresholds. Due to the cumulative
nature of the plan, the impact of the LARP on Suncor’s The successful operation of Suncor’s businesses and our
ability to expand operations will depend upon the
operations may be outside of the control of the company,
as Suncor’s operations could be impacted as a result of availability of, and competition for, skilled labour and
materials supply. There is a risk that we may have difficulty
restrictions imposed due to the cumulative impact of
development, by the operators in the area and not solely in sourcing the required labour for current and future
operations. The risk could manifest itself primarily through
relation to Suncor’s direct impact.
an inability to recruit new staff without a dilution of talent,
to train, develop and retain high-quality and experienced

SUNCOR ENERGY INC. ANNUAL REPORT 2013 71