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BC eager to spur LNG
Province introduces tax breaks as final piece of framework for LNG Canada project
Gary Park for Petroleum News
The British Columbia government is pushing the coalition that keeps it in power to the limit by announcing changes to its natural gas tax credits for LNG projects in hopes of attracting more development.
The legislation would repeal two LNG acts introduced by the previous Liberal government to open the way for reducing British Columbia’s corporate income tax rate to 9 percent from 12 percent, so long as those corporations meet several conditions, including climate change commitments.
Finance Minister Carole James said the legislative overhaul is the final piece of a fiscal framework needed for LNG Canada to move ahead with its planned C$40 billion project on the northern British Columbia coast.
She said the people of British Columbia are “counting on (the socialist New Democratic Party government) to attract LNG investment that meets strict conditions: delivering jobs and financial benefits to B.C., creating economic partnerships with Indigenous peoples and protecting our clean air, land and water.
“As a government we recognize the importance of a strong, diverse economy that provides jobs and investments in every corner of British Columbia.”
James said the administration of Premier John Horgan “also recognizes the importance of balancing our economic, environmental, social and reconciliation priorities (with Indigenous people).”
The government estimated that LNG Canada will create 10,000 construction jobs - including 4,500 for the liquefaction and tanker terminal at Kitimat - and 950 permanent positions.
The first reading of the legislation passed by 80 votes to three, with only the three Green Party members of the legislature opposed. If the bill negotiates the next two readings it would come into effect on Jan. 1, 2020.
Mixed reactions to bill But the Green Party, whose support is required to give the NDP a majority, said the government’s actions are hypocritical because they stray from the Clean B.C. plan to reduce carbon emissions.
Green leader Andrew Weaver said the government’s continued push for LNG development is “short-sighted” and runs counter to climate action targets.
“After years of criticizing the British Columbia Liberals for their generous giveaway of our natural gas resources, the B.C. NDP have taken the giveaway to a whole new level,” he said.
“This legislation ... is a generational sell-out” and a “subsidization of climate change,” Weaver said.
He did not say whether it might prompt the Greens to look for a chance to topple the NDP government.
Mike de Jong, finance minister under the Liberal government, said his party is “philosophically in favor” of LNG, but would take more time to study the legislation before it enters the debate stage of second treading.
Peter McCartney, a campaigner with the Wilderness Committee, said the tax breaks would undermine the province’s work on lowering carbon emissions.
He said the legislation is proof of two things: The fossil fuel industry cannot survive “without huge public subsidies and that even governments who claim to understand the urgency of the climate crisis are more than happy to grant them.”
McCartney estimated the Horgan government is offering C$6 billion in tax breaks and subsidies “to construct the most polluting project in the province.”
Greg D’Avignon, chief executive officer of the Business Council of British Columbia, welcomed the tax changes as a chance for the province to complete in global LNG markets.
“If we as a province are purposeful and apply this same competitive lens to all our natural resource, technology and energy export sectors we can become the low-carbon supplier of choice globally,” he said.
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