British Columbia Premier Christy Clark wants to make real history in the provincial legislature this month by adopting a Liquefied Natural Gas Project Agreements Act that gives her government the legal authority to approve the C$36 billion Pacific NorthWest LNG project led by Malaysia’s Petronas and enter into similar terms with other would-be LNG developers over the next 10 years.
“We don’t have many opportunities in this legislature to make history,” she said July 13. “This is one of them. It really will be a historic debate, one that people will look back on for decades.”
What she didn’t do was repeat the extravagant claims that were credited with re-electing the Liberals in 2013.
Clark said then that at least one LNG project would be up and running by 2015, that five would be in operation before 2020 (there are currently 18 in various stages) and that the industry would create 100,000 jobs, contribute enough royalties and taxes to create a C$100 billion Prosperity Fund and that British Columbia would end up debt free.
Finance Minister Mike de Jong said he was looking forward to jumpstarting a “whole new industry and a whole new era of opportunity for B.C.,” suggesting the opposition New Democratic Party was “twisted up in knots over this one.”
He said the legislation is the last piece of a puzzle the government has been assembling over many years to attract LNG investment in British Columbia.
Liberals have the votes
NDP leader John Horgan said his caucus “will be opposing this bill” because of its flaws, while, in the same breath, declaring “we do not under any circumstances oppose development of this (natural gas) resource.”
“We want to make sure we do it in a way that benefits all British Columbians and not just meeting a political promise that was made during (the 2013) election campaign,” he said.
But the simple reality is that Clark’s Liberal Party government has an overwhelming majority and will pass the bill. The only question is whether the NDP will be able to squeeze a few minor changes out of the government.
De Jong has made it clear he will not accept meddling with a bill that provides Petronas and its partners with assurances that cover 25 years and promises compensation of C$25 million a year or more if any future governments: Raise income taxes for LNG operations; adopt carbon taxes that specifically target the industry; reduce natural gas tax credits; and make changes to rules on greenhouse gas emissions that financially affect the industry.
Concerns about 25 years, jobs
Referring to the terms of the agreement, Horgan said: “A 25-year deal? Who does that? Who does that in the 21st Century?”
He also attacked the Clark government for failing to secure job guarantees, protect the environmental or get a fair return for British Columbians.
Horgan said the bill handcuffs future governments by granting a “25-year tax holiday to a foreign company” that will rely heavily on temporary foreign workers during the construction phase.
“There should be local-hire provisions,” he said. “There should be local-procurement provisions. If Australia can negotiate these arrangements, why can’t B.C.?”
Horgan said the constraints in the legislation are “just unconscionable and we won’t support it.”
Clark: BC first, then Canada
Clark announced C$75 million has been allocated to trades training and promised that British Columbians would be first in line for a projected 4,500 construction jobs at Pacific NorthWest.
“My view - and I’ve expressed this to all proponents is ‘British Columbia first (for jobs), Canada second and then start looking in the United States and other places around the world for temporary employees,” she said.
Pacific NorthWest President Michael Culbert said that in addition to construction jobs - an average 62 percent of which the consortium has estimated will go to Canadians - up to 330 long-term careers will be created to operate the project, along with 300 spinoff jobs to local communities.
Culbert said that to meet its job commitments, Pacific NorthWest is “working with a number of associations, educational providers and working groups to help prepare the British Columbia workforce for upcoming job opportunities.”
He also noted that Progress Energy, owned outright by Petronas, is already a major employer in the gas fields of northeastern British Columbia that will provide the bulk of feedstock for the project.
De Jong forecast that Pacific NorthWest will generate nearly C$9 billion in taxes and royalties by 2030.
