B.C. NDP table bill that provides tax breaks on LNG projects

Monday, March 25, 2019
Globe and Mail

Photo by Peter McCartney (WC files)

British Columbia’s NDP government has tabled legislation that would offer tax breaks for liquefied natural gas projects, a move that is testing its alliance with the Green Party.

The legislation would repeal two LNG acts introduced by the previous Liberal government and instead reduce B.C.’s corporate income tax rate to 9 per cent from 12 per cent for corporations that meet several conditions, including climate commitments.

Finance Minister Carole James, who tabled the bill on Monday, said it is the final piece of the fiscal framework needed to move ahead with LNG Canada’s proposed $40-billion megaproject in northern B.C.

“As a government, we recognize the importance of a strong, diverse economy that provides jobs and investments in every corner of British Columbia,” Ms. James said in Victoria. “And we also recognize the importance of balancing our economic, environmental, social and reconciliation priorities.”

The first reading of the bill passed 80-3, with Green Party MLAs opposed. If passed, it would come into effect on Jan. 1, 2020.

Premier John Horgan announced the regulatory framework last March, outlining four conditions LNG projects have to meet to qualify for the tax breaks. They must guarantee a fair return for B.C.’s natural resources, guarantee jobs and training for British Columbians, respect and partner with First Nations, and meet the province’s climate commitments.

“No premier or government can dismiss this kind of critical opportunity for the people of British Columbia,” Mr. Horgan said at the time. “But neither will we turn our back on our commitment to climate targets, or our path to reconciliation with Indigenous peoples.”

The government has already implemented deferred payments on provincial sales tax and preferred industrial electricity rates as part of the new policy framework for LNG development.

Green Party Leader Andrew Weaver called the government’s continued push for LNG development “short-sighted” and counter to the province’s climate action targets.

“After years of criticizing the BC Liberals for their generous giveaway of our natural gas resources, the BC NDP have taken the giveaway to a whole new level,” Mr. Weaver said in a statement. “The legislation brought forward by this government is a generational sellout.”

Speaking with reporters in Victoria, Mr. Weaver, alongside Green Party MLAs Adam Olsen and Sonia Furstenau, called the bill the “subsidization of climate change.”

Asked Monday whether the BC Liberals would support the bill, Abbotsford West MLA and former finance minister Mike de Jong said his party is “philosophically in favour” of LNG development but would take time to study the legislation.

Peter McCartney, a climate campaigner with the Wilderness Committee, said the tax breaks would undermine the provincial government’s work on reducing carbon emissions and threaten B.C.'s ability to meet climate targets.

“Today is evidence of two things: that 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,” Mr. McCartney said in a statement.

The $40-billion LNG Canada project – the largest private sector investment in Canada’s history – would include a 670-kilometre pipeline that would ship natural gas from northeastern B.C. to an export terminal in Kitimat, on the coast.

The government said the project is expected to create 10,000 temporary construction jobs – including an estimated 4,500 workers for the terminal alone – and up to 950 permanent employees at the Kitimat terminal upon completion.

More from this campaign