Potential $6-billion tax break for LNG producers in BC
Thursday, March 22, 2018
News 1130
John Horgan (NEWS 1130 files).
VANCOUVER (NEWS 1130) – Premier John Horgan is offering tax breaks to BC’s natural gas industry, but they come with conditions.
They include provincial sales tax exemptions, as well as a promise to get rid of an income tax surcharge imposed by the former Liberal government.
Horgan admits this could lead to the province losing as much as $6 billion worth of possible tax revenue over a four-year period, but he’s rejecting Opposition claims his actions are hypocritical.
“We’re going to make sure that the benefits are obvious and they only are realized, should there be a final investment decision,” he says.
“The previous Liberal government put forward a whole host of legislation that locked the province in, without ever having a final investment decision take place,” he adds.
New framework equates to $6B tax break over 4 years if LNG Canada builds its $40B project in Kitimat.
- Removing PST
- New Green House Gas emission standards.
- New industrial electricity rates.
- Elimination of LNG income tax that had required LNG-specific tax rates. https://t.co/jgFqms1etZ— Lasia Kretzel (@lkretzel1130) March 22, 2018
Plans are currently in the works for a natural gas pipeline from northeast BC to Kitimat, where a new terminal will process and ship LNG to Asian markets. That $40-billion project is expected to create up to 10,000 construction and up to 950 full time jobs.
Last year, Horgan promised to reduce greenhouse gas emission by 40 per cent below 2007 levels by 2030 and by 80 per cent by 2050.
BC’s carbon tax is also slated rise $5 per tonne every year until 2022, but Horgan says that’s still not expected to help BC meet climate change targets. He says new legislated targets for 2030 will be introduced later this year.
Environmental activists not pleased
Joe Foy with the Wilderness Committee says he’s shocked with the premier’s announcement. “The provincial government has said they are putting in policies to fight climate change, but tying us in — if we get tied into these long-term contracts for this LNG project, water quality and our climate commitments go out the door.”
“I know it’s difficult. I know we want to keep people employed. But we have to live up to our commitments for our people here to protect the landscape, the wildlife, and the water. And we have to live up to our global commitments. We can’t do that with LNG. It’s too bad. But we can’t. Maybe in the future, but not now,” he adds.
Foy argues a tax break for LNG producers doesn’t make sense, given the province’s stance on the Trans Mountain pipeline expansion,
“You can’t fight climate change on the one side, by fighting Kinder Morgan — and we support them and we’re very happy that they are — but at the same time, allow this polluting climate changing LNG industry to get a foothold in British Columbia. You can’t do both. We end up blowing our climate targets.”
He says while some feel LNG is a cleaner gas, it has big effects on climate change.
“When we drill with gas out of the ground, using the fracking method, there’s a lot of escaped gas, which is hugely damaging to our climate. Then, when we freeze the gas… it take a lot of energy. And we get that energy by burning gas, in order to freeze it. Then, when we ship it across the ocean, it’s constantly escaping.”
Read the original article here.
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