Tax rebate offered to lure LNG producers

Income tax paid in the first three years would be applied as a rebate to higher rates in year four and five

The first LNG tankers could be loading up in B.C. by 2017

VICTORIA – The B.C. government plans to impose a two-tiered income tax on liquefied natural gas exports, with rebates in early years until investors recover the capital cost of building LNG processing plants.

Finance Minister Mike de Jong presented the framework for LNG income tax with Tuesday’s provincial budget. It describes an income tax rate of up to 1.5 per cent on net revenue in the first three years of LNG production, with a second tier rate of up to seven per cent applicable after five years.

Income tax paid in the first three years would be applied as a rebate to higher rates in year four and five, so the top rate wouldn’t take full effect until year six. Producers also pay royalties on natural gas at the wellhead, and B.C.’s carbon tax would apply to gas burned in processing and refrigeration of LNG.

De Jong said he the final income tax rates will be set when the government introduces legislation this fall. That is when international companies are expected to begin making final investment decisions.

The budget includes government revenue and expense forecasts out to 2017, with no tax revenue projected from LNG until later. De Jong said the government is sticking to its “lofty” goal of having three export plants operating by 2020.

In his response to the budget, NDP finance critic Mike Farnworth said the government has missed its original target to have the LNG tax regime in place by the end of 2013. He zeroed in on Premier Christy Clark’s promise to have at least one LNG pipeline and plant in operation at Kitimat by 2015, and her campaign pledge to retire B.C.’s growing debt.

“Judging from today’s lack of LNG revenue, the premier’s promise to magically wipe away $70 billion worth of debts in 15 years is surely a fantasy,” Farnworth said.

Natural Gas Development Minister Rich Coleman denied the suggestion that the tax structure is behind schedule. He said he met with officials from Shell and other proponents last week, and they are “comfortable” with the progress to date.

“The opposition wouldn’t know LNG if it came up and bit them,” Coleman said. “They’re totally uninformed. They don’t support the process, they don’t support LNG, they never have.”

In a speech to the B.C. Chamber of Commerce in Vancouver Wednesday, Clark said not all of the 10 LNG plants currently proposed will proceed, but even one would be a significant source of revenue.

Asked by reporters if the budget means no LNG revenues by 2017, Clark said it is still possible.

“We don’t want to book money that we don’t have yet,” Clark said.

Just Posted

PHOTO GALLERY: Malicous Monster Truck Tour

The Malicious Monster Truck Tour sold out to crowds of 2,500 people… Continue reading

North Coast fishing grounds key to orca recovery: DFO

Plan marks waters from Langara to Rose Spit as critical habitat for northern resident killer whales

Chris Green, mother of scouts, passes away

Green, who was born near Kitimat, spent more than 60 years volunteering with Scouts Canada

Intertidal Music Festival back for round two

More than 20 performances throughout the day at the North Pacific Cannery on July 21

Alberta man missing on Kitimat River found dead

Body found on July 11 after going missing on July 7

VIDEO: Trudeau shuffles familiar faces, adds new ones to expanded cabinet

Justin Trudeau shuffles his front bench Wednesday to install the roster of ministers that will be entrusted with leading the Liberal team into next year’s election.

‘Amazing Race Canada’ competitors face B.C. challenge

They drove Corvettes, mastered falconry basics, and ate blueberry pie in the Cowichan Valley

Grizzly bear jumps in river, chases B.C. kayaker

The bear got a bit too close for comfort along the Elaho River near Squamish

Evacuation alert issued due to Dog Creek Trail Wildfire

An evacuation alert has been issued by the Regional District of Bulkley-Nechako… Continue reading

Parks Canada looks to shine light on cloudy future for historic sites

A plan is in place to produce 10-year plans designed to turn around sagging attendance figures

B.C. poet shines a bright light on struggle with homelessness

Book launch for John La Greca’s Homeless Memorial is at Vernon’s Gallery Vertigo July 21.

Ontario police say attack on Muslim man was motivated by hate

Two men, aged 27 and 19, have been charged with assault in the incident

Canadian Tire delivers toys to ease kids’ street play pain in B.C. neighbourhood

It’s like Christmas for 11 kids who are supposed to be confined to their yards by strata bylaw

City orders largest Kinder Morgan protest camp to leave

Residents of Camp Cloud near the Trans Mountain work site have 72 hours to leave

Most Read