Kitimat politicians worry over prospect of LNG tax cap from province

A tax cap would hinder infrastructure development which would directly serve local industries, says Kitimat's mayor.

Kitimat politicians are worried over comments from Minister of Natural Gas Development Rich Coleman, who at this week’s Union of B.C. Municipalities convention warned against communities taxing LNG too high, which to some has been a hint that the province is still considering industrial tax rate caps.

Speaking to Black Press reporter Jeff Nagel at the UBCM event, Coleman spoke to the need for taxes “across the stream” to be globally competitive.

“They’ll have their mill rate, they’ll have their tax in the municipality. Our concern isn’t that, it’s a concern that what happened in some communities after resources were built, municipalities overtaxed one portion of their tax, which in a lot of cases was pulp mills,” said Coleman.

But he was certain Kitimat isn’t going to lose out on taxes.

“Kitimat will get lots of tax that will help run its community long term, so would any other community that would get it,” he said.

The notion of tax caps has never sat well with the municipal council.

Mayor Joanne Monaghan said she’s concerned that if the forthcoming tax rate from the province on LNG projects comes high that the province will try to enforce a competitiveness through a municipal tax cap.

“If they tax too much then in order to make it fair for the industries, we are going to have to tax less, then we won’t have the ability to keep up the infrastructure that will keep the industry’s happy,” she said.

She noted the community has infrastructure needs such as the Haisla Bridge, which at times has prevented shipments of equipment from crossing.

Limits on industrial taxes would prevent upgrades to things like that.

At the UBCM conference is Councillor Phil Germuth who says such a cap would have a massive impact on the town, yet would not do much overall for projects because the municipal tax rates are “so small” to a project’s overall tax bill.

He also said that in Kitimat’s 60 year history it has never been greedy in setting tax rates for industries.

Germuth is also involved with the Northwest BC Resource Benefits Alliance, and said that group is opposed to a tax cap as well. That said, the Alliance’s framework will include ways for a town to ‘top up’ lost taxes if there is a cap.

The Alliance would be funded by a portion of B.C.’s proceeds from industry taxation, he said.

– Files from Jeff Nagel