BC Liberal MLAs are joining forces with the governing NDP to assure that legislation that will guarantee tax breaks for the liquefied natural gas industry in B.C. will become law.
On Monday, the provincial government presented the legislation in the legislature, which immediately faced opposition by B.C. Green Party’s three MLAs – with 83 of the 87 of the MLAs in favour of the legislation, its passage through the legislature is ensured.
“British Columbians are counting on us to attract LNG investment to B.C. This legislation completes the process of creating a fiscal framework that invites investment while creating economic partnerships with Indigenous peoples and protecting our clean air, land and water,” said finance minister Carole James.
The tax breaks are part of a broader range of benefits for the LNG industry announced by premier John Horgan in March last year, including an exemption from provincial sales tax (PST) and being billed for electricity by BC Hydro at the same rate as other industrial users in B.C.
Making the announcement last year, Horgan said the breaks were conditional on a final investment decision (FID) before November 2018 – LNG Canada made its FID in October, a month before the deadline.
From January next year, the new natural gas tax credit will be available to qualifying LNG corporations, calculated at 3 per cent of the cost of natural gas. The tax credit can be used to reduce B.C.’s corporate income tax rate from 12 per cent to 9 per cent.
In addition, the PST break will save LNG Canada nearly $600 million during construction.
LNG Canada CEO Andy Calitz said the measures announced by Horgan last year provided LNG Canada’s joint venture participants with confidence that B.C. supported the project and facilitated its competitiveness against other LNG projects under development or in operations.
“The province’s support for LNG development will result in significant financial benefits over the 40-year operating life of the project. This includes operating performance payments, corporate income tax, carbon tax, royalty payments on gas, motor fuel tax, income tax from labour, PST, municipal tax and payments to First Nations,” said Calitz.
He said the benefits of the project were already beginning to show in B.C. in the form of jobs, training and skills development, social investments and the purchase of local goods along with utilizing B.C. services and trades.
“The value of LNG Canada’s financial contributions goes beyond the money that will become available to government to fund education, healthcare, childcare and the like – but also to the many individuals who will work in well paid skilled trades jobs, and the many apprentices that will begin their careers in the skilled trades working on the LNG Canada project,” added Calitz.
James said the LNG Canada project is currently rated as the cleanest LNG project in the world, despite the consortium’s decision to power its refrigeration and compression equipment by burning natural gas.
Weaver said an LNG plant in Louisiana is already moving to all-electric LNG production for export, meaning LNG Canada will not be the cleanest by the time it begins shipping in 2024.
James said as of December, there were 600 people working on the LNG Canada project, and more work on the pipeline route. Discussions continue with protesters who have built a camp on the route near Houston.
– with files from Tom Fletcher.