The provincial government has introduced legislation that, when passed, will implement a natural gas tax credit for LNG development in B.C., repeal the Liquefied Natural Gas Income Tax Act and repeal the Liquefied Natural Gas Project Agreements Act.
During the legislation announcement on Monday, the government said the legislation will “put together the final pieces needed to deliver liquid natural gas (LNG) investment that brings long-term benefits to the province and thousands of good-paying jobs for B.C. workers, while operating within strong environmental protections.”
“British Columbians are counting on us to attract LNG investment that meets strict conditions: delivering jobs and financial benefits to B.C., creating economic partnerships with Indigenous peoples, and protecting our clean air, land and water,” Minister of Finance Carole James, said. “This legislation completes the process of creating a fiscal framework that invites investment while supporting those conditions.”
According to the government, the legislation will bring together the final fiscal elements of the policy framework for natural gas development set out by Premier John Horgan in 2018. The government has already provided a PST performance payment agreement and has provided industrial electricity rates on par with other industrial users in B.C.
The government also said the framework was completed after months of discussion between government, communities, Indigenous peoples and the LNG industry.
LNG Canada announced last fall it would go ahead with a $40-billion project in B.C. The development includes a pipeline carrying natural gas from Dawson Creek to a new processing plant on the coast in Kitimat.
The government said it is expected to create 10,000 construction jobs and up to 950 permanent jobs in the Kitimat processing terminal. The NDP government also said it will be “the cleanest of its kind in the world” by fitting within the greenhouse gas (GHG) reduction targets of government’s CleanBC climate action plan.
Other economic benefits the government has said will be a result of the LNG pipeline include:
- $24 billion of direct private-sector investments in B.C.;
- $23 billion in new government revenues over the life of the project, creating new resources for health care, schools, child care and services for British Columbians; and
- Significant funding for First Nations capacity building, training and education, contracting and employment, and community contributions.
If the legislation passes, the new natural gas tax credit will take effect on Jan. 1, 2020, and will be available to qualifying corporations and calculated at three 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 nine per cent.
The Green party said the government’s actions are hypocritical because they stray from its CleanBC plan to reduce carbon pollution.
Green party Leader Andrew Weaver said in a statement the government’s actions are pulling the province in two different directions.
“Continuing to push for LNG development is short sighted and works directly against CleanBC objectives,” he said.
“After years of criticizing the B.C. Liberals for their generous giveaway of our natural gas resources, the B.C. NDP have taken the giveaway to a whole new level. The legislation brought forward by this province is a generational sellout.”
Weaver, who is the lead author of four United Nations intergovernmental climate change reports, said investments in renewable energy infrastructure would invite innovative industries to the province.
Peter McCartney of the Wilderness Committee also criticized the legislation for not aligning with the CleanBC plan.
“Premier Horgan is talking out of both sides of his mouth on climate change,” McCartney said.
“British Columbians are all doing their part to cut carbon pollution while at the same time he’s giving $6 billion in tax breaks and subsidies to construct the most polluting project in the province.”
The Business Council of British Columbia, meanwhile, backed the government’s approach, saying the changes will allow the province to compete in LNG markets around the world.
“If we as a province are purposeful and apply this same competitive lens to all our natural resource, technology and energy export sectors we can become the low carbon supplier of choice globally,” Greg D’Avignon, the council’s president and CEO, said in a news release.
“The resulting economic growth will create higher wage jobs, stronger communities and more government revenues to support the quality of life and services British Columbians expect.”
With files from CBC and The Canadian Press