The Council of Canadians is opposing the development of LNG export terminals and pipelines in British Columbia. This spring we helped to organize public forums in Vancouver and Squamish and BC-Yukon organizer Leila Darwish will speak at public forums opposing LNG proposals in Delta (tonight), Powell River (on November 2) and in Courtenay/ Comox (on November 4). There may also be public events in Victoria and Nanaimo in late November.
And as this speaking tour begins, the public is learning that while Liquefied Natural Gas projects would contribute significantly to climate change, water depletion and other social and environmental harms, they won’t meet the revenue promises that were being made by the Christy Clark government.
CBC reports, “Finance Minister Mike de Jong said the tax rate will start at 1.5 per cent and remain at that level while LNG plants are operating at a loss and capital investments are being recouped. The rate will rise to 3.5 per cent after four years, where it will remain for another 20 years, when a final rate increase to five per cent will be instituted in 2037. In February’s budget, de Jong had tabled a two-tiered tax starting at 1.5 per cent for the first three years, eventually rising to seven per cent after five years.”
Additionally, “There will also be a new B.C. corporate income tax credit. It will reduce the provincial corporate income tax rate from 11 per cent to as low as eight per cent.”
The Globe and Mail adds, “During the election campaign in the spring of 2013, the B.C. Liberals touted a plan to retire the provincial debt with a ‘prosperity fund’ that would begin collecting revenue from LNG by 2017. The campaign platform stated that the fund would reap as much as $100-billion over 30 years. But the Finance Minister is now vague about whether there would be such a lucrative fund at all.”
The Province notes, “[The provincial finance minister] said Bill 6, the Liquefied Natural Gas Income Tax Act, reflects the plan he announced in February’s budget, but changing world-market conditions and increasing construction costs prompted the government to reduce the preliminary tax rate it announced nine months ago.”
Not surprisingly, the corporations and their lobby groups – that had criticized the original tax structure – are pleased. Shell, PetroChina, Korea Gas Corp and Mitsubishi are behind the proposed LNG Canada terminal in Kitimat. That consortium says, “There is a lot of competition in the global LNG marketplace, and we know that the B.C. government recognizes this. There is much more work to do prior to a final investment decision for LNG Canada.” The B.C. LNG Alliance and the Canadian Association of Petroleum Producers also welcomed the changes.
For more on our concerns about LNG projects in BC, please see LNG Pipedreams, Fractured Futures and Community Resistance.
