Questions remain after $40-billion LNG announcement

Kamloops MLAs still have concerns about a $40-billion liquefied natural-gas project in northern B.C., despite the work their party and former government did to get the LNG industry established in B.C.

“[Premier] John Horgan has publicly speculated that he may or may not bring forward legislation to the house with respect to the additional tax incentives the government has provided [the project],” Kamloops South-Thompson (B.C. Liberal) MLA Todd Stone told KTW.

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Last week, LNG Canada — a partnership of Royal Dutch Shell, Mitsubishi Corp., the Malaysian-owned Petronas, PetroChina Co. and Korean Gas Corp. — announced it was moving ahead with the project that will see a 670-kilometre pipeline carrying natural gas from Dawson Creek to a terminal in Kitimat, where it will be liquefied for export.

Construction is expected to take about five years.

In March, Horgan’s government promised LNG Canada $5.3 billion in tax breaks, including exemptions to planned increases in the carbon tax and exempting construction from the provincial sales tax.

He also is reportedly considering the possibility of bypassing the need to repeal the 3.5 per cent LNG income tax, which was a condition of LNG Canada’s final investment decision.

Passed by the Liberals in 2014, the tax contained an implementation clause never enacted by the previous government that can potentially just be left dormant, rather than repealed, which would require a vote in the legislature.

Exemption from the PST was done via an in-cabinet decision and the attorney general’s office is researching ways to avoid the legislature on the carbon tax exemption as well.

Stone said such multi-billion dollar tax breaks should be brought forward to the legislature for debate in order to maximize transparency surrounding the agreement the NDP government has in place.

“What we’ve been told is this was built upon the foundation of the details that were framed up by the former Liberal government, but with about four-and-a-half to $5 billion of additional tax incentives layered on top,” Stone said.

“It’s fine to say that, but show me the documents, show me the paper so that on behalf of my constituents, I can scrutinize this agreement and make sure that it’s in the best interest of the taxpayers of British Columbia.”

Stone’s sentiment is shared by fellow B.C. Liberal and Kamloops North-Thompson MLA Peter Milobar, as well as by Green Leader Andrew Weaver, whose party is propping up Horgan’s minority government.

“We want to see the detail of what some of these tax breaks and agreements are, but I think it’s clear that short of caving the provincial economy with the dea,l we’re supportive of [the project],” Milobar said.

According to the Vancouver Sun, Weaver said his party would prefer such decisions be made through a vote to ensure everything is done in good faith.

In a statement, Weaver said he was “deeply disappointed” the tax breaks resulted in a final investment decision on the project, which the Greens oppose on the grounds it will be a massive new source of greenhouse gas emissions, meaning the rest of the economy will have to make more sacrifices to meet B.C.’s climate targets.

“In opposition, the NDP were outspoken critics of the Liberal’s LNG regime, then rightly noting that it did not amount to a fair value for our resource and that the emissions were too high,” Weaver said.

“Our caucus was shocked when they turned around and delivered an even larger giveaway once in power.”

Weaver said the government does not have enough votes to implement its LNG regime and will have to work with B.C. Liberal MLAs if it wants the project to proceed.

Milobar said the Liberals have nothing to gain from opposing the project as a vote on tax breaks wouldn’t be one of confidence, but he suggested the premier may not want to bring the file to the legislature because it would force members of his caucus to vote for LNG despite having campaigned against it in the past.

“I can only imagine how disappointed the rank and file membership of the Green party must be to see the lack of follow through,” Milobar said adding that the Site C dam project also is also moving ahead despite Green objections.

The LNG Canada project, which involves shipping out 14-million tonnes of LNG every year, has the approval of the National Energy Board, Department of Fisheries and Oceans, BC Hydro and 25 First Nations.

— with files from the Vancouver Sun and Canadian Press

© 2018 Kamloops This Week


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