The Terrace and District Chamber of Commerce (TDCC) is celebrating the federal government’s announcement Aug. 9 that it will relieve duties on fabricated steel contained in modules for LNG projects.
Last year the TDCC Advocacy Committee drafted a policy resolution aimed at creating a globally competitive Canadian LNG industry, which received unanimous support from all 400 Canadian Chamber of Commerce members at their AGM in Thunder Bay, Ontario. The resolution was included in the 2018 Policy Book for the federal government to review, and now the Ministry of Finance’s announcement of the duties relief falls in step with recommendations put forth by TDCC.
“These modules are key components used in the construction of LNG facilities, and relief is being provided because modules of the size and complexity required for these projects are not available in Canada,” the release reads.
Loralie Thomson, president of the TDCC called the announcement “a win” for the TDCC Advocacy Committee.
“Relief from duties will be significant for LNG Canada to deliver a globally competitive project, and the economic impact will continue to be significant, providing employment business opportunities for the area,” she said.
In its resolution, TDCC argued that exploding US exploration of shale has led to a 25 per cent slump in Canadian exports of natural gas. Meanwhile Canadian exports to Asia are expected to grow 49 per cent by 2040, while the development of an East Coast facility could tap in to European markets. According to the Conference Board of Canada, an LNG industry in Canada with just one small and two large facilities, like the LNG Canada terminal in Kitimat, the industry would be worth $7.4 billion per year over the next 30 years and raise national employment by an annual average of 65,000 jobs.
Canada also has the opportunity to export the world’s cleanest LNG, with the lowest emissions benchmark of any LNG-developing jurisdiction in the world, the resolution reads.
“Without a Canadian LNG industry, Canadians risk losing these benefits to the United States as they will liquefy and export their domestically-produced natural gas and import cheaper raw Canadian gas for their domestic needs,” reads the resolution. “As Canada also has regulations in place to limit the amount of emissions produced by its LNG industry, allowing other jurisdictions to develop LNG would not only result in jobs and benefits leakage, but carbon leakage as well. Canada has the opportunity to develop a new industry that leads the world in low-carbon LNG and helps the world reduce global greenhouse gas emissions.”
TDCC also sent a letter to Prime Minister Justin Trudeau advising against Canadian steel industry recommendations that LNG megaprojects be put on hold until they build up capacity to manufacture the modules.
The resolution warned Canada must move fast to be globally competitive, making five recommendations to the federal government, including: “provide certainty that the large, complex pre-fabricated LNG modules required by projects and not manufactured anywhere in Canada will not be subject to anti-dumping tariffs.”
As Finance Minister Bill Morneau announced that relief on duties Aug. 9, Woodfibre LNG also placed an order for a cryogenic heat exchanger, a critical next step in the construction of its LNG project near Squamish.
“As Canada’s transition to a cleaner future gains momentum, our government will continue to support projects that have the potential to meet our energy needs while helping more people get ahead,” Morneau said in a press release. “Woodfibre LNG, along with LNG Canada, are prime examples of how economic growth, environmental protection and partnerships with Indigenous Peoples can come together to create good, well-paying middle-class jobs.”
LNG Canada also welcomed the news.
“Canada has the opportunity to produce the cleanest LNG in the world,” said Director of Corporate Affairs Susannah Pierce in an email to TDCC thanking supporters. “The opportunity is only realized if projects are able to access capacity and expertise, which under certain circumstances can only be provided by suppliers in other parts of the world.”
– Full disclosure: Terrace Standard publisher Bert Husband was a TDCC Advocacy Committee member at the time of writing the LNG resolution.