Lack of LNG tax plan is trouble, says Skeena NDP MLA Robin Austin

Companies delayed in ability to make investment decisions

THE provincial government’s announcement that its liquefied natural gas (LNG) tax plan won’t be ready this month is a sign of trouble, says Skeena NDP MLA Robin Austin.

Lack of a tax plan delays the ability of companies to make investment decisions and further pushes back Liberal promises of revenues to come from the tax, he said.

“First it was to be last fall, then by the end of the year, then this February and now they say it won’t be ready until the fall,” Austin said.

“And this is the tax that is supposed to pay off the [provincial] debt, create that prosperity fund, pay for the carbon to come from the industry and also to compensate First Nations for pipelines going across their territory and still be among the lowest and most competitive [LNG] taxes in the world.

“Clearly, Christy Clark has really oversold this and now she’s in trouble,” said Austin, adding the premier keeps repeating how much money the province will reap. “She’s caught up in her own rhetoric,” he said.

Although Austin says he has no direct knowledge of the interaction between companies and the province, he suspects the negotiations to establish the tax aren’t going well. And, in turn, that’s what’s causing the delay.

Provincial finance minister Mike de Jong, in announcing the delay Feb. 5, said there will be some information on a LNG tax framework as part of the provincial budget Feb. 18.

But it is not expected to contain exact details.

The finance minister did say the sooner a LNG tax plan could be presented, the better it would be for companies.

Beginning with the May 2013 election campaign and onward, Premier Christy Clark has said a LNG tax would lead to a prosperity fund of $100 billion and that the industry itself would create as many as 75,000 jobs.

Kitimat could be the location for three LNG plants and Prince Rupert at least two more based on the current number of companies active in the area.

All but one of the plants, a small one planned for Kitimat which would use the existing Pacific Northern Gas pipeline, would require pipelines delivering natural gas from northeastern B.C. fields.

The small one, called BCLNG which is partially owned by the Haisla of Kitamaat Village near Kitimat, has had its environmental clearance for several years but has yet to announce a final investment decision.

Austin said that one of the selling points for a LNG industry in B.C., a stable government, is also a selling point for other countries such as the United States and Australia who have plans of their own.

“And let’s not forget that within companies themselves, these are not their only LNG projects here. There’s competition internally for capital. Companies will go to where they can make the most money,” said Austin.