The provincial government introduced legislation Monday that would change the province's tax structure for liquefied natural gas projects.
Finance Minister Carole James said the change is meant to bring jobs and other financial benefits to the province through economic partnerships with Indigenous groups while also protecting the environment.
In a rare show of agreement, the NDP and the Liberal Party members backed the move.
“Our government’s vision is to make life better for British Columbians in all regions of our province,” said James in a news release. “Along with providing services people need, like affordable child care and interest-free student loans, that also means delivering new jobs and opportunities through resource development that is environmentally responsible."
Under the changes, the government would amend the Income Tax Act to implement the tax credit for LNG development.
It would also repeal the Liquefied Natural Gas Income Tax Act, which the government says created barriers for investment and left the province open to footing the bill for special industry tax and regulatory protections.
“Woodfibre LNG welcomes today’s B.C. government announcement of a new tax credit scheme for natural gas projects — this will help advance LNG projects in the province,” the company said in a statement to The Chief, adding later that the company assumes the credit will apply to it.
"We are reviewing the legislation to understand its full impact on the Woodfibre LNG project. However, in previous conversations we have had with Government they have been very clear that this legislation will apply to Woodfibre LNG.”
The government says the tax changes it is making will provide the fiscal framework needed for the LNG Canada $40-billion project in Kitimat, which proponents say will create 10,000 construction jobs and up to 950 permanent jobs in the processing terminal.
If it ultimately passes in Victoria, the new tax credit would go into effect for companies that qualify for it on Jan. 1, 2020.
It would be calculated at three per cent of the cost of natural gas and could be used to reduce B.C.'s corporate income tax rate to nine per cent from 12 per cent.
The government has already provided a PST performance payment agreement and industrial electricity rates on par with other industrial users in B.C.
James said that with the government's CleanBC program, it has a climate plan "that is the strongest in North America."
"Our GHG reduction targets are firm — we will be working with LNG Canada to make sure its development and operations live up to its environmental responsibilities to British Columbians,” she said.
The Green Party quickly sent out a news release attacking the new tax scheme.
“Continuing to push for LNG development is short-sighted and works directly against CleanBC objectives,” said Andrew Weaver, leader of the B.C. Greens in the release. “The legislation brought forward by this government is a generational sellout... We have only identified a pathway to take us only 75 percent of our 2030 emissions goals, yet we know that LNG Canada will emit an additional 3.45 megatonnes of greenhouse gases every year within our province alone, contributing massively to this gap. Government is demonstrating hypocrisy by supporting both LNG and CleanBC. They want to have their cake and eat it, too."
Though the three Greens voted against the tax credit in the legislature, the party continue to support the minority rule of the NDP, however. “BC Green caucus will be voting against this legislation every step of the way,” Weaver said. “In minority governments, there are disagreements between partners. This is one of those."
Squamish's Tracey Saxby, executive director of My Sea to Sky and a marine scientist called the new tax credit "crazy."
"The tax breaks and subsidies that have already been granted to this fledgling LNG industry are irresponsible and reckless," said Saxby.
"Subsidizing a new fossil fuel industry when we're facing a climate crisis is fracking crazy."
Saxby said the real issues of climate change are ignored by such subsidies to LNG.
"We need to acknowledge the cognitive dissonance of our governments: while we work to reduce our emissions, our provincial and federal governments continue to incentivize new emission intensive projects like LNG. This is a disappointing turnaround for the BC NDP, who spent years criticizing the BC Liberals for subsidizing LNG projects," she said.
"Imagine if instead, these incentives supported the transition to a renewable energy future. We cannot continue to build new fossil fuel infrastructure when we are facing a climate crisis that threatens the future of our planet and human existence."
Fast facts:
If it passes, the legislation would:
*amend the Income Tax Act to 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
