In his cheerleading for Woodfibre LNG, BC Chamber of Commerce President John Winter completely ignores the economic downside of Woodfibre and B.C. LNG export.
(1) The $80 Million Electrical Subsidy for Woodfibre LNG: The people of B.C. will be paying a million dollar annual subsidy for EACH of 80 WLNG jobs - ongoing, every year - an easy calculation based on Woodfibre LNG’s power-hog electricity consumption at the bulk industrial rate, one third of our BC Hydro’s purchase price of incremental private power.
On this basis alone, Mr. Winter is playing rather fast and loose with money that you and I, and the members of his BC Chamber of Commerce will pay for our residential and small business electricity, to cover the Woodfibre LNG subsidy. We’ll never get this money back.
(2) Higher Domestic Natural Gas Prices for Home and Business Heating: Mr. Winter is also not very concerned about the higher B.C .domestic rates that all of us will be paying for our natural gas, to match the significantly higher prices that the B.C. LNG export lobby expects to get when they start shipping to Asia. If he had greater concern for his small business members or the rest of the residents of B.C., he would consider this obvious economic problem.
Higher domestic prices will also put a damper on British Columbians being able to take advantage of natural gas as a transportation alternative, or B.C. businesses being able to acquire economical hydrocarbon feedstocks. Again, Mr. Winter avoids looking at the bigger economic picture.
(3) Resource Development: While it’s common to claim that all resource development pays for health, education, etc. in British Columbia, Mr. Winter clearly hasn’t noticed how little money B.C. is receiving in natural gas taxes and royalties lately, with all the tax credits that the government allows the energy lobbies.
And he certainly doesn’t know the structure of the proposed LNG taxes and royalties that will only come to the legislature in late fall, but it’s pretty well guaranteed that with declining international markets for LNG, the B.C. taxes and royalties will drop lower and lower, while the tax holidays on profits before ANY taxes and royalties are paid will stretch out years longer. There is very little chance that LNG revenue will even cover the interest on British Columbia’s growing direct debt, and no chance at all that we’ll ever see the mythical LNG “Prosperity Fund."
(4) Corporate Structuring to Avoid Taxes and Royalties: Mr. Winter doesn’t mention this at all, but it’s also guaranteed that the foreign owners of Woodfibre LNG and all the other players in B.C. LNG export will structure their companies so that the BC components will avoid B.C. taxes and royalties on profits, while the actual profit moves elsewhere. Some of these foreign owners already have convictions for outright tax evasion. It’s worth Googling their past financial and environmental practices. Although it’s not mentioned at Woodfibre LNG’s “about us”, the owner is Indonesian billionaire Sukanto Tanoto.
Doug Morrison
Squamish
