LNG storage tanks at Natori, Japan, 2016. Asian countries are the target customers for LNG from B.C. (Tom Fletcher/Black Press)

LNG storage tanks at Natori, Japan, 2016. Asian countries are the target customers for LNG from B.C. (Tom Fletcher/Black Press)

B.C. NDP moves to provide tax credits, tax cut for LNG Canada

Provincial sales tax break of $596 million repayable after construction

The B.C. government has presented its promised tax breaks for LNG Canada’s liquefied natural gas development at Kitimat, over the objections of three B.C. Green Party MLAs.

The legislation was supported by B.C. Liberal MLAs when it was introduced Monday by Finance Minister Carole James, and opposed by the three B.C. Green MLAs. That means its passage is assured, with 83 of 87 MLAs in favour of it.

The changes were agreed to by the government and the Shell-led consortium investing an estimated $40 billion in the LNG terminal and Pacific GasLink pipeline from Dawson Creek to Kitimat.

They include repealing an LNG income tax imposed during former premier Christy Clark’s push for LNG development at a nearby site at Prince Rupert. The amendments also provide a provincial sales tax exemption that the government estimates will save LNG Canada $596 million during construction. That amounts to an interest-free loan, as the agreement requires the company to begin paying the accumulated PST bill once the LNG starts shipping to customers in Asia.

The NDP government is also giving LNG Canada the province’s standard industrial rate for electricity, replacing a higher rate that was part of the previous government’s deal. James said the LNG Canada project is currently rated as the cleanest LNG project in the world, despite the consortium’s decision to power its refrigeration and compression equipment by burning natural gas.

Weaver said an LNG plant in Louisiana is already moving to all-electric LNG production for export, meaning LNG Canada will not be the cleanest by the time it begins shipping in 2024.

READ MORE: LNG Canada – how the deal got done

READ MORE: LNG Canada sponsors driver training

James said as of December, there were 600 people working on the LNG Canada project, and more work on the pipeline route. Discussions continue with protesters who have built a camp on the route near Smithers.


@tomfletcherbc
tfletcher@blackpress.ca

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