B.C. LNG tax regime announcement coming today
Premier has promised liquefied natural gas industry revenue would help pay off B.C.'s debt
The B.C. government is expected to unveil today how it plans to tax companies that operate liquefied natural gas plants.
Both critics and investors have said the tax regime will play a big role in determining whether new B.C. LNG projects will go ahead.
Minister of Finance Mike de Jong has hinted the long-awaited legislation he'll introduce today will be similar to what he talked about last February—a two-tiered tax, balanced between taxpayer benefit and affordability for companies.
"The basic principle around ensuring there is a balance between being competitive on the one hand but deriving a fair return for the owners of the resource, British Columbians, will reveal itself," de Jong said Monday.
Last February, de Jong said the first tier would be a 1.5 per cent tax, which would rise up to seven per cent once companies have paid off the capital investment cost of building the LNG facilities.
But Bruce Ralston, the NDP's LNG critic, thinks the second-tier tax increase will never happen.
"Given what integrated multinationals can do with moving money around internally, I doubt the province will ever see revenue from the second tier," he said.
Today's legislation follows yesterday's announcement by B.C. Environment Minister Mary Polak on the new rules governing greenhouse-gas emissions for LNG.
Polak said her Greenhouse Gas Industrial Reporting and Control Act will permit companies to purchase carbon offsets and contribute to a technology fund to reach emission benchmarks that will be the lowest in the world.
Earlier this month, the B.C. LNG Alliance warned the window is closing on the province's trillion-dollar gas dream and it is worried about the industry's global competitiveness.
The CEO of one of the largest potential investors, Petronas, also threatened shelve his company's plans for a multibillion dollar LNG facility if the tax regime is not favourable.
With files from the CBC's Lisa Cordasco and The Canadian Press