British Columbia

Carbon tax increase would jeapordize LNG economy, says industry

The premier of B.C. has said the provincial government will not implement a carbon tax increase without further consultation with the public and industry.

The LNG industry already pays about $55/tonne for carbon, says LNG Alliance

LNG plants like this one in Delta, B.C. will take 4 to 5 years to build and the time to start is now, says the LNG Alliance. (The Canadian Press)

The premier of B.C. has said the provincial government will not implement a carbon tax increase without further consultation with the public and industry, but the LNG Alliance is already firm on its position against the increase.

A climate change leadership team, composed of businesses, First Nations, local governments, academia, and environmental groups, put forward a report recommending a $10 carbon tax increase in 2018 and a one percent decrease in the provincial sales tax. The report was commissioned by the B.C. government.

The LNG Alliance participated in the climate leadership talks and it says there was consensus on all points except one — a rise in the carbon tax. Premier Christy Clark froze the carbon tax in 2012.

"We're not opposed to a price on carbon. We think that's the right way to go. The concern we have is we have to wait until other jurisdictions catch up," said David Keane, president of the LNG Alliance.

Waiting for others to catch up

Consumers and businesses in B.C. currently pay $30 per tonne of carbon. Those in the LNG industry also have to buy carbon offsets, which Keane says can add up to about $55 in total per tonne.

"We're already paying, what in my view, arguably, is one of the highest prices on carbon in the world," he said.

The provincial environment minister, Mary Polak, agrees. She told CBC last week B.C. has one of the "highest cost and broadest" carbon taxes in the world.

Both Polak and Keane say committing to a carbon tax increase too quickly would jeopardize the province's economic standing.

David Keane, president of the LNG Alliance is urging the B.C. government to wait until other jurisdictions catch up in their carbon pricing before raising the carbon tax. (Charlie Cho / CBC)

"Making sure that we're waiting until other jurisdictions have caught up to at least some degree of parity to B.C. is prudent," said Keane. A carbon tax raise will affect everything from gas prices to home heating bills, he added.

Keane also says the recommended one per cent decrease in the provincial sales tax would not be enough to offset the impact of a carbon tax increase on the LNG industry.

The case for LNG

Keane says demand for LNG is projected to double in the next four to five years and now is the time to invest in the industry, when resource prices are low, he said. In fact, an investment into LNG is an investment into the environment, according to Keane.

"You'll reduce global greenhouse gas emissions if you're replacing coal with natural gas by up to 40 per cent."

Its a matter of giving the LNG industry in B.C. the best chance to succeed, said Keane.

"If we're going to be successful we have to be globally competitive," he said.

To listen to the full audio, click the link labelled: LNG Alliance argues against carbon tax increase.


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