LNG protected from tax hikes for 25 years in deal with B.C. government
Finance Minister unveils details of agreement with Pacific NorthWest LNG
The B.C. government has agreed to compensate a major liquefied natural gas project if it raises taxes on the LNG industry for a 25-year period after the plant starts shipping.
Finance Minister Mike de Jong released details on Monday of the $36-billion deal it reached in May with Pacific NorthWest LNG, a consortium led by Malaysian energy giant Petronas which wants to build an LNG export terminal near Prince Rupert.
Under the terms of the agreement, B.C. has agreed to compensate the LNG consortium if taxes on the industry are raised, natural gas tax credits are reduced or new carbon taxes targeting the LNG sector are imposed. But the minister says the agreement does not protect the company from increases in provincial sales and corporate taxes.
De Jong says the deal gives the company the certainty it needs to make a final investment decision on a project he says should contribute more than $9 billion into provincial coffers in its first decade and create up to 4,500 jobs.
"It provides a measure of stability that says to them, here are the rules of the game that will govern this industrial activity within this jurisdiction for the term of the agreement and they can bank on that and know those rules are not likely to change," he said.
Legislature recalled for rare summer session
On Monday, the government will convene for a rare, summer session of the legislature to debate the deal.
NDP MLA Bruce Ralston says it's a good deal for the company, but not good enough for British Columbians. He says it should have contained firmer commitments on jobs and training.
The project faces a number of hurdles including opposition from native groups who have vowed to fight it in court.
In May, the Lax Kw'alaams Band rejected a $1 billion deal with Pacific NorthWest LNG to build a pipeline and terminal in Prince Rupert.
On Monday, those opposed gained another supporter when the Gitga'at First Nation announced it would launch a judicial review of the LNG project, claiming it had been excluded from the provincial environmental assessment. The project is still awaiting federal environmental approvals.
With files from The Canadian Press