Tax rebate offered to lure LNG producers

Income tax paid in the first three years would be applied as a rebate to higher rates in year four and five

The first LNG tankers could be loading up in B.C. by 2017

VICTORIA – The B.C. government plans to impose a two-tiered income tax on liquefied natural gas exports, with rebates in early years until investors recover the capital cost of building LNG processing plants.

Finance Minister Mike de Jong presented the framework for LNG income tax with Tuesday’s provincial budget. It describes an income tax rate of up to 1.5 per cent on net revenue in the first three years of LNG production, with a second tier rate of up to seven per cent applicable after five years.

Income tax paid in the first three years would be applied as a rebate to higher rates in year four and five, so the top rate wouldn’t take full effect until year six. Producers also pay royalties on natural gas at the wellhead, and B.C.’s carbon tax would apply to gas burned in processing and refrigeration of LNG.

De Jong said he the final income tax rates will be set when the government introduces legislation this fall. That is when international companies are expected to begin making final investment decisions.

The budget includes government revenue and expense forecasts out to 2017, with no tax revenue projected from LNG until later. De Jong said the government is sticking to its “lofty” goal of having three export plants operating by 2020.

In his response to the budget, NDP finance critic Mike Farnworth said the government has missed its original target to have the LNG tax regime in place by the end of 2013. He zeroed in on Premier Christy Clark’s promise to have at least one LNG pipeline and plant in operation at Kitimat by 2015, and her campaign pledge to retire B.C.’s growing debt.

“Judging from today’s lack of LNG revenue, the premier’s promise to magically wipe away $70 billion worth of debts in 15 years is surely a fantasy,” Farnworth said.

Natural Gas Development Minister Rich Coleman denied the suggestion that the tax structure is behind schedule. He said he met with officials from Shell and other proponents last week, and they are “comfortable” with the progress to date.

“The opposition wouldn’t know LNG if it came up and bit them,” Coleman said. “They’re totally uninformed. They don’t support the process, they don’t support LNG, they never have.”

In a speech to the B.C. Chamber of Commerce in Vancouver Wednesday, Clark said not all of the 10 LNG plants currently proposed will proceed, but even one would be a significant source of revenue.

Asked by reporters if the budget means no LNG revenues by 2017, Clark said it is still possible.

“We don’t want to book money that we don’t have yet,” Clark said.

Just Posted

Nine fires burning in West Kootenay

All fires considered to be lightning caused.

West Kootenay afternoon storms spark fires

Lots of thunder and lightning, and little rain, as system moves through region

PLACE NAMES: Rossland neighbourhoods, Part 2

Early Rossland’s misaligned townsite additions frustrated the city engineer

Webster students find missing man

Man reported missing from his Warfield home Wednesday night

Getting to know you better: Rossland kids spend day with nature

Third annual bio-blitz brings kids more environmental awareness

10 facts about Father’s Day

Did you know that the special day for dads was first celebrated in 1910?

Bombers down B.C. Lions 33-23 in season opener

Former Lion Andrew Harris leads Winnipeg with 148 rushing yards

Northern B.C. family remembers murdered Indigenous woman with memorial walk

Still no closure for Ramona Wilson’s family 25 years later

B.C. university to offer mentorship program for former youth in care

Students using the provincial tuition waiver program will soon be able to form a community at KPU

You might not know these B.C. records are public

Hired a lawyer to file a civil claim? Those are published online

B.C. bus driver loses case to get job back after texting while driving full bus

An arbitator ruled that Tim Wesman’s phone usage was a “a reckless disregard for public safety”

Revamped B.C. Lions set to battle veteran Winnipeg Blue Bombers

The Lions’ first test of the season will be a big one

No business case for Trans Mountain expansion, says former environment minister

Cabinet is expected to announce its decision on the expansion of the Alberta-to-B.C. pipeline by Tuesday

LETTER: British Columbia’s forest industry crisis being made worse

Andrew Wilkinson warns of regulatory overload by John Horgan’s NDP

Most Read