Skip to content

MLA drills into LNG tax regime

Independent MLA, interim Green leader objects to bill

Independent MLA Andrew Weaver (Oak Bay-Gordon Head) motion to delay the Liquefied Natural Gas (LNG) Income Tax Act fell on deaf ears when it received third and final reading in legislature on Nov. 27.

Citing that no revenue projections were included in the debate on the tax regime, Weaver also identified what he says are possible tax loopholes.

"By delaying the bill's passage, the government would have had an opportunity to release its revenue models for public scrutiny, and ensure that British Columbians were made aware of both the opportunities and possible pitfalls associated with this bill."

Both the B.C. Liberal government and the NDP Opposition voted unanimously in favour of the bill, passing it into law, while one other Independent MLA (Vicki Huntington, Delta South) voted against it.

Weaver, who is also deputy leader of the Green Party of BC, says it was "perplexing" and "startling."

"This was supposed to be the legislature's opportunity to 'unpack' the government's LNG promises, but instead we have still received no substantive [revenue] information."

He also pointed to the government’s reduced LNG income tax rate at 3.5 per cent (rising to five per cent in 2037) being scaled back from projections of up to seven per cent in last spring's Budget 2014.

This reduces the provincial corporate tax rate for these companies to as low as eight per cent (from 11).

Cariboo-Chilcotin MLA Donna Barnett says it's easy for anyone against any bill to criticize its validity.

"He is incorrect, and in our opinion, he is on the wrong side of the issue.

"[Finance Minister Michael de Jong] says the LNG income tax gives proponents the certainty they need to make investment decisions. It also ensures British Columbians receive the revenues they deserve from this industry."

If there had been anything less than satisfactory in the bill, the Opposition would not have supported it, she adds.

"I certainly didn't see any loopholes."

Barnett says accurately predicting LNG revenue is "very difficult" to do because it depends on the world market, future investments and other factors.

Certainty is needed to get industry investors on board when it comes to taxes and government revenues, while Weaver's proposal to slow down the process "could jeopardize many jobs," she adds.

"Jobs are very important; more money is probably made from people working and paying income tax and sales tax and gas tax and you name it than anything [else]."

Barnett notes investors will now understand what tax they are going to undergo and LNG revenues will be assured.

"We are doing what is in the best interests of the citizens of [B.C.]; we're giving industry certainty and we're creating jobs.

"And, we're protecting the taxpayers by not giving the resource away."