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

4-H Club cleans up Quesnel River Walk

It’s part of their initiative to protect the environment and teach its members about nature

UPDATE, 4:50 P.M.: Gas leak near Dragon Lake Hill closes one lane of southbound traffic

4:50 p.m.: one Highway 97 southbound lane will likely need to be closed overnight, says FortisBC

CRD director John Massier hopes to support Area C economy in next four years

Area C director has been in the role for 10 years, and will take on four more by acclamation

Quesnel Kangaroos return to West Fraser Centre

CIHL team split a pair of games; thrashing the Ice Demons and falling to the River Kings

Tolko workers on strike in Williams Lake

Negotiations set to continue in Kelowna

VIDEO: First legal cannabis purchases as midnight strikes in eastern Canada

Newfoundland and Labrador was the first province to kick off the sale of cannabis, just after midnight local time

Boeser tallies in OT as Canucks beat Penguins 3-2

Vancouver wins without star rookie Pettersson

Mayor of Kamloops says ‘history has been made’ with vote on B.C.’s lone pot shop

The store to be run by the province in B.C.’s Interior is opening Wednesday as pot sales become legal across Canada

New bus route to ‘replace’ Greyhound along Trans-Canada Highway

Rider Express Transportation says they will soon begin a bus service from Winnipeg to Vancouver

U.S. pot firm urges Trump to deny Canadian producers ‘competitive advantage’

The challenge for U.S. firms lies in the fact that while recreational cannabis is legal in nine states and medicinal pot in 22 others, it remains illegal under federal law

Government says imprisoned Canadian terror suspects must face consequences

Public Safety Minister Ralph Goodale showed little sympathy Tuesday for such individuals who now want to return to Canada

How rules for inmate segregation in Canada will change under Bill C-83

Federal government proposing changes to rules around inmates in federal correctional institutions

Canada Post union issues strike notice; rotating strikes could begin Monday

Union says rotating strikes will begin if agreements aren’t reached with bargaining units

Carole James avoids questions on B.C.’s payroll tax (with video)

Green MLA Adam Olsen cites huge tax increase for local business

Most Read