Sukhjeevan Sharma,
INVC,
Canada,
All eyes will be on Victoria for the next several weeks as elected officials return to the B.C. legislature Monday to begin a rare fall sitting of the house that is expected to be dominated by the introduction of the government’s long-awaited tax structure for its proposed multi-billion liquified natural gas industry.Government house leader Mike de Jong, who is also the Minister of Finance, has said the government will introduce two separate pieces of legislation later in the month relating to its LNG plans. One piece will focus on the tax structure, which LNG project proponents have been eagerly waiting for, while the other will relate to the emissions targets project proponents will have to meet.“Those are sizeable investments with a lot at stake for the citizens of B.C. and the proponents. We want to get it right,” de Jong told reporters in Victoria last week. “There’s certainly been discussion around the overall tax structure. We want to be competitive as a jurisdiction so these proponents are able to make these sizeable investments.”
The Opposition NDP, meantime, is expected to use the fall sitting, the first since Premier Christy Clark became premier, to hammer the government on several outstanding issues: including the continued clawback of child-support payments for single parents on income assistance, the tailings pond breach at Mount Polley and the 2012 firings of Ministry of Health employees.“There is going to be a whole host of issues that we will be raising and addressing,” said Mike Farnworth, the NDP’s Justice critic and caucus house leader. “There is going to be LNG legislation, which will be interesting to see whether it is in fact the same tax regime that was sort of spelled out in the budget or whether they caved to industry.”
Introduction and debate of these two key pieces of legislation come at a critical time for B.C.’s LNG plans. Premier Clark, who will be in India Oct.9-18 on a trade mission, won the last election on a promise to create a robust LNG industry that would inject billions of dollars into the provincial economy, create thousands of jobs and, eventually, eliminate the provincial debt.There has been little significant movement on the file, which has led some critics to charge that B.C. is too far behind the international LNG footrace to ever make good on its promise of establishing a thriving industry. While there are over a dozen LNG projects in the works, all remain in the proposal stage and none of the proponents have made a final investment decision.Last summer, the Kitimat LNG project, one of the leading proponents, suffered a setback when its partner pulled out. And more recently, Petronas, the Malaysian-owned company with a $10-billion proposal on B.C.’s north coast, publicly stated it was considering pulling out because of, among other things, a lack of clarity on the province’s tax structure.Despite this very public bargaining strategy, Clark said late last week that she is confident that the Petronas project will go ahead.
Farnworth said it will be an “utter failure” if the government’s LNG tax is significantly lower than what it initially suggested. On release of the provincial budget in February, government sketched out a two-tired framework of the LNG tax, however, there has been some speculation that the numbers might have since been tweaked to accommodate project proponents.According to the budget numbers, the first tier of the LNG tax will be 1.5 per cent levied on an operator’s net proceeds. The second level, would be a tax of up to seven per cent after the plant is online and capital costs have been deducted.
“I think it would be an utter failure if the premier’s promises are proven to be nothing more than just a hollow phrase,” he said. “They made promises, they said that LNG was our future and a key part of that is ensuring that we get the revenues that British Columbians were led to expect would be there. And if now that is not the case, then the government has got a lot to answer for.”Meantime, Dermod Travis, the executive director of IntegrityBC, said he would like to see Speaker of the House Linda Reid use this sitting to address the spending issues that have plagued her this year, including the recent revelations that the RCMP at one point investigated the upgrades undertaken at her Richmond constituency office.
While Mounties found that no criminal acts had been committed, the Ontario Provincial Police force are currently reviewing those conclusions on request from the RCMP.“I think it is unprecedented to have a speaker of a legislature or the house of commons in modern times be under police investigation in this way,” he said. “And she has a duty to all of the members, because she is responsible to all of the members of the legislature, not just the government, to address these issues and ensure that she still has the confidence of the legislature.”
