LNG Canada boosted by British Columbia tax cuts
British Columbia government has put measures in place to boost the development of liquefied natural gas industry in the province.
According to the B.C. premier John Horgan, the British Columbia government is overhauling the policy framework for future projects.
The framework includes four conditions, namely a guarantee of a fair return for B.C.’s natural resources, job and training opportunities for British Columbians, respect and making partners of First Nations and to protect the province’s air, land and water.
These four conditions form the basis for government’s discussions with LNG Canada, which is moving toward a final investment decision on a project that, if approved, would be the largest private-sector investment in B.C. history.
This project would see the construction of a natural gas pipeline from northeast B.C. to Kitimat, where a new terminal will process and ship LNG to Asian markets.
At the center of the discussions with LNG Canada is a revised fiscal framework that is designed to put natural gas development on a level playing field with other industrial sectors, accessing the same fiscal policies and working within the same overall B.C. framework to achieve greenhouse gas (GHG) reductions.
The new framework, to which LNG Canada will be subject, provides relief from provincial sales tax (PST), in line with the policy for manufacturing sectors, subject to repayment in the form of an equivalent operational payment.
It also provides new GHG emission standards under the Clean Growth Incentive Program and general industrial electricity rates consistent with other industrial users in B.C. while eliminating the LNG income tax that had required LNG-specific tax rates.
The premier said his government will also expect the LNG Canada project to fit within the goals of the province’s climate-change plan and, specifically, its legislated GHG reduction targets.
Responding to the government’s actions, LNG Canada briefly said through its social media channels that these measures are expected to promote access for natural gas from BC to be exported as LNG to the fastest growing economies in the world and are important to the joint venture participants in their effort to submit a competitive proposal.