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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

test tube with the blood test is on the table next to the documents. Positive test for coronavirus covid-19. The concept of fighting a dangerous Chinese disease.
Interior Health records third COVID-19 death

A new community outbreak was reported at Okanagan Men’s Centre in Lake Country

The site plan for the Stoked Living development on Hay Rd. (Stoked Living)
Rental housing agreement approved for Hay Rd. project

Stoked Living development guarantees 10 rental units for 12 years

Revelstoke Fire Rescue Services. (File)
UPDATE: RCMP say fire at Rivers Edge suspicious

Second fire in less than a week in Revelstoke contained to one unit

Remembrance Day in Revelstoke, Nov. 11, 2019. (Jocelyn Doll/Revelstoke Review)
Revelstoke Remembrance Day celebrations different during pandemic

The Legion is asking you to stay home as a limit of 100 people are allowed at the ceremony

A municipal election is likely coming up in January. (Jocelyn Doll/Revelstoke Review)
City takes steps to host byelection by end of January

A ministerial order is required to temporarily change the Election Bylaw

Provincial health officer Dr. Bonnie Henry updates the COVID-19 situation, B.C. legislature, Oct. 26, 2020. (B.C. government)
B.C.’s COVID-19 case count jumps by 287, another senior home outbreak

Two more deaths recorded, community outbreak in Okanagan

An untitled Emily Carr painting of Finlayson Point was donated to the Art Gallery of Greater Victoria by brothers Ian and Andrew Burchett. The painting had been in their family for several decades. (Courtesy of the Art Gallery of Greater Victoria)
Never before seen painting by famed B.C. artist Emily Carr gifted to Victoria gallery

Painting among several donated to Art Gallery of Greater Victoria

The B.C. Centre for Disease control is telling people to keep an eye out for the poisonous death cap mushroom, which thrives in fall weather conditions. (Paul Kroeger/BCCDC)
Highly poisonous death cap mushroom discovered in Comox

This marks first discovery on Vancouver Island outside Greater Victoria area

100 Mile Conservation officer Joel Kline gingerly holds an injured but very much alive bald eagle after extracting him from a motorist’s minivan. (Photo submitted)
Rescued bald eagle that came to life in B.C. man’s car had lead poisoning

Bird is on medication and recovering in rehab centre

In May 2019, Brennan Joel Metlewsky and Jordan Robert Kupser were charged with attempted murder, robbery and aggravated assault stemming from an incident that took place in Vernon in 2017. (Facebook photo)
Attempted murder charges dropped for pair accused in Vernon stabbing

Brennan Metlewsky and Jordan Kupser will appear in Supreme Court to set a new trial date

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

A boat moored at Turtle Bay Marina was reported stolen Oct. 1 and remains under investigation. (Contributed)
North Okanagan crimes remain unsolved

Boat stolen from marina, theft of siding and vehicle break and enter

Janet Austin, lieutenant governor of B.C., was presented with the first poppy of the Royal Canadian Legion’s 2020 Poppy Campaign on Wednesday. (Kendra Crighton/News Staff)
PHOTOS: B.C. Lieutenant Governor receives first poppy to kick off 2020 campaign

Janet Austin ‘honour and a privileged’ to receive the poppy

An air tanker drops fire retardant on the Christie Mountain wildfire along Skaha Lake in Penticton, B.C. Thursday, August 20, 2020. (Jonathan Hayward - The Canadian Press file)
North Okanagan firefighters thanked for help in Christie Mountain wildfire

Regional District of Okanagan-Similkameen send thank-you note to Vernon firefighters

Most Read