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

VIDEO: Langley realtor builds holiday party for kids

Realtor Matthew Rufh hosted a gingerbread house-building party for the Langley Boys and Girls Club.

Giants defenceman Byram headed to NHL prospects game

The young player is following in the footsteps of former Giant Ty Ronning.

Langley Rams receiver inks with BC Lions

Jevon Cottoy joined the Rams this season and now has a multi-year contract with the Lions.

UPDATE: Heavy rainfall, strong winds in forecast for Lower Mainland

Heavy rains, snow expected till Friday morning

McGregor Says: Shopping husbands will survive

Columnist Jim McGregor offers a little advise to those husbands required to go Christmas shopping.

Omar Khadr wants changes to bail conditions

‘My life is held in suspension’, says the former Guantanamo Bay detainee

Sissons scores OT winner as Predators beat Canucks 4-3

VIDEO: Vancouver battles back to earn single point in Nashville

Lions announce seven members of coaching staff not coming back for 2019

The operational moves come two days after the Lions announced DeVone Claybrooks as the team’s new head coach

Christmas fun at Aldergrove Library: VIDEO & PHOTOS

Youngsters enjoyed decorating a Christmas tree with their homemade craft decorations

$12K awarded to atheist family who oppose Christmas, Hanukkah in B.C. classroom

Gary Mangel,May Yasue said holidays, Remembrance Day and Valentine’s Day not appropriate in preschool

Kodiaks avenge themselves against Pilots: ACTION PHOTOS

Aldergrove and Abbotsford Junior B hockey teams tie game at 5-5

Coach accused of sexual assault says apology letter was misinterpreted

Dave Brubaker has pleaded not guilty to one count of sexual assault and one count of invitation to sexual touching

Give the gift of nature this holiday season

Please don’t be mad, but I bought you a moose

Aboriginal poet faces backlash for calling out NHL-themed totem poles

Rebecca Thomas says she received backlash for asking a drugstore chain to remove NHL merchandise

Most Read