Harper slashes federal taxes for BC LNG industry

Harper slashes federal taxes for BC LNG industry

Harper slashes federal taxes for BC LNG industry
Stephen Harper announces federal tax support for BC’s LNG industry in Surrey, BC (PMO)

Prime Minister Stephen Harper jumped on the BC LNG ship this week with the announcement of federal support for the embattled industry during a speech in Surrey, BC.

A PMO press release trumpeting the commitment stated:

[quote]Prime Minister Stephen Harper today announced the Government’s intent to support the creation of new and well-paying jobs in the emerging liquefied natural gas (LNG) industry.[/quote]

Give ’em what they want

The move follows BC Premier Christy Clark’s pattern of caving to the demands of foreign energy titans like Malaysia’s Petronas – slashing local taxes to counteract the failing economics of the Asian LNG market. Petronas CEO Shamsul Abbas has been vocal in demanding reductions in BC’s planned export tax regime, as well as more favourable federal capital cost allowances. With this week’s announcement from the Prime Minister, he has received essentially everything he asked for – including the fast-tracked approval of environmental permits for its controversial gas plant in the midst of the Skeena River estuary.

“In order to ensure that Canadian natural gas can reach new and growing international markets, and make it accessible for new domestic uses, the Government intends to establish a capital cost allowance rate of 30 per cent for equipment used in natural gas liquefaction and 10 per cent for buildings at a facility that liquefies natural gas,” the PMO’s statement noted.  “This tax relief will be available for capital assets acquired after February 19, 2015, and before 2025.”

The Conservative Government is also helping the LNG industry with the proposed weakening of environmental regulations for fossil fuel ports in its latest Omnibus bill.

What jobs?

Harper touted the job benefits from supporting the industry, yet many of the potential local jobs have already been promised to China, India and Malaysia through government agreements to import cheaper foreign temporary workers.

Meanwhile, even the enormous tax benefits the industry has already been granted can’t make up for the fact that Asian LNG prices have plummeted a record 61.7% over the past year – to a point well below the profitability line for BC exports. No wonder companies like Petronas, Chevron, BG Group, Apache, EnCana and EOG have already stalled on their final investment decisions or altogether abandoned ship on the fledgling industry.

It is a mark of sheer government incompetence – or utter neglect for the public benefit – to give an industry everything it asks for and still get nothing in return for the citizens of BC and Canada.


About Damien Gillis

Damien Gillis is a Vancouver-based documentary filmmaker with a focus on environmental and social justice issues - especially relating to water, energy, and saving Canada's wild salmon - working with many environmental organizations in BC and around the world. He is the co-founder, along with Rafe Mair, of The Common Sense Canadian, and a board member of both the BC Environmental Network and the Haig-Brown Institute.

18 thoughts on “Harper slashes federal taxes for BC LNG industry

  1. BC, the give away province as the price of the Canadian dollar continues to slide and real estate companies boost of Asian’s demand driving up the price because of the declining dollar. Great deal for foreigners but no deal for Canadians who must suck up the loss of their dollar in province where it is #1 highest cost to live. Even with the give away incentives from Harper and Clark the Malaysian company is still holding back from saying it is a done deal. Clark promised BC residents they would be rolling in dough not dolling it out because it is the worst possible time to even be considering investing in the LNG industry and the Malaysian company will agree with me no doubt.

  2. Time for a tax revolt ,if they are going to use my taxes to pay other countries to remove our resources,stop giving the bunch of thieves money.

    1. Same goes for most British Columbians, Ian. When you farm out the jobs to India, China and Malaysia on the cheap, not whole lot of local benefit left over…

  3. Damien, Its been reported now (Feb. 22) that Petronas, since Harper’s gift to them, is meeting with Coleman and Clark in March. If they agree to go ahead with the LNG plant are there any First Nations that will be opposed as it must impact their territorial land?

  4. Once again harper has shown his incompetence as an economist and solid contempt for Canada, Canadians, our future. He has shown repeatedly that he has no head for dealing with the big boys. He could have named a price, take it or leave it. They want it! They will pay for it! It’s not going anywhere and should stay put.

    He could have said “No, the jobs go to Canadians first. Always.” but he didn’t. He should have said “NO!, I am not weakening our environmental protections further”. Rather than considering what’s best for Canada and putting a pair of cajones on the table, he gave in, piddled on the floor and licked shoes.

    Threatens species at risk, endangering millions of human lives, flora for miles, killing tourism, elk haven’t bred fast enough to satisfy hunters who won’t be coming because the land and lakes are toxic from much of the mining, oil rigs and fracking and it’s just that that keeps the elk numbers low. Demand a list of chemicals in it’s entirety.

    We have truthful science showing chemicals used poison wells, lakes, rivers, soil, cause serious illnesses: miscarriages, respiratory problems, headaches, blood, liver, kidney, heart, brain and nerve damage/breakdown, kills wildlife, birds, fish and cause earthquakes. Sure! Bring it on. Give China all she wants, including jobs, and for peanuts risk unimaginable deaths.

    Is it not enough that there are predictions of massive earthquakes that could take out most the coast and tsunamis killing millions that would scream “NO” to fracking, upping the odds is not a sensible move in my opinion.???? Will the pittance of tax income cover lost lives, homes, devastated infrastructure? without With thanks to the access given corporation by a few bands 🙁 just as harper goes against the many (us) to please the few. WTF? Was nothing learned from Fukushima, Japan?

  5. Hmmmmm, Herr Harper electioneering par chance?
    And the obligatory “promise of jobs”? Irregardless of whether there will actually be jobs created.
    No wonders how compliant voters will be in a few years if unemployment is through the roof as plane loads of Temp Foriegn workers arrive to take the high paying jobs…..

    Sell the farm, break the eggs, cause the hens are laying for the foxes…..

  6. Let’s not forget, that 30% tax cut goes back to the Malaysian government, as Petronas is state owned! That saved money goes to services in THAT country.

  7. If LNG goes ahead in BC, that will ramp up demand for power from BC Hydro, even though the LNG plants would be using natural gas to generate electricity for the liquefaction process.

    More power demand from BC Hydro means Site C would be needed. At a cost of $9+ billion to our already debt-burdened public utility.

    More ruin-of-river projects would be needed, to provide additional power, costing more $billions to BC Hydro.

    If the Government’s goal is to destroy the Province of BC, they’re doing a real good job.

  8. This is nuts. We are basically paying them to take our natural gas. Which is produced by fracking and polluting lots of water.

    This is happening because our Governments are desperate for GDP growth, which is needed to maintain the financial/banking Ponzi scheme we unfortunately find ourselves in.

    BC Provincial debt is growing hugely, despite their claims of “balanced budget”.

    Growing the GDP to infinity is the Government’s strategy for dealing with increasing debt. It’s nuts.

    1. “We are basically paying them to take our natural gas.” That’s it in a nutshell, Norm.

      Harkens back to a legendary story about Tommy Douglas when he was premier of Saskatchewan.

      I cannot attest to whether the tale is true or apocryphal, but it’s certainly instructive to British Columbians in this particular situation. It goes like this:

      After meeting with oil tycoons considering doing business in the province and trying to secure a royalty and investment climate beneficial to their interests, Premier Douglas emerged from the closed-door gathering, whereupon several reporters asked him how it went.

      “Well, I’ve got some bad news and some good news,” Douglas told the press.

      “The bad news is the oil companies are leaving…The good news is they’re leaving the oil behind.”

      Clearly, Stephen Harper and Christy Clark do not subscribe to Premier Douglas’ wisdom. To them, apparently, it is better to give the resource and the jobs away for free then to hang onto them until a time they can be of real benefit to the public they are supposed to serve (or leave them in the ground to prevent further catastrophic climate change and ecological devastation).

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