On Thursday, the British Columbia government passed the Income Tax Amendment Act, finalizing the fiscal framework for liquefied natural gas (LNG) projects in the province. NDP Premier John Horgan said it will secure the largest private-sector investment in Canadian history.
Last year, the joint venture of Petronas, Shell Canada Energy, and PetroChina Canada Ltd. announced that LNG Canada’s CAD $40-billion project on B.C.’s northern coast would proceed. Changes to the Income Tax Act allow for the implementation of the tax credit for LNG development in the province. Both the Liquefied Natural Gas Income Tax Act and the Liquefied Natural Gas Project Agreements Act are now no longer in effect, which had set out the previous financial framework for LNG projects in B.C.
LNG Canada’s project entails a pipeline carrying natural gas from Dawson Creek to a new processing plant on the coast in Kitimat. Heads of the First Nations LNG Alliance Karen Ogen-Toews applauds the tax breaks and tax credits, which she says are needed to get B.C. gas to market, and said the project could be a windfall for Northern B.C. communities, "There's a definite opportunity. Once the pipe is in the ground, our community will be seeing legacy payments." She said northern B.C. towns have suffered wildfires, lost logging and mill jobs to pine beetles and watched mines close.
Premier Horgan said the government has set four stringent conditions for LNG production in B.C., including a fair return for natural resources, jobs for residents, and partnerships with First Nations. The Premier said the LNG Canada project meets those conditions and is expected to generate CAD $23 billion in government revenues.