British Columbia (B.C.) has introduced amendments to its Income Tax Act intended to support private sector investment in the province’s liquefied natural gas (LNG) industry. The amendments are the final piece in a policy framework for natural gas development announced by Premier John Horgan in March 2018.
Bill 10, the Income Tax Amendment Act, 2019, will repeal two pieces of legislation from the previous government — the Liquefied Natural Gas Income Tax Act and the Liquefied Natural Gas Project Agreements Act. The current NDP government says the two Liberal government Bills created barriers to LNG investment and could have left taxpayers liable for costs incurred by an LNG company from income tax or regulatory changes. Bill 10 will introduce an LNG tax credit that could reduce a qualifying company's corporate income tax rate from 12% to 9%.
The government says the new framework will deliver the fiscal setting needed for LNG Canada’s proposed $40-billion project in northern B.C. It is expected to create 10,000 construction jobs and up to 950 permanent jobs in the Kitimat processing terminal.
Andrew Weaver, leader of the B.C. Green Party, calls it a sellout:
“After years of criticizing the BC Liberals for their generous giveaway of our natural gas resources, the BC NDP have taken the giveaway to a whole new level. The legislation brought forward by this government is a generational sellout,” he said in a statement. The government’s CleanBC climate plan only takes the province 75% of the way to its 2030 emissions goal, says Weaver. LNG Canada’s plans will make it even more difficult to close that gap.
The Green Party holds the balance of power in the B.C. Legislature and Weaver has promised to oppose the legislation. However, there is little risk of the government falling. Bill 10 proceeded through second reading in the Legislature on March 27, 2019 with support from both the NDP and the Liberal caucus.