BC NDP Premier John Horgan has blossomed, is the real deal, and will win a majority government in 2020

BC Taxpayers Digging Deep for LNG Subsidies, Tax Breaks

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Eliminating the LNG income tax

Brought in by the previous Liberal government when LNG prices in Asia were much higher, the LNG income tax was intended to capture a portion of the economic rent associated with selling B.C. gas in Asia. This effort was watered down by a major reduction in the tax rate, as well as by the ability of companies to fully deduct capital costs before paying any LNG income tax. That meant that B.C. would have been underwriting any cost overruns for the project. Moreover, the LNG income tax was accompanied by a reduction in the regular corporate income tax for LNG producers, so it’s not clear that B.C. would have gained at all in terms of revenues.

Instead, the government will rely on the regular 12-per-cent corporate income tax. The catch is that for gas landed in Asia at close to break-even prices there will be essentially no income to tax. Much also depends on final capital costs for construction and how quickly those costs can be written off against revenues. Another wild card is the extent to which the partner companies are able to engage in transfer pricing that would lower profits declared in B.C.

Royalties are supposed to be a principal way that the people of B.C. get a share of the development profits from exploiting the public gas resource. Unfortunately, with the current regime B.C. is effectively giving its gas away. Royalties on record levels of production continue to be extremely low, and companies have stockpiled some $3 billion in credits for fracking and other infrastructure that will be used to reduce future royalties.

There is a trade-off between public revenues from new economic activity and any incentives one makes to LNG proponents. It is not clear how the new B.C. government intends to implement its commitment to “guarantee a fair return for B.C.’s natural resources.” Its backgrounder states it “will utilize a number of other tax and royalty measures under its new fiscal framework” with no further details.

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Cheap electricity is a subsidy

For the government, LNG is an appealing new source of demand for electric power in light of the controversial approval of the now-$10.7 billion Site C hydro project, which will add 5,100 gigawatt hours per year of new supply. When it was approved by the previous BC Liberal government, Site C was predicated on massive new LNG investments — so its business case was greatly undermined when LNG failed to take off.

Based on project descriptions, Woodfibre LNG and LNG Canada will each have electricity demand of around 1,200 gigawatt hours per year. Another 2,000 to 2,500 gigawatt hours per year would be required for incremental upstream gas extraction and processing.

Thus, we are looking at 4,400 to 4,900 gigawatt hours of incremental demand from LNG, fed by the Site C dam.

The B.C. government is proposing to lower the rate paid for electric power for new LNG facilities to the “heritage” rate for BC Hydro electricity. The previous Liberal government had published a schedule of electricity pricing for LNG at prices somewhat lower ($86.55 per megawatt hour in 2023) than the cost of Site C power ($88 to $110 per megawatt hour).

Instead, the heritage rate for industrial customers is more like $40 per megawatt hour — less than half the cost of supplying new power through the Site C dam. The value of that cheap power is worth tens of millions of dollars per year to LNG proponents.

For each of Woodfibre LNG and LNG Canada (at full build-out) the value of that subsidy ranges from $56 to $83 million per year (depending on the final cost of Site C, which could escalate further), which will be paid by all other customers through higher rates.

As we’ve documented, Site C is not needed if B.C. were to wind down its fossil fuel industries, as the science says we should. Instead, we are building power we don’t really need to power fossil fuel production that is inconsistent with Canada’s commitments under the Paris Agreement.

I think he's trying to have the BC federal by-election occur as close as possible to the Alberta provincial election when the Notley Alberta NDP government is expected to lose power.

Mr. Magoo wrote:

When this thread is finally closed, perhaps you should consider having it printed out as a book and properly bound.  Wouldn't that be a wonderful way to show your love to the best politician the world has ever known?

No, that's David Eby

http://rabble.ca/babble/alberta-and-british-columbia/bcers-are-love-thei...

Horgan can go fuck himself.  Basically he's telling us that we should accept BC NDP trampling indigenous rights because he generally feels bad about it.

Crying yourself to sleep at night doesn't give you a pass for being a stooge for big gas.

BC has the best government in Canada right now and it's still nowhere close to acceptable.

But my federal membership is contingent on my provincial membership so technically I'm still a member of the party.

The BC NDP threw the PR referendum so that members like me wouldn't leave to start a provincial eco-socialist party.

NorthReport wrote:

Sounds to me like it's my ball and if you don't play by my rules I'm taking it home so no one else can play. What a farce!

..why don't you debate nr rather than just making these stupid meaningless comments. wage zombie raises legitimate issues and you disrespect him. you pretend to be politically savvy but these stupid comments say otherwise. debate is what you need to do.

Why would I want the Libs in power?  BC NDP is willing to buy my complicity in destroying the planet by waiving my MSP premiums.  BC Liberals would charge me for that shit.

If the planet's going to burn anyway, why pay more?