Clark takes steps toward creation of prosperity fund for late-arriving LNG cash

VICTORIA — Premier Christy Clark’s government will introduce legislation to create a longpromised prosperity fund for liquefied natural gas revenue in spring 2017 — just before the next provincial election.

The timeline is contained in new mandate letters Clark sent to Finance Minister Mike de Jong and Natural Gas Development Minister Rich Coleman.

De Jong’s letter from the premier includes instructions to “present options to cabinet on the creation of the prosperity fund by the 2017 spring legislative session.” That date would coincide with the start of the government’s LNG income tax.

Creating a prosperity fund to pay off B.C.’s debt, reduce taxes and fund new building projects was a cornerstone of Clark’s 2013 re-election campaign, though its prominence has faded somewhat since progress on creating an LNG industry slowed.

Clark had estimated LNG revenues would fill the fund to “more than $100 billion” over 30 years and be used to “eliminate the provincial debt over time” (by the end of the 2020s) as well as reduce taxes and allow for investments in health care, education, employment and infrastructure. Her government’s pre-election throne speech raised the possibility of using the money to eliminate the provincial sales tax.

The government has more recently downgraded expectations for LNG revenue, as it awaits the first final investment decision by a proponent.

Pacific NorthWest LNG announced a “conditional” decision earlier this month, which hinges on obtaining federal environmental approval for its facility near Prince Rupert, as well as additional work to obtain the support of local First Nations.

Clark has said she wants clear rules on how the prosperity fund revenue could be spent, so that future governments can’t simply use the money to increase spending at an unsustainable rate.