B.C. Grits call for release of tax deal with LNG Canada
V ICTORIA The B.C. government should make public the details of a tax agreement it has with the companies building the $40-billion LNG Canada project in Kitimat, say the Opposition Liberals.
Finance Minister Carole James said her government is finalizing an “operating performance payment agreement” with the LNG Canada consortium, though very little is known about the deal, which has not been made public.
James said Thursday the agreement centres on how government has agreed to exempt LNG Canada from the provincial sales tax on its construction, and then recapture that revenue over 20 years in new operational payments once the liquefied natural gas terminal is online.
“Basically, it will just align the payments and pieces they pay back,” said James. “We’re working through that piece and as we’ve done with the four (additional LNG) agreements, those have been out since March, we’ll release all the information.”
But the Liberals said in question period at the legislature that the government is not being transparent enough about negotiations that could contractually bind future governments to tax exemptions and revenue assumptions.
James argued negotiations have not yet been completed.
“What promises has the government made that will bind future governments or cost taxpayers in the future?” asked Liberal critic Mike de Jong. “What has this government promised in exchange for the decision to proceed, and how long have they promised it for?”
“It may be eminently defensible, but surely people are entitled to know.”
LNG Canada announced Oct. 1 it was proceeding with what will be the largest private sector project in Canadian history. The consortium of oil and gas companies, headed by Royal Dutch Shell, will receive more than $5 billion in tax breaks from the government of Premier John Horgan. However, the government could still receive $22 billion in revenue over 40 years, and the project is expected to create thousands of jobs.
Horgan has said the LNG Canada deal did not require an official project development agreement.
The previous Liberal government did sign a project development agreement with Malaysian state gas giant Petronas when it was trying to negotiate a Petronas LNG terminal. Petronas ultimately abandoned its bid and became a partner in LNG Canada.
The NDP in opposition was sharply critical about the Liberal agreement with Petronas, demanding it be made public.
“If the project development agreement is complete, British Columbians have a right to know what the B.C. Liberals have committed taxpayers to,” NDP MLA Bruce Ralston said in 2014.
“The problem is it’s difficult to take the premier (Christy Clark) at her word, so we have concerns that it may not be as complete as she would have British Columbians believe.”
The Liberals tabled the deal in the legislature for debate in 2015 as part of a bill that would require all future project development agreements on LNG be made public by government.
De Jong said Thursday the NDP has indicated it wants to repeal that 2015 legislation, though James did not comment on that during debate in the legislature.