FOES MAY JOIN FORCES ON REPEAL OF LNG TAX
Fuming Green leader tells premier not to expect any support from his corner
Premier John Horgan was nearing the end of the spring session of the legislature last week when Green Leader Andrew Weaver took him on an awkward trip down memory lane.
Just two days earlier, Horgan highlighted his positive relationship with the Greens in a fundraising letter: “Working together, we’ve been able to do some truly great things for the people of B.C.”
But with an hour to go during debate on the budget for the premier’s office Thursday, Weaver seized the moment to challenge his partner in power-sharing over the NDP’s contradictory positions on liquefied natural gas development.
Weaver recalled how in opposition, New Democrats denounced the B.C. Liberal government over its deal with Petronas, the Malaysian-government owned company, to develop the Pacific NorthWest LNG project.
He quoted the New Democrats: “A sellout.” He quoted Horgan himself: “They want a deal at any cost.” As for the Liberals’ proposed LNG tax regime, it was “written by industry and for industry.”
Now in government themselves, the New Democrats are planning to repeal that tax regime to improve the economics for a different project — LNG Canada — one in which Petronas had recently acquired a 25 per cent stake.
“Why are we going out of our way to offer a better deal than even the B.C. Liberals were willing to consider to bring an LNG industry to British Columbia?” Weaver challenged.
Because of changing markets and commodity prices, Horgan replied.
“When the former government put in place their LNG tax, they had an expectation of higher market prices, which would have led to potentially more revenues coming to the province.
“But as prices continued to be soft and demand continued to be flat, the prospect of an investment started to fall away. We saw proponent after proponent after proponent leaving the province because with the framework that was in place from the previous government, it wasn’t possible to realize a final investment decision.”
Among the projects to fall away was Pacific NorthWest LNG, its demise announced one week after Horgan took office as premier.
But LNG Canada, backed by Shell and partners in China, Japan and Korea (and now the Malaysians) remained active.
So the New Democrats crafted a combination of tax and regulatory relief for LNG Canada estimated at some $6 billion in relief over 40 years while still returning a projected $22 billion over the same period.
“The member and I have had long discussions about this,” said Horgan, addressing Weaver directly. “He understands the issue very well. If we are going to have a successful climate action plan and a robust economy, we have to keep our energyintensive, trade-exposed industries in a position of being able to be positive and also meet our climate objectives.”
But Weaver didn’t sound all that understanding. On the contrary, he reminded Horgan of his contradictory positions on climate action as well.
Weaver quoted the NDP opposition’s written submission to the federal environmental review of Pacific NorthWest LNG: “The project would increase the province’s entire carbon footprint for industry, transport and residential activity combined by 8.5 per cent. The proposal failed to meet the condition of air, land and water protection with respect to both the threat to marine habitat and species as well as to climate, through unacceptable high and inadequately regulated gases, greenhouse gas emissions.”
After letting the NDP’s own words sink in, the Green leader again challenged Horgan: “How does the premier reconcile his strong opposition to Petronas with his support for LNG Canada? I don’t see how you can have it both ways.”
Not so, returned Horgan. LNG Canada has already made greater strides in reducing emissions than the earlier project with more possibilities to come.
Then drawing on his diplomatic skills, he addressed Weaver’s own involvement in reshaping the province’s climate action targets.
The Green leader declared earlier this year that it would be “impossible” to reconcile emission-reduction targets with LNG development. Lately he’s agreed to work with the government and try to come up with a plausible revision to the climate action plan.
“I know the member’s participation in the development of our climate action plan going forward will be absolutely pivotal to our success,” said the premier. “It’s for that reason that I’m grateful that he’s on board to try to help square this circle.”
But for all Horgan’s efforts to butter him up, Weaver wasn’t inclined to be placated on the LNG file. Before sitting down Thursday, he fired a final shot at the premier, looking ahead to the fall session of the legislature and the NDP plan to repeal the LNG income tax regime brought in by the Liberals.
“I certainly hope government is looking to support from the B.C. Liberals for repealing the LNG Income Tax Act because the B.C. Greens have been quite clear that we will not support the repeal,” said Weaver. “I look forward to the debates ahead as the B.C. Liberals stand in support of government repealing the LNG Income Tax Act that they brought in.”
Some days, Horgan must wonder if the effort to get along with Weaver is worth it.
Still, the implied threat from Weaver points to the likely outcome of any showdown in the legislature over LNG.
Quite likely the Liberals would join the New Democrats in supporting changes to allow LNG Canada to go ahead, leaving Weaver on the sidelines, isolated and fuming.
I look forward to the debates ahead as the B.C. Liberals stand in support of government repealing the LNG Income Tax Act that they brought in.