Media Statement: October 21, 2014
LNG Tax Regime a Generational Sellout
For immediate release
Victoria, B.C. – The B.C. Government’s proposed Liquefied Natural Gas Income Tax Act amounts to a generational sellout says Andrew Weaver, MLA for Oak Bay – Gordon Head and Deputy Leader of the B.C. Green Party.
The legislation, which was tabled today, outlines the structure of a new income tax that would apply to LNG producers. Under the current bill, the LNG income tax that was originally proposed back in February of this year was slashed from 7% to 3.5%.
“The LNG Income Tax amounts to a generational sell-out of our natural gas resources,” says Andrew Weaver. “The government is cutting taxes to the bare bone in a last ditch effort to land their hypothetical LNG industry. It is a high-risk gamble with low-returns.”
Under the proposed legislation, the LNG Income Tax would be effective as of January 1, 2017. Companies will initially pay 1.5% on their net operating income. Once net operating losses and capital investments are paid off, the LNG income tax rate will initially increase to 3.5% and then further increase to 5% as of 2037. The government is also offering LNG proponents a B.C. Corporate Income Tax Credit that will reduce that corporate income tax rate from 11% to 8%.
The Minister of Finance rolled back revenue expectations today claiming that under the new tax regime, it would likely take an additional ten to fifteen years beyond initial projections to eliminate the provincial debt.
In his response to the recent throne speech Andrew Weaver outlined a viable alternative vision for a diversified, 21st century economy based on strong existing industries and major up-and-coming sectors like the clean tech sector.
“Rather than gambling revenue expectations and election promises on a hypothetical LNG industry that won’t exist for years, we should instead invest in existing, up-and-coming industries like the cleantech sector that are proven to produce clear returns. Doing so would yield greater economic growth, far faster, while also helping to address the challenges of global warming.”
Mat Wright – Press Secretary, Andrew Weaver MLA
Cell: 1 250 216 3382
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