British Columbia has introduced tax changes that confirm billions of dollars in fossil fuel subsidies for liquefied natural gas (LNG) development.
“Finance Minister Carole James says the change was introduced in legislation [Monday], and is meant to bring jobs and other financial benefits to the province through economic partnerships with Indigenous Peoples while also protecting the environment,” The Canadian Press reports. The tax credit would be calculated at 3% of the cost of natural gas, and could be used to reduce corporate income tax on qualifying projects from 12 to 9%.
The provincial government says the measure will provide the fiscal framework required to support the C$40-billion LNG Canada megaproject in Kitimat. Environmental groups see the announcement as a complication or far worse for the province’s greenhouse gas reduction plan.
In a release, Sierra Club BC said the announcement “confirms multi-billion dollar giveaways to foreign multinationals that make it impossible to meet meaningful climate targets.”
“Why is our government spending billions to subsidize fossil fuel corporations when the resulting extreme weather will put B.C. communities at risk of increasing wildfires and drought, and rob our young people of a livable future?” asked Campaigns Director Caitlyn Vernon. “We have just 11 years to limit climate pollution and defend our life support systems Yet instead of doubling down on the energy efficiency retrofits and public transportation infrastructure needed to fulfill the important CleanBC program, this government is throwing fuel on the flames of the climate crisis.”
The Sierra Club BC release says the tax changes enable more than $5 billion in provincial subsidies to LNG Canada, including cut-rate electricity, a provincial sales tax exemption during construction, elimination of a previous income tax on LNG, and a tax credit once the project goes into production.
“This massive giveaway can’t be squared with the provincial government’s commitment to reducing climate pollution,” Vernon said. “It’s like digging a hole and trying to fill it at the same time. There is nothing ‘clean’ about fracked gas, and we could be creating more jobs and security for our communities by investing in green, renewable energy instead.”
The Pembina Institute said the tax cut complicates B.C.’s efforts to hit its climate targets.
“With today’s legislation meant to attract LNG investment, it now becomes more important than ever to look at all options to reduce carbon pollution from such development,” said B.C. Regional Director Karen Tam Wu. “The natural gas sector is already B.C.’s largest source of industrial carbon pollution, and is poised to become even bigger. To have any credible chance of achieving B.C.’s climate targets, carbon pollution from the gas sector must be significantly reduced.” The province “has asserted that all new LNG development must fit within B.C.’s climate plan, but to date it has not demonstrated how this is possible,” Tam Wu added. “With the provincial government doubling down on attracting and securing LNG investments, it must also double down on taking bold action to reduce carbon pollution.”