The B.C. government will scrap a special LNG income tax, exempt plant construction from the PST and charge LNG plants standard rates for electricity.
The new fiscal framework was announced Thursday March 22 in anticipation of LNG Canada making a final investment decision on its $40 billion Kitimat project in the coming months or weeks.
The government will also give LNG Canada and other large emitters a break on carbon taxes, if they can meet strict new benchmarks for reducing greenhouse gas emissions, and will aggressively pursue electrification of natural gas fields.
Those commitments are contingent on LNG Canada making a final investment decision by November.
LNG Canada has already spent $100 million getting the project FID-ready. All major environmental permits for the LNG plant in kitimat and a new gas pipeline are already approved, and LNG Canada has agreements in place with 16 First Nations, although the government acknowledged there are still some holdouts among some First Nations.
The government estimates the $40 billion project would create 10,000 full-time equivalent jobs, peaking in 2021, 950 permanent high-paying jobs once completed, and $22 billion in direct government revenue over 40 years.
Whether the agreement to facilitate the development of an LNG industry causes the NDP government to fall is something Green Party Leader Andrew Weaver is expected to answer later this afternoon in a press conference. Weaver has vowed to bring the government down if it continues to pursue an LNG industry.
Weaver has argued that B.C. cannot build a single large LNG plant and still meet its climate change targets.
In a technical briefing this morning, government staff admitted building an LNG industry will make it challenging to meet its greenhouse gas reductions targets.
But the government believes it can be done, in part through aggressive electrification of both the natural gas fields and the residential sector, as natural gas for heating is phased out and replaced with electric heating. It also pointed out that the LNG Canada plant would be the lowest emitting plant of its size in the world to date, and that failing to seize on a growing market for LNG in Asia will simply allow LNG produced in other countries with less stringent climate change policies to meet the demand.
More to come.