Straight Talk

Premier John Horgan offers incentives to LNG producers—and so far, that's not a cue for a spring election

by Charlie Smith on March 22nd, 2018 at 2:03 PM
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      The biggest news story out of the provincial capital is a looming sweetheart deal for a $40-billion liquefied-natural-gas facility and pipeline.

      Premier John Horgan has announced that LNG Canada and other LNG producers would receive "relief" from provincial sales taxes and new greenhouse gas emission standards.

      In addition, LNG companies would benefit from discounted electricity rates, matching what's provided to other industrial users, as well as the elimination of an LNG income tax.

      “No premier or government can dismiss this kind of critical economic opportunity for the people of British Columbia,” Horgan said in a news release. “But neither will we turn our back on our commitment to climate targets, or our path to reconciliation with Indigenous peoples.”

      Shell Canada has a 50 percent stake in LNG Canada, which has been proposed for Kitimat.

      The other shareholders are PetroChina, Korea Gas Corporation, and Mitsubishi.

      It comes as LNG prices have been on the rise in Asia.

      Last month, LNG Canada announced that it shortlisted two finalists to conduct energy, procurement, and construction work on an export facility in Kitimat.

      A final investment decision is expected later this year.

      “The LNG Canada proposal has the potential to earn tens of billions of dollars and create thousands of jobs for British Columbians over the life of the project,” Horgan said today. “It’s a private-sector investment that could benefit our province for decades to come, but not at any price—we need to make sure the values British Columbians believe in come first.”

      Andrew Weaver's Green caucus also includes Adam Olsen and Sonia Furstenau.

      B.C. Greens choose their words carefully

      B.C. Green Leader Andrew Weaver has said in the past that he is prepared to bring down the NDP minority government if it doesn't limit greenhouse gas emissions.

      Today on his website, Weaver declared that his three-member caucus will not support exempting LNG companies from carbon-tax increases. There's no mention in the news release of what Horgan has discussed: relief from the sales tax and the LNG tax.

      "Extending the carbon tax to fugitive emissions is a core component of our confidence and supply agreement with the BC NDP," Weaver wrote.

      Moreover, he declared: "The confidence and supply agreement requires government to implement a climate action strategy to meet B.C.’s legislated emissions reduction targets of not less than 40% below 2007 levels by 2030 and 80% below 2007 level by 2050."

      In a B.C. Green party news release, Weaver pointed out that "the numbers on LNG simply don't add up" with regard to the province's climate targets.

      “Not only is a plan to meet our climate commitments a core component of our Confidence and Supply Agreement (CASA) which forms the stability of this government, it is essential for ensuring we do not betray our duty to future generations.” Weaver stated in the news release. “When it became clear that the government intended to propose measures that are incompatible with B.C.’s ability to meet our climate targets, we felt it was our responsibility to communicate to LNG Canada that if these measures were to go ahead unamended, we would no longer have confidence in government.

      “To be clear—our caucus is fully committed to working in partnership with the B.C. NDP government to enact a plan to meet our climate targets and in attracting the investments we need to build a 21st century economy," he continued. "We will continue to hold this government to account on all its promises, including our responsibility to the next generation and our international commitments to act on climate change.”

      So does this mean that Weaver is going to vote to bring down the government?

      There is no clear indication that this will happen from what the B.C. Greens issued today.

      According to the B.C. government website, this province emitted 61.6 million tonnes of carbon dioxide equivalents into the atmosphere in 2015. That's down from 64.7 million tonnes in 2007.

      The LNG Canada plant could add at least four million tonnes per year, according to the B.C. government. 

      The Greenhouse Gas Reduction Targets Act requires the province to reduce these emissions by 80 percent below 2007 levels by 2050.

      In November, I wrote a column explaining why Horgan and the B.C. NDP might want to engineer a spring election.

      One reason might be to catch the new B.C. Liberal leader (Andrew Wilkinson) flat-footed.

      But if Weaver wants to keep the government in power until a referendum on proportional representation in the fall, he could face the wrath of environmentalists who oppose a massive new LNG plant.

      Some of them are already upset with Weaver for not bringing down the NDP government when it approved completion of the $10.7-billion Site C dam.

      Former premier Christy Clark's party was defeated last year in the legislature, but her two biggest policy goals—the Site C dam and a large LNG plant—could still come to fruition under the NDP-Green alliance.

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