I really think someone should tell Premier Christy Clark to have a look at a calendar, specifically what year it is.
Then explain to her that elections in this province are held every four years.
I say this because, judging by the February 12 throne speech, she’s a little confused.
I refer to the bold announcement of the BC Prosperity Fund, to be financed by a new tax on the LNG industry, which will accumulate enough money to pay off the province’s deficit, eliminate the provincial sales tax, improve social services, increase education funding, build vital infrastructure and put a Rolls Royce in everyone’s driveway (okay, I made up that last one).
Now that’s all good stuff, but those good times aren’t going to roll any time soon.
While the BC LNG Co-op in Kitimat may get into production in 2015, the revenue from an export tax on that small facility is not going to make much of a dent in the deficit, let alone do anything else.
As for the big boys looking at plants in that community – Chevron and Shell – a realistic assessment suggests they won’t be in full production until mid-2017 at the earliest, 2018 more likely.
And for any of the proposed plants for Prince Rupert it will be sometime after that.
In other words substantial LNG export tax revenue is not going to start pouring into this new fund until after the election in May 2017.
Which means Clark has essentially promised a brave new world that she can’t possibly deliver within the four-year mandate of the government to be elected in three months’ time.
Where I am confused too – as are gas patch players – is that she should even suggest such a tax.
I am going to throw out a few facts here to explain why we are confused.
First, in September 2011, while editor of The Northern Sentinel in Kitimat, I interviewed Clark’s parliamentary secretary, John Les.
This is what he told me in answer to a question about whether the province could actually create the jobs it was touting:
“It’s not for government to actually do the job creation, that’s what the private sector does so well.” Rather government’s job was to create the conditions that helped the private sector create those jobs.
And subsequently his boss made it clear she was ready to move Heaven and Earth to help the LNG industry create those jobs.
Second, the throne speech says, “Our province faces fierce competition from Australia.”
Third, a government document released in the same week as the throne speech says Australia’s natural gas tax and royalty set up “is up to one-third higher than BC’s.”
So, apparently we have an edge on our “fierce” Aussie competitors.
And what’s our response? Jack up the costs of LNG in BC.
You see my problem?
It gets even more baffling.
Prior to the throne speech, the president of the Canadian Association of Petroleum Producers said the industry wanted LNG plants to be reclassified as manufacturing plants rather than part of the gas transmission process.
If that happened, the companies would be able to write off 90 percent of their capital investments over seven years rather than over 27 years.
That’s important because it would let the LNG plant owners off the hook for an estimated $1.5 billion dollars in federal taxes – minimum.
Which obviously increases their competitive advantage.
So the industry is lobbying the federal government for a tax break while the province promises to slap one on?
Bizarre.
One last point: the New Democrats have been quick to pour scorn on the Prosperity Fund fantasy. But not a word on whether they, if elected in May as looks likely, might follow the same path.
Formerly the editor of The Northern Sentinel in Kitimat, Malcolm Baxter now lives in Terrace, B.C.
msdbax@citywest.ca.
