Effective January 1, 2020, a new natural gas tax credit will be available to qualifying LNG corporations, currently calculated at 3% of the cost of natural gas. The tax credit can be used to reduce B.C.’s corporate income tax rate from 12% to 9%.
“We are pleased to see the final pieces needed to deliver liquid natural gas (LNG) investment into B.C. – providing investment back into all of our cities,” said Anita Huberman, CEO, Surrey Board of Trade.
This legislation brings together the final fiscal elements of the policy framework for natural gas development set out a year ago. Government has already provided a PST performance payment agreement and provided industrial electricity rates on par with other industrial users in B.C.
When passed, this legislation will:
amend the Income Tax Act to implement a natural gas tax credit for LNG development in British Columbia;
repeal the Liquefied Natural Gas Income Tax Act that created barriers for investment in B.C.’s natural gas sector; and
repeal the Liquefied Natural Gas Project Agreements Act that left British Columbians vulnerable to footing the bill for special industry tax and regulatory protections.
Economic benefits of the LNG Canada final investment decision also include:
$24 billion of direct private-sector investments in B.C.;
$23 billion in new government revenues over the life of the project, creating new resources for health care, schools, child care and services for British Columbians; and
significant funding for First Nations capacity building, training and education, contracting and employment, and community contributions.
These steps will deliver the fiscal setting needed for LNG Canada’s proposed $40-billion project in northern British Columbia — the largest private-sector investment in B.C.’s history. It is expected to create 10,000 construction jobs and up to 950 permanent jobs in the Kitimat processing terminal. Additionally, this project is also on track to be the cleanest of its kind in the world, meaning it will fit within greenhouse gas (GHG) reduction targets of government’s CleanBC climate action plan.
“Until such a time as there is an affordable and readily accessible, non-carbon-based energy source, we will continue to need oil and gas to fuel our economy.”
The LNG Canada project is expected to trigger a $40 billion investment and bring in an estimated $22 billion over the next 40 years.
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MORE INFORMATION: https://news.gov.bc.ca/releases/2019FIN0035-000478