December 1st – BC Chamber Public Affairs Update

B.C. Lieutenant Governor Judith Guichon gave royal assent to Bill 2, the Greenhouse Gas Industrial Reporting and Control Act, and Bill 6, the Liquefied Natural Gas Income Tax Act, making them law.

Bill 2 establishes a greenhouse gas emissions intensity benchmark of 0.16 carbon dioxide equivalent tonnes per tonne of LNG produced. Environment Minister Mary Polak says that means B.C. will have the cleanest LNG facilities in the world. The bill passed despite opposition from the BC NDP and Greens. They say the bill is flawed because it only applies to LNG liquefaction facilities and not pipelines and drill sites.

Bill 6 establishes the tax regime for LNG, including a 3.5 per cent corporate income tax rate for LNG effective January 1, 2017, increasing to five per cent in 2037. The initial tax rate will be lower – 1.5 per cent creditable against the higher tax – while LNG companies’ initial capital investment is being deducted.

Finance Minister Mike de Jong says Bill 6 delivers the competitive tax environment and certainty B.C. needs to develop an LNG industry. The BC NDP criticized the B.C. Liberals for exaggerating LNG’s potential benefits to win votes in the last provincial election. They supported the bill, however, saying it’s what B.C. can realistically expect to get from LNG. Only BC Green MLA Andrew Weaver opposed the bill.

MLAs will return to Victoria early next year for the introduction of the 2015-2016 budget.

Lanzinger, the federation’s former secretary-treasurer, replaces Jim Sinclair, who is stepping down after 15 years. Lanzinger, the federation’s first woman president, beat challenger Amber Hockin from CUPE by a razor-thin 1,137-1,080 margin.

Finance Minister Mike de Jong says the projected year-end surplus is now $444 million. The government forecast a surplus of $184 million when the budget was first introduced back in February.

Increased housing starts and strong retail sales are to credit for the strong performance, de Jong said.

Bigger budget surpluses often bring calls for new spending. A recent report by the all-party B.C. Select Standing Committee on Finance and Government Services recommended looking at investments in public services like health care, education and social services, as well as infrastructure.

De Jong cautioned that the government remains committed to fiscal discipline and debt reduction. “Every family in B.C. understands it is legitimate to seek financing through difficult times, but you’ve got to pay it back,” he said.

This weekly report produced for the BC Chamber of Commerce by Fleishman-Hillard.  While every effort has been made to ensure the accuracy of the information included in this publication as of the date of issue, events and government policies are subject to frequent change.  Therefore, the BC Chamber of Commerce and Fleishman-Hillard cannot assume any responsibility for actions taken solely or principally on the basis on the information contained herein.