Cost Outweigh LNG Tax Benefits

Mike Quesnel-MAINBy Michael Quesnel
Published: July 29, 2015


WE ALL have seen recent news headlines and government reactions: ‘Gas companies say BC LNG tax too high’.  ‘Ottawa grants tax breaks for LNG sector in BC’. ‘Oil & gas industry requesting massive tax cuts for LNG’. BC LNG income tax’s proposed rate cut in half’. ‘LNG industry is not viable at probable future market price.’ ‘BC Liberal government introduces legislation that slashes its proposed royalty rates for LNG.’
Future headlines?
“High municipal property taxes detrimental to LNG Industry’. ‘Provincial government places a cap on municipality’s property taxes for LNG operations to help industry maintain profitable operations’.  
Don’t be surprised if it happens. Woodfibre LNG has already low-balled us, and the government has shown how they respond.
We cannot consider only short-term fiscal rewards of operations in Squamish. We must look at all costs. Tax is tax; we all pay the bill. The volume of natural gas burned by the proposed LNG industry would be 2.5 times greater than the entire volume of metro Vancouver, or an 60 per cent more gas than is currently burned in all of BC annually.  These emissions cause health, ecological and climate change costs well beyond any tax revenue we would receive. Scientists have confirmed a compelling connection between climate change and the increasing fire and drought issues we are facing today.  For 2015 BC liberals allocated $63 million for their fire budget. The province has already spent over $97million, and the fire season has barely started.  Time and again, industry has left its mess behind for the public to provide the clean-up on our tax dollars. Britannia Beach mining operation created one of North America’s most polluted waterways and has cost us over $100 million to clean up. It’s only recently that Howe Sound has begun to recover. Squamish had to borrow close to $3.5 million + interest to remediate the SODC lands from Nexen Chemical plant. With global sea levels rising, diking of Squamish oceanfront lands and rivers will theoretically cost tens of millions of dollars. 
True costs are unknown, but we do know the continued use and expansion of burning carbon fuels will only aggravate the problems. If WLNG gets started in our community what will be the economic fallout when individuals and businesses choose not to stay downwind locked in the valley with air pollution and migrate? What happens to Squamish’s profile as a recreational haven and providing healthy quality of life? We just don’t know the costs as the socio-economic impacts are not clear.
At a recent Chamber meeting held and sponsored by WLNG, Fort St. John Mayor Lori Ackerman spoke about what she called, “the Unfair share agreement”. Even in Fort St. John, the benefits of the resource industry do not meet her community’s needs. The reality is, the resource industry has some heavy costs to pay along with its claimed benefits. Doug Race, one of the proponents of LNG and a Squamish Councilor, has been very explicit that LNG taxes would not be used to lower housing property taxes; LNG taxes would be used for topping up underfunded reserves. So LNG is not going to lower your taxes! Rich Coleman, BC Minister of Energy, has cautioned municipalities that the province might cap industrial tax rates on LNG operations and has encouraged municipalities to negotiate with these proponents.
Globally, $550 billion a year are used to subsidize the oil and gas industry.  It is time we invested these subsidies into cleaner forms of energy. The shift is already taking place with renewable energy sources now providing 28 per cent of the global demand. The growth of oil & gas industry is a losing battle, and its costs truly outweigh tax benefits.