LNG Taxes: Far from a Drop in the Bucket

evanBy Evan Drygas 
Published: July 29, 2015



IT’S NOT clear exactly how much Woodfibre LNG will pay in taxes but we do know that the taxes the company will generate will be significant. First, the company has offered to pay at least $2 million per year in municipal property taxes which is about what the Western Forest Products paid when the pulp mill was in operation. However, that number could be near $7 million per year, according to a preliminary BC Assessment presentation.

To put Woodfibre LNG’s potential property tax into perspective if the company paid $2 million per year in property taxes they would represent nearly 9% of the district’s total property tax revenue based upon 2014 figures. If Woodfibre LNG paid $7 million per year in property taxes per year the company would represent nearly 32% of the district’s total property tax revenue based upon 2014 figures The property taxes that Woodfibre LNG would pay would be worth between $210 and $700 of the average homeowners tax bill. This based upon the  assessed house value of $467,120. It’s also important to remember that the Woodfibre site does not require municipal services resulting in additional tax revenue with zero additional cost. This is unlike new residential development which brings in new property tax revenue but also requires municipal services such as water, sewer, and road maintenance. Woodfibre LNG would also generate a sizable indirect municipal tax contribution.
What the district does with the tax revenue generated by Woodfibre LNG is ultimately up to elected officials but the benefits will be passed onto taxpayers in one way or another. The tax revenue could flow back to taxpayers through a tax cut, reduction in future tax hikes, or new amenities such as a needed second sheet of ice at Brennan Park.
Regardless of the exact amount of municipal taxes that Woodfibre LNG will generate or how the district will distribute the funds it is clear these taxes will benefit families, especially those in need. This tax revenue would not only benefit homeowners, but it will benefit all district residents. The additional municipal tax revenue generated by Woodfibre LNG could slow rent increases by helping reduce landlord expenses or benefit local organizations that rely on grants from the district. If homeowners see a lower property tax burden they will also have more disposable income that will by and large put back into the local economy. Small businesses could benefit from lower property taxes and inject more money in the local economy. Municipal taxes represent only one small part of the total taxes that Woodfibre LNG would generate. The company would generate about $35 million in provincial taxes and about $42 million in federal taxes, during the construction phase alone.
The taxes generated by the project sharply increase during operation. Standard economic models indicate that the company could generate $92 million in provincial taxes and over $96 million in federal taxes, each and every year. These federal and provincial taxes are comprised of various taxes like G.S.T., P.S.T. income taxes, LNG export taxes, and carbon taxes. The exact amount is hard to peg at this point, as changes in tax rates would affect the totals, but there is absolutely no doubt that both the Federal and Provincial governments, and therefore BC and Canadian taxpayers, will benefit to the tune of tens of millions of dollars every year. Theses provincial and federal taxes go towards paying for important services like healthcare, education, and public transport. This is tax revenue that will benefit not only Squamish residents but British Columbians and Canadians in general. Squamish has been fortunate to benefit from large provincial infrastructure projects such as the Sea-to-Sky Highway Improvement Project that was paid for largely by the province. The taxes generated by Woodfibre LNG only represent one small piece of the economic impact generated by the project. The project will also have a large local payroll and create spin-off employment throughout the province.
It’s also important to remember that while the economic impact of Woodfibre LNG is important, it is only one of the many benefits of the project. The positive contribution to the global environment by providing a cleaner alternative to coal and the jobs generated by Woodfibre LNG are arguably just as important.


  1. Glenne Campbell says:

    Nice pitch article for WLNG. However – the author may want to head to Alberta to learn about the reality in the arena of petroleum politics, investments and taxes. Petroleum companies have huge departments which work hard at pushing numbers on pages around so that they will avoid taxes. Then the next department takes those numbers and publish them in investor presentations complete with bragging rights as to when they expect to pay taxes. ( its generally five years into the future) Of course, each year, new numbers are presented to the public, the investors, the governments and so are new dates of tax payment expectations. This local idea of projected tax payouts is naive and written without any background knowledge as to what the industry is all about. One only has to follow the news from professional journalists who are following BC politics.

  2. Chris Pettingill says:

    Evan, you might want to watch the BC Assessment presentation to Squamish council from a couple of months ago. It should still be available on the District’s website. Instead of that (or in addition) I’m happy to meet with you for coffee to clarify the actual tax implications of WLNG in Squamish.

    If you watch the BC Assessment presentation, you’ll see that both council and staff quite emphatically said that any WLNG tax revenue would not be used for new services or to reduce taxation. Instead it would be used to more adequately fund reserves and other such things. Surely, there is a benefit to properly funded reserves, but it’s not something the average tax payer will see directly.

    But for the sake of argument, what if council put all of the WLNG tax “offer” revenue towards directly lowering taxes? The reality is it WOULDN’T LOWER taxes. In the best case, we would only avoid tax increases for two years, and then be right back to the same old increases. Is avoiding only two years of tax INCREASES worth the economic and environmental risk and harm of WLNG, not to mention poor District financial management?

    You’re correct that the WLNG “offer” would amount to 9% of 2014’s tax revenue. But if you’re going to compare the value of this to when the pulp mill was running, you need to remember that in 2005, $2 million was 16% of tax revenue – a 78% larger portion of revenue! The impact of $2 million today is much smaller than when the mill was running – and each year, that $2 million means less and less. If you wanted to avoid tax increases forever, you’d need to add a brand new additional WLNG (or equivalent payer) every two years.

    I was surprised to learn from BC Assessment that WLNG’s $2 million “offer” was a fraction of what WLNG must pay under Squamish’s applicable industrial taxation (which is less than the BC average, and way less than the standard rate in the LNG-hotbed of Prince Rupert). It’s true that under the standard applicable industrial rates, the amount WLNG would pay each year would DECREASE. Even so, they’d still they’d owe much more than they have offered if we just tax them under regular applicable rates than any other business would have to pay. Why does WLNG think they deserve to pay so much less than any other industry in Squamish?

    By itself, $2 million sounds like a big number. But when you put into context of what every other industry pays, or what it means in terms of today’s budgets instead of budgets from a decade ago, or look at it in terms of prudent municipal financial management, it’s a surprisingly small amount of money.

  3. Mike Holmes says:

    Tax revenue is the only argument he has, it’s the same rhetoric he spews on the Yes to WLNG Facebook page. It’s completely innaccurate and overstated, as per the comments above. And even if it were true, isn’t it a bit short sighted!? There are some things we love about living here (and on this planet) that a few million in tax dollars simply can’t cover. My question: who’s paying Evan Drygas for this BS?