Legal proceedings Woodfibre LNG commenced against the District of Squamish in 2025 and 2026 would be dismissed by consent if council approves a proposed 10-year financial arrangement with the company.
According to a District of Squamish staff report, the proceedings relate to taxation in 2025 and 2026 “and other matters.”
The arrangement, outlined in a staff report to be presented to council on Sept. 22, combines a municipal property tax exemption with fixed annual payments from WLNG. Together, the two components are expected to provide the District with at least $142 million over 10 years, beginning in 2027.
If council rejects the arrangement, the District says it will defend the existing legal proceedings in court. Staff emphasize that the agreement was not initiated in response to the litigation. Discussions between the District and WLNG began in 2015, while negotiations “commenced in earnest in December 2025” following leadership changes at the company.
“The proposed arrangement is a result of negotiations that were initiated long before commencement of the current lawsuits,” the report states, adding that resolving the litigation would be a “byproduct” of the agreement.
Two parts of proposed agreement
The arrangement consists of a Revitalization Tax Exemption bylaw and a Community Enhancement Payments Agreement. Both must be approved for the arrangement to proceed.
Under the payments agreement, WLNG would contribute $117 million to the District over 10 years. The company would pay $10 million in 2027, $16 million annually from 2028 through 2030, $15 million in 2031, $10 million annually in 2032 and 2033, and $8 million annually from 2034 through 2036.
The payments would be fixed and would not increase with inflation. Although described as voluntary contributions rather than taxes, they would be legally enforceable under the contract.
Money received through the payments agreement would be deposited into a reserve and could be used only for capital projects selected by council through the District’s financial-planning process. It could not be used to pay for regular municipal operations.
The report identifies water, wastewater and stormwater repairs, flood protection, recreation facilities, transportation improvements and climate adaptation as major drivers of the District’s recent capital plans. The money could be directed toward any of those expenditures.
Municipal tax set at $2.5 million
The proposed tax-exemption bylaw would set WLNG’s municipal property tax at $2.5 million in 2027, with annual Consumer Price Index adjustments beginning in 2028.
That would provide the District with at least $25 million in municipal property taxes over the agreement’s term, plus the inflation adjustments.
The exemption would apply only to taxes the District collects for municipal purposes. School taxes, regional district levies and other property-related charges would continue to be collected separately. Combined with the $117 million in community enhancement payments, the municipal tax component would provide at least $142 million over 10 years, according to staff.
The proposed documents “can either be accepted or not accepted but cannot be unilaterally amended by the District at this point,” the report states.
No guarantee deal will produce more revenue: DOS
Staff are not claiming the arrangement would necessarily generate more money than conventional property taxation.
Depending on future assessments and council-approved tax rates, the report says, revenue under the regular taxation system “could be either higher or lower” than the amount provided through the agreement.
The facility is still under construction and has not been fully assessed, making its future taxable value difficult to predict. Revenue would also depend on construction timelines, assessment changes and tax rates set by future councils. The principal benefit of the proposed arrangement, according to staff, is that the revenue would be committed in advance and predictable. It would also reduce the District’s exposure to assessment appeals, tax disputes, litigation and regulatory changes.
The risks are the reverse: The District could forgo revenue if future assessments and tax rates would have produced more than the agreement, and it would be locked into the arrangement for 10 years.
Remaining under the regular taxation system would allow council to set the major-industry tax rate annually, but the report warns that doing so would carry the “cost and uncertainty of existing and potential future litigation with WLNG over municipal tax rates.”
WLNG is currently Squamish’s only Class 4 major-industry property. However, the report notes council’s ability to raise additional revenue from the company through that tax class could become limited if other properties are classified as major industry in the future.
Default and property-sale provisions
If WLNG misses a required payment and fails to correct the default within 30 days, it would lose its tax exemption. The District could also take legal action to collect the outstanding amount.
If the property is sold, the exemption could continue as long as the site remains in use as an LNG plant and the new owner meets all conditions of the two agreements, including making the required payments.
Any portion of the land transferred to another owner and no longer used for LNG operations would be removed from the arrangement and taxed normally. The annual enhancement payments and the municipal tax payable on the remaining WLNG property would not be reduced.
The agreement would not give WLNG naming rights or sponsorship status, although the District could acknowledge that individual projects were partly funded with money received from the company.
There is no automatic renewal provision. The report says the arrangement would not restrict the discretion of the council in office when the agreement expires.
Provision intended to prevent duplicate payments
The report says Article 6 of the payments agreement is intended to prevent WLNG from making duplicate payments to the District.
If future municipal taxes exceed the applicable agreed annual amount, the District would be required to repay an equivalent portion of the community enhancement payments. Any repayment would be limited to the amount received through the payments agreement or property taxes, ensuring the District would not repay more than it collected from WLNG in that year.
Staff also recommend placing an amount equivalent to the general tax revenue received from a single large business in reserves and using it for one-time or temporary expenditures. The policy is intended to prevent the District from becoming dependent on one large taxpayer to finance continuing municipal operations.
Council is being asked to give the Revitalization Tax Exemption Bylaw its first three readings and refer the Community Enhancement Payments Agreement to a future meeting.
If the bylaw receives three readings, it would return for adoption, and the payments agreement would return for council endorsement at the Oct. 6 regular business meeting. Council may instead decline the entire proposed arrangement.
