VICTORIA — The stage has been set for the development of a liquefied natural gas industry by British Columbia's Liberal government, even though the first of what it says are 18 potential deals has yet to come to fruition.
With the legislative session due to conclude Thursday, Liberal House Leader Mike de Jong said income tax and emissions-reporting legislation introduced this fall have laid the ground rules for oil-and-gas companies to develop the lucrative LNG industry in the province.
The government has said the industry will create up to 100,000 jobs and rival Alberta's oil sands in economic potential.
Industry officials reacted favourably to the 3.5 per cent income tax, as well as the emissions standards that Environment Minister Mary Polak said are the most stringent and will make B.C.'s industry the cleanest in the world.
"We have accomplished those things precisely in the way we hoped to," said de Jong.
"We were seeking to achieve a balance ... between securing a fair return for British Columbians as the owner of the resource and ensuring we had a competitive jurisdiction that would attract investors."
De Jong said he hopes some companies will make their decisions known in the coming weeks.
When he introduced the LNG income tax legislation last month, de Jong said that one mid-sized LNG plant would pay about $800 million in taxes annually, which is equivalent to the taxes B.C.'s forest industry pays in one year.
He said a plant that produces 12-million tonnes of LNG annually will pay between $8 billion and $9 billion in taxes over 10 years.
Yet, there's also been increasing competition and declining natural gas prices, and companies with huge plans for the northwest coast are still hedging on making final investment decisions.
On the opening day of the legislative session last month, Malaysian energy giant Petronas, which is planning a multibillion-dollar LNG export facility near Prince Rupert, B.C., said it may delay development for a decade unless it could reach cost and environmental agreements with provincial and federal governments.
Petronas president Shamsul Abbas said "tax and high cost environment will negatively impact the project's economic viability and competitiveness. In fact, in our last portfolio review exercise, the current project economics appeared marginal.''
Premier Christy Clark rejected suggestions her government was downplaying its LNG expectations, after the throne speech did not repeat past statements that the industry would create 100,000 new jobs and eliminate the provincial debt that's more than $60 billion.
For Opposition New Democrat Leader John Horgan, the legislative session was about more than LNG. He said it was dominated by a botched investigation that led to the firings of eight health researchers, the refusal of Advanced Education Minister Amrik Virk's to vacate his cabinet post despite his interference in a university hiring process, and the premier's poor attendance record in the legislature.
"But all we hear about is we're going to get 18 LNG facilities, and nobody believes that either," he said.
The researchers were fired two years ago after a probe investigated their relationship with employees of the B.C. Pharmacare program.
The government has since settled three wrongful dismissal lawsuits and reinstated two employees. Clark and Health Minister Terry Lake have also apologized to the family of Roderick MacIsaac, a student who committed suicide.
The government appointed Victoria labour lawyer Marcia McNeil to review the issue, but the top former government bureaucrat, Graham Whitmarsh, connected to the firings has refused to participate.
Horgan has called the review process a sham.
The NDP has repeatedly called on Virk to resign his cabinet seat or be dumped by Clark, after a report last summer found he was part of a volunteer board at Surrey's Kwantlen Polytechnic University that broke disclosure guidelines that involved topping up salaries to hire executives.
The New Democrats released new emails this session, indicating Virk, a former Mountie, used his RCMP account to offer board members hiring information.
De Jong announced a review of the emails, and asked bureaucrat Rob Mingay, who wrote the original report on Kwantlen's hiring practices, to examine the new emails and determine if they would change his earlier findings.
Horgan said Clark must improve her attendance record at the legislature after her flight to Victoria Wednesday was cancelled due to foggy weather.
"If she does show up Thursday, I will have to move to two hands to count the number of days she's been here since this session opened six weeks ago," he said. "It's not 'Gilligan's Island,' it's Vancouver Island. There are boats. There are other planes."
