In Question Period, I asked the Minister of Finance about a recent order in council that had been published, with new details about a financing agreement between government and LNG Canada. I asked what percent of the carbon tax above $30 a tonne LNG Canada will get back through the CleanBC industrial incentive program when it starts operating in its first eligible year? The Minister of Environment stood to provide an answer – eventually confirming at the end of his second response that the amount of carbon tax, above $30/tonne, that LNG Canada will receive back is 100%.
The carbon tax is an economic tool used to reduce carbon emissions by putting a price on pollution that has in high social and environmental costs – impacts that would otherwise go unaccounted for by the company (and left to the tax payers to pay for it). To incentivize continued progress and reflect the true cost of carbon pollution it is designed to steadily rise in value, by $5 every year.
Exempting fossil fuel companies from this price signal undermines its very purpose and amounts to an additional fossil fuel subsidy, as my colleagues and I have been raising for years.
As reported by the Narwhal in March 2018:
‘At a press conference, Weaver said “there is profound concern” that LNG plants would be exempt from further increases in B.C.’s carbon tax… Weaver said measures like the carbon tax, which are designed to help B.C. meet its climate targets, are undermined by proposals that exempt industry from planned increases to the tax.’
It is still shocking to me that the NDP have given such major tax reprieves, major tax exemptions and even cheaper electricity rates to some of the largest and most profitable multinationals in the world.
At least $5.35 billion in direct financial incentives was given to LNG Canada – PST exemption for 5 years, plus a natural gas credit which in effect creates a 3% corporate income tax cut, plus an actual corporate income tax act exemption to kick in when LNG production begins, plus steel tariff exemptions – the list goes on.
Just this week the International Institute for Sustainable Development highlighted that for the 2017-18 year more than $830 million was given in subsidies for this one project.
The CleanBC Industrial Incentive Program was intended to provide escalating payments to companies to act as incentives in promoting innovation and the development of lower carbon intensity. And yet LNG Canada is starting at the maximum payment, with no incentive to change anything.
If the Minister had answered the first question in his first answer I would have been able to ask my second: How is the payments to LNG Canada under the CIIP program not simply another subsidy to this fossil fuel company, and how long is BC locked into paying it?
S. Furstenau: Over the last decade, the royalties coming in from natural gas have fallen considerably. Last year the total value was $102 million compared to a decade earlier, when it reached $1.3 billion. But at the same time, far more gas was produced.
Part of this decline, of course, has been due to the declining market prices for gas. But part of it is also the infamous deep-well credit program. My colleagues and I have raised the issue of the deep-well credit several times in this House. It is an outdated fossil fuel subsidy currently sitting at well over $2.6 billion in credits, and just this year companies claimed $631 million in deep-well credits, revenues that did not come to the province for a natural resource that belongs to the Crown.
Added to this is the bouquet of over $5 billion in government subsidies, once you add it all up, that have been given to LNG Canada, a single plant that is soon to become B.C.’s largest carbon polluter. Meanwhile the rest of B.C. has been told to tighten its belt.
A couple weeks ago order-in-council 580, 2019, was signed and released, which clarifies some of the details about how the CleanBC industrial incentive program will operate, particularly in relation to the fiscal framework for LNG Canada.
My question is to the Minister of Finance. What percent of the carbon tax above $30 a tonne will LNG Canada get back through the CleanBC industrial incentive program when it starts operating in its first eligible year?
Hon. G. Heyman: Thank you to the member for the question. The member’s question is situated in the context of climate action and greenhouse gas emissions, and I want to take this opportunity to talk about the program that we introduced just under a year ago to reduce emissions in British Columbia significantly in all sectors.
It’s called CleanBC. The members of the Green caucus and the Leader of the Third Party worked with us on developing a plan to reduce emissions across all sectors. We have implemented that plan, and we continue to implement that plan. We understand that it will take a number of steps and a number of stages to reach our target. But we’re committed to reaching that target, and we introduced accountability legislation and passed that accountability legislation in this session in order to ensure British Columbians can hold us accountable for what we do.
We have had success. The Minister of Municipal Affairs and Housing is building zero-energy, efficient buildings throughout the province. Perhaps more importantly…
Mr. Speaker: Members.
Hon. G. Heyman: …The Minister of Municipal Affairs and Housing is investing significantly in retrofitting social housing for those who can least afford high energy bills to live in comfort with lower bills and greater affordability.
We have a number of measures in transportation and industry, and I’ll be happy to talk about them at greater length. But the member knows: we have a plan. We’re on track. We have accountability, and we have the best and most energy-efficient carbon reduction program in North America.
S. Furstenau: I’m not sure what to say to the minister that I didn’t ask the question for answering a question I didn’t ask. But I’ll try again.
I’m just going to try again to ask the Finance Minister a question. In light of the Climate Accountability Act and the transparency and accountability that this government has made a commitment to, I think that it is important that the public knows very clearly how much the oil and gas industry is getting in subsidies from this government.
In light of the Climate Accountability Act and the transparency and accountability that this government has made a commitment to, I think that it is important that the public knows very clearly how much the oil and gas industry is getting in subsidies from this government.
I’m going to ask the Minister of Finance again the same question. What percent of the carbon tax above $30 a tonne will LNG Canada get back through the CleanBC industrial incentive program when it starts operating in its first eligible year?
Mr. Speaker: Members.
Hon. G. Heyman: To the member opposite, that’s exactly what the CleanBC program is intended to do: clean the air across B.C. and across the planet.
I gave the context of the overall emissions reduction strategy in CleanBC because it’s very important as part of an answer that we understand reducing emissions across all sectors, including industry. The program to which the member refers is called the CleanBC program for industry. It is scheduled through a combination of rebates based on highest-performing, across-the-globe industries with respect to carbon intensity to get money back so that they can continue doing the best in emission reduction strategies.
This program coupled with technological incentives will reduce 2.5 million tonnes of carbon dioxide equivalent by the year 2030, in addition to all of the other measures that are being taken.
I know that the members of the Third Party disagree with this approach, but it is critically important.
If the members opposite…
Mr. Speaker: Members.
Hon. G. Heyman: …would just give me a second or two, I will give them the answer they’re seeking.
It is critically important that we keep the economy moving in British Columbia, while lowering emissions, that we keep people employed in British Columbia while we work together with industry to lower emissions. That’s exactly what we’re doing.
LNG Canada is eligible for exactly the same framework as all of the rest of industry in British Columbia. The rebate they will get for the additional $20 a tonne by the coming years….
Hon. G. Heyman: Listen carefully, members opposite. Listen carefully. This is what you’re waiting for.
They will be eligible because they are matching the highest-performing carbon intensity in the globe for 100 percent of the carbon tax above $30 a tonne. And if they meet that standard on review in five years, they’ll continue.
Mr. Speaker: Minister.
Hon. G. Heyman: And if they don’t, they won’t.