The government of British Columbia has introduced Balanced Budget 2014, which includes forecast surpluses for the next three fiscal years as well as modest investments in priority areas, including the liquefied natural gas (LNG) industry.
Finance Minister Michael de Jong announced that BC is to end the fiscal year 2013-14 with a surplus of CAN$ 175 million, which is forecast to increase over the next three years of the fiscal plan:
- CAN$ 184 million in 2014-15
- CAN$ 206 million in 2015-16
- CAN$ 451 million in 2016-17
LNG is priority
The LNG industry has been marked as a priority area, so will receive additional funding. A total of CAN$ 29 million over three years will be provided to support the development of the industry in BC, including:
- Attracting investments to the province and supporting a stable environment for investment decisions;
- Facilitating timely processing for regulatory and permitting requirements;
- Ensuring ongoing environmental protection, management and stewardship.
New LNG taxes
BC will continue to develop and implement all the elements of a competitive tax and policy environment to assist with LNG development in the province. To this end, the government intends to introduce income tax legislation later in 2014 applicable to the LNG industry.
The LNG Income Tax will be a two-tier tax with a tier one tax rate of 1.5% and a tier two rate of up to 7%, with the final rates to be determined and confirmed in legislation. The tax will apply to income from liquefaction of natural gas at LNG facilities in British Columbia.
Commenting on the balanced budget, Finance Minister de Jong said: “BC has demonstrated that with hard work, due diligence and fiscal discipline, it is possible to achieve something that few other jurisdictions in Canada can claim to have today: a balanced budget. BC is now in the enviable position of having a balanced budget this year and in all three coming years of our fiscal plan.
“Our LNG income tax revenue framework strikes the right balance between the need to maximise the return to British Columbians, while also ensuring BC is an attractive and competitive place to develop LNG. The LNG revenue framework will deliver long-term benefits for British Columbia and provide industry with the certainty it requires to be successful.”
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/19022014/bc_budget_forecasts_investment_in_lng_industry_190/