REPORTING · 8th March 2014
Mayor Joanne Monaghan turned over the meeting to Acting Mayor Phil Germuth on Monday, March 3rd so she could make a pair of motions. The first motion was to write a letter to the Minister of Natural Gas Development Outlining the District of Kitimat’s concern regarding the LNG Tax Policy as it does not put into jeopardy any of the proposed projects for Kitimat.
“The Industry requires a clear, stable and competitive fiscal framework as companies work towards a final investment decision. Until they have that framework with tax, they are not going to be able to make that investment decision. The LNG Tax is an important component of fiscal Framework. Getting the details right in this policy is important and we need to be assured that all aspects of the Provincial Revenue are being taken into account such as the upstream revenues,” said Monaghan.
She stated Provincial tax structure, resource royalties, carbon policies, environmental regulations and the costs of building and operating a pipeline, facilities and developing resources. She wanted assurances for the District of Kitimat that all aspects of Provincial Revenues from the LNG are taken into account to keep the projects competitive so BC will see an LNG Industry.
Monaghan explained the first one over the finish line wins and if BC does not get over the line, it will not win.
Councillor Corinne Scott needed clarification. Monaghan said the Province has not dealt with taxation and the industries she has talked to have said it is pretty rich, 7%. She wanted it said in the way they would look at it.
CAO Ron Poole stated the government has announced a two tier system with 1.5% at the low end and 7% at the high end. Shell and Chevron have said 7% is not on the table and they are concerned this is still on the table.
Councillor Mario Feldhoff said they need to word the letter carefully because the Liberal Government is in favour of the LNG industry and he does not want the Council to be used as a bargaining chip between industry and Government. He said it was important to let the government know of the importance of the industry to Kitimat’s Future.
Germuth stated Minister of Natural Development, Rich Coleman was talking about placing a cap on Municipal Taxes on LNG which would have a huge effect on Kitimat. He thought there might be an appetite for this, but Monaghan wanted this as a separate motion, because she wanted to be delicate.
Monaghan told Council that Coleman assured her on his last visit to Kitimat that the tax structure on LNG would be put into place in November 2013, then it did not happen and Coleman told her it was going to be in this legislative session. Now, it’s been put off until the fall.
“The industries that are coming in here, that we’ve spoken to, I’ve spoken to them, the CAO has spoken to them, and they are saying: ‘but we have to know this. We have to figure it in to our final decision because the board has to know and they aren’t going to give the final investment decision until they know this,” said Monaghan.
She suggested they be ‘firmly delicate.’
Feldhoff stated, to be fair to the Province, they have given a framework but all the details are not worked out yet. He hoped they would not leave it too late. They hoped it would have been done a while ago.
The motion was carried unanimously.