British Columbia’s Lt Gov Judith Guichon delivered a rather remarkable Speech from the Throne this afternoon in Victoria. After failing to meet for than eight months, the government of B.C. Liberal Christy Clark convened this afternoon for what will be a very short session ahead of a May 14 provincial election.
It was remarkable because, within only a handful of sitting days ahead of it, this speech from the throne could not do what most speeches from the throne do, namely lay out what kind of legislation the government will present to the legislature. Instead it was largely aspirational, looking ahead to a future in B.C. when natural gas has done for that province what oil has done for Alberta.
Some excerpts from the SFTT:
In B.C., we are blessed with an abundance of natural gas, the cleanest non-renewable fuel on the planet. We have a surplus that can meet the real and pressing needs of other economies, especially those on our Pacific doorstep. In doing so, we can help protect our planet.
Seizing this opportunity requires that we add new value to this resource, converting it for transport to markets outside our continent for the first time.
This can trigger a possible $1 trillion in cumulative GDP benefit to our province over the next 30 years.
An estimated 39,000 new full time jobs, on average, will be created during a 9 year construction period. Once all facilities reach full production, there could be over 75,000 new annual full time jobs.
…
For our province, two new major revenue streams can be created.
The first comes from revenues generated from the growth in employment and business activity – new revenues in a growing economy that will greatly enhance government’s ability to provide services families depend upon, year after year.
The second stream of revenue comes from new royalty revenues directly for the province – British Columbia’s share of resource profits. This could exceed one hundred billion dollars over the next 30 years….
One year ago, your government released a natural gas strategy to drive growth and investment.
Today, the measure of confidence in British Columbia’s strategy is clear. Since last year, over $6 billion dollars in investments have been made for the development of Liquefied Natural Gas for export.
It is estimated that up to $1 billion has already been spent in preparation for constructing Liquefied Natural Gas facilities and transportation networks.
Your government has set a target of having three liquefied natural gas facilities operational by 2020. Today, work is underway by ten partnerships to establish liquefied natural gas facilities in our province.
The throne speech would also hint that these natural gas riches — $100 billion over the next 30 years! — could one day mean that B.C. would no longer need to have a sales tax! Just like Alberta!
One wag on Twitter noted:
So, @christyclarkbc #thronespeech today was mostly gas? ow.ly/hF0Vw #bcpoli
— Bharat (@oliveridley) February 12, 2013
Indeed it was.
So how did the B.C. government arrive at all these numbers? Helpfully, the B.C. government thought you might ask that and provided the following information:
Bringing B.C.’s LNG tax regime into line with other jurisdictions
The ministries of Finance and Energy, Mines and Natural Gas have reviewed the tax and royalty regimes of key jurisdictions with the capability to support LNG production. This review has concluded that B.C.’s main competitor is Australia, which has an LNG tax and royalty regime that is up to one-third higher than B.C.’s. By introducing an additional tax applicable to LNG in B.C., we can maximize the benefits to British Columbians while still remaining competitive.
The impact of a new LNG tax regime
Based on assumptions and a study undertaken by independent consultants, if British Columbia adopts a new LNG tax regime, five LNG plants (two larger- and three smaller-sized) could potentially produce between $130 billion and $260 billion in revenues to the Province over 30 years.
What the numbers include
These estimates include direct taxes paid by the LNG facilities and the royalties received by the provincial government from natural gas extraction needed to support those facilities. They also include additional revenues through personal income taxes from new jobs the industry creates. These estimates do not include additional potential revenues from other increased B.C. economic activity generated as a result of the LNG opportunity.
How the numbers were arrived at
Estimates are based on analysis done by independent consultants using sector information collected by the provincial government, as well as the consultants’ own independent assumptions. An independent report providing further details on the forecast of potential LNG revenues will be provided commensurate with the release of Budget 2013.
Voters in B.C. will have their chance to render a verdict on these numbers (and many others) in precisely 13 weeks.