B.C. Government announces LNG funding

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The Government of British Columbia announced on February 18, 2014 their Balanced Budget 2014, which includes forecast surpluses in all three years of the financial plan and modest investments in priority areas, including LNG development. 

Funding includes, among other areas, $29 million over three years to support the development of an LNG industry in B.C., including attracting investments to B.C. and supporting a stable environment for investment decisions, facilitating timely processing for regulatory and permitting requirements, and ensuring ongoing environmental protection, management and stewardship.

The province also continues to develop and implement all the elements of a competitive tax and policy environment to assist with LNG development in B.C.  To this end, the government intends to introduce income tax legislation later this year applicable to the LNG industry.  The LNG Income Tax will be a two-tier with a tier-one tax rate of 1.5 per cent and a tier-two rate of up to seven per cent, with the final rates to be determined and confided in legislation.  The LNG Income Tax will apply to income from liquefaction of natal gas at LNG facilities in British Columbia.

The B.C. LNG income tax structure and rates are subject to approval of the legislature.  Government intends to have legislation ready for introduction by fall 2014, once the complex drafting process is complete.  Regulations and additional legislation will follow in 2015.

“Our LNG income tax revenue framework strikes the right balance between the need to maximize the return to British Columbians, while also ensuring B.C. 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,” said Finance Minister Michael de Jong.

B.C. is forecast to end the fiscal year 2013-14 with a surplus of $175 million, with progressively larger surpluses forecast in all three years of the fiscal plan:

  • $184 million in 2014-15.
  • $206 million in 2015-16.
  • $451 million in 2016-17.

While the fiscal plan shows continued spending discipline, modest surpluses allow government to make choices and ensure new spending is put into priority areas. Within the balanced budget, government is providing additional funding of $415 million to benefit B.C. families, help make life more affordable, and help stimulate economic growth and job creation.

Click here for more information on the Balanced Budget 2014.

 

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