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When the gruel is this thin, fantasy looks like a good alternative

Vaughn Palmer, Vancouver Sun, February 12, 2013

VICTORIA — Bereft of revenues, political momentum and much in the way of new ideas, the B.C. Liberals Tuesday staked the last throne speech of their current term on wild speculation about a single sector of the economy.

In the throne speech read by Lt.-Gov. Judith Guichon on Tuesday, the B.C. Liberals said revenues from liquefied natural gas revenues will be channelled into a $100-billion B.C. Prosperity Fund. (Photograph by: DARRYL DYCK , THE CANADIAN PRESS)

Item: “The economic impact of five new liquefied natural gas plants will be significant. Projected total revenues to government are estimated between $130 billion and $260 billion over the next 30 years. In order to maximize the benefits to future generations, the provincial government is establishing a new B.C. Prosperity Fund.”

Fund to begin accumulating in 2017, just in time for the next election in the four-year provincial cycle. Benefits determined by calculations from two independent reports, neither of which was made public.

Item: “LNG development is poised to trigger approximately $1 trillion in cumulative GDP within B.C. over the next 30 years and that means more than $100 billion will flow directly to the prosperity fund.”

How do the Liberals plan to generate this astonishing windfall? By hiking taxes on the industry they hope to create.

Item: “By introducing an additional tax applicable to LNG in B.C., we can maximize the benefits to British Columbians while still remaining competitive.”

Competitive with whom? Australia, mainly. And according to a review conducted by the Liberals, which they’ve also not released, B.C. has plenty of room to move on the tax front vis-à-vis Down Under.

Item: “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.”

This at a time when industry has been lobbying Ottawa for $2 billion in relief from federal taxes to jump-start the development of LNG facilities here in B.C.

Do the Liberals seriously expect Ottawa to reduce its tax room on natural gas while Victoria is publicly scheming to increase its levies on the same product?

Apparently so, for I gather that the natural gas sector has been told to brace itself for the likelihood of a made-in-B.C. “arbitrage tax” on LNG, levied on the difference in unit prices between here and Australia.

One can readily imagine what the Liberals would be saying were the New Democrats proposing to raise the provincial levy on natural gas by as much as a third.

But when Premier Christy Clark was asked about her intentions on the tax front, she huffed that she wasn’t about to “conduct negotiations through the news media.”

As opposed to doing it by press release, it would seem.

Besides, the premier and her ministers hope the public will be caught up in the speculation about all the wonderful things that could be done with that hypothetical $100-billion prosperity fund.

Item: “A main focus of the B.C. Prosperity Fund will be to reduce the provincial debt ... eliminating the provincial sales tax or making long-term investments in areas like education or vital infrastructure.”

Eliminate the provincial debt! Wipe out the sales tax! Why not use the money to cure cancer, build a fixed link to Vancouver Island or colonize Mars?

By this point in the day’s overheated narrative, one needed reminding that to date the province has precisely zero LNG plants, nor have any of the major global players with an interest in B.C. (Shell, Chevron, etc.) green-lighted the construction of one.

Plus there’s the matter of negotiations with the province and BC Hydro to provide the necessary gobs of power for LNG terminals, which terms aren’t expected to be finalized until after the election.

Still, one could readily grasp the Liberal predicament as they sat down to craft their legislative agenda. The remainder of the throne speech was the thinnest gruel imaginable, recycled promises from past years, new promises so negligible as to be pathetic.

Item: “Your government will begin the work to create the environment for a school of traditional Chinese medicine at a B.C. post-secondary institution.”

Begin work, mind you. To create the environment for a school of traditional medicine. At a post-secondary institution to be named later. Who says this government has run out of ideas?

Seriously, judging from the contents of the throne speech, the tank has run dry for the Liberals. So perhaps it is not all that surprising that Clark and her colleagues decided to escape into the throne speech equivalent of virtual reality.

“Listen up, voters. We’re going to build a bunch of LNG terminals, create umpteen jobs, raise a zillion dollars, eliminate the sales tax, wipe out the provincial debt and we can all live happily ever after.”

And you thought they’d put Fantasy Gardens into mothballs after Bill Vander Zalm left office.

© Copyright (c) The Vancouver Sun


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