The following first published July 21, 2014:
Does it surprise you to learn that British Columbia earned a net of only $61 million in gas royalties in the last two fiscal years?
Revenue statements report $534 M in royalties from April 1, 2012 to March 31, 2014 but in footnotes to the province’s audited financial statements, we learn that credits owed gas producers grew in the two fiscal years by $476 M, to a total of $1,250 M. BC Liberals choose not to record this liability although it will reduce future royalty payments. This is but one example of accounting flimflammery that distorts the province’s true financial state. It also indicates that expectations of riches to come from massive public investments in LNG plants are sheer fantasy.
Last March, the government MLA for one of Canada’s wealthiest municipalities rose in the Legislature to speak about natural gas. Jason Sturdy said:
…our government’s deep-well royalty credit and infrastructure royalty credit program will also help to increase the competitiveness of our province’s natural gas sector and support the long-term prospects of the industry.
The credit programs Sturdy describes are tax expenditures, which are described by a business dictionary as:
Revenue a government foregoes through the provisions of tax laws that allow (1) deductions, exclusions, or exemptions from the taxpayers’ taxable expenditure, income, or investment, (2) deferral of tax liability, or (3) preferential tax rates.
Politicians often use tax expenditures when they don’t want to draw attention to transfers of wealth from public to private hands. The BC Government’s objective is to reward natural gas producers billions of dollars while citizens — like disabled people in their seventh year of a benefits freeze — are told cupboards are bare. Liberals prefer little discussion or comment not processed by their spin machine. In this case, Robin Austin, opposition critic for natural gas development, did not provide the rest of the story. Instead, he stood after Mr. Sturdy and applauded the government’s gas strategy. That, I believe, is opposition that is too loyal.
I am prepared to wager that not one in twenty carbon tax paying British Columbians — perhaps including MLA Austin — know the amount taxpayers subsidize fossil fuel development. Since handout beneficiaries are among their funders, the Canadian Taxpayers Federation does not rate as important the billions in tax expenditures encouraging fossil fuels. Today, one of Jordan Bateman’s complaints is about $77.82 the Ministry of Finance spent at an online Disney store. Gas subsidies have not been on Bateman’s list of subjects fit for examination.
Search Google for BC natural gas subsidies and you will find the corporate press has almost no coverage. It is discussed at sites like this and by The Dogwood Initiative and the Common Sense Canadian. Otherwise, the subject is considered not something taxpayers need to know. God knows it is material, but that’s matters not to corporate media.
The following is extracted from documents published by the Ministry of Finance, including audited financial statements of British Columbia.