After the Campbell Liberals were elected in 2001, influences of special business interests grew rapidly. Under Christina Clark’s leadership, non-renewable resource companies wield great political power and they use it to minimize regulations and taxation and maximize subsidies.
In fiscal year 2016, mining companies and gas producers contribute a small fraction of the provincial budget. The current year’s gas rights sales and royalties are bringing in about ⅓ of 1% of the province’s cash income and, despite the government’s 2013 pre-election promises of fabulous gas wealth, there is little improvement in budget estimates to 2019. In 2001, the contribution was over 5%.
Petroleum, metal and mineral companies now pay less in resource rents than government spends regulating them, so it is fair to say that, through political contributions, the BC Liberal Party profits more from resources than do the province’s taxpayers. The largest source of BC’s natural resource revenue is now water rental and most of that is paid to generate hydro electricity and is charged back to us in utility bills.
This graph shows that while income, sales and provincial property taxation nearly doubled under the Liberals, natural resource revenues declined by half:
Some people assume the difference can be explained by production volumes and prices but that is incorrect. Below is a 15-year look at natural gas royalties and production volumes. Buried in earlier In-Sights articles are comparisons of metal and mineral production levels that show similar trends:
The situation is even worse than shown above because, when producers spend money on drilling or road building, they gain rebates to be applied against future royalty payments. Those outstanding credits are not recorded by government and the liability increased about $800 million in Clark’s first four years. In other words, the apparent royalty revenue is actually half of what is shown. (The current year change in accrued credits owed producers will not be revealed until the Auditor General reports in mid-summer.)
It is fairly clear the present government, particularly under Clark, prefers to reward the natural resource companies that have provided, according to Elections BC, contributions of more than $16 millions dollars to the BC Liberal Party.