Before BC’s last provincial election, the governing party was trailing in the polls, still suffering from the HST fiasco, their failed effort to shift sales tax burdens from businesses to individuals. Premier Clark’s handlers decided to weave her a new set of clothes.
When first shown to the public, oblivious cheerleaders in corporate media rose in unison to applaud. Like the child in Hans Christian Andersen’s story, alternative media revealed the truth.
February 13, 2013, three months before her first general election as Premier, Christy Clark announced:
…the new British Columbia Prosperity Fund to ensure communities, First Nations and all British Columbians benefit from the development of a new liquefied natural gas (LNG) industry…
LNG development is poised to trigger approximately $1 trillion in cumulative GDP within British Columbia over the next 30 years and that means more than $100 billion will flow directly to the Prosperity Fund.
Province wide, LNG is expected to create on average 39,000 annual direct, indirect and induced full-time jobs during a nine-year construction period. As well, there could be as many as 75,000 full-time jobs required once all LNG plants are in full operation…
…Projected total revenues to government are estimated between $130 billion and $260 billion over the next 30 years. In order to maximize the benefits of these developments to future generations of British Columbians, the provincial government is establishing a new British Columbia Prosperity Fund…
During the election campaign, Liberals promised that LNG revenues would not only ensure a debt free British Columbia but gas production would also fund essential spending for health care, education and social services.
So, now, more than four year on, what have we gained? In fact, nothing.
Actually less than nothing since large sums have been wasted on feasibility studies and promotions (Hello, Gordon Wilson) while the likelihood of significant LNG development remains stuck at “not bloody likely.”
Which is a good thing because any LNG exercise in BC would be wholly dependent on taxpayer subsidies and royalty-free natural gas. One example of subsidy is by provision of deeply discounted electricity. In November 2016, Liberals announced the price to LNG operators would be 5.4¢ a KWh. At that time, BC Hydro was buying private power at an average of 9.6¢ a KWh. That would be worse than a 44% loss because of distribution and delivery costs would drive BC Hydro’s cost price even higher.
Clearly, the whole LNG scheme was a fantasy orchestrated for political purpose. Because Liberals fooled a number of low-information voters, on that level, it succeeded. However, when the engine of government is focused on driving a single set of projects, there are unintended opportunity costs from ignoring other sectors. The consequences are illustrated here:
The chart above is made from British Columbia Employment by Detailed Industry, Annual Averages by BC Stats.