In 2008, British Columbia gained $3.2 billion from sale of petroleum and natural gas rights. If the second half of 2019 matches the first, revenue from right offerings for the year will amount to $5 million, less than 1/5 of one percent of 2008, despite substantially increased production of natural gas.
Why the NDP has decided to fight teachers and not the fossil fuel industry is a mystery to me. The volume of BC natural gas production has increased substantially in the 21st century but public revenues have declined to almost immaterial amounts.
Politicians in British Columbia’s two major political parties may speak about the need for urgent climate action in Canada. But, their moves to ramp up this province’s fossil fuel production put them firmly in the camp of climate change deniers.
LNG plants will only be constructed in BC if the province provides unprecedented subsidies and tax relief. Inducements include natural gas that is essentially free of royalties and other levies, electricity at a fraction of the cost BC Hydro incurs for new power and, after passage of Bill 10, tax credits that will eliminate provincial income tax that might otherwise be paid by LNG operators.
Excepting BC Green Party leader Andrew Weaver, politicians on both sides of BC’s Legislature are reluctant to discuss natural gas policies. This week, the BC NDP raised gas subsidies. That’s unfortunate because climate change is a critical threat to the world we live in and fossil fuels are a prime cause.
Canada’s remaining non-renewable energy resources are being sold off in an environment of low prices with minimal and declining returns to governments.
One might think British Columbia’s Auditor General would favour maximum information in financial disclosure. Apparently, not in this province.
As is typical of resource management, the regulating ministry sees its prime purpose is to enhance growth and profitability of companies extracting resources. the public share of produced values is no longer material. This cozy relationship costs taxpayers billions of dollars, money that could be spent on renewable energy, transit, daycare, education or many other responsibilities of government.
The case is clear. British Columbia’s Government decided to reduce the public share of natural gas revenues to almost nothing. This is despite substantial growth in the quantities of natural gas being extracted.
British Columbia sees itself in competition with Alberta to attract gas exploration and production companies. As a result, both provinces have been in a race to the bottom. By giving away its natural gas resource, BC has reached bottom and through its plan to provide below cost electricity, the Horgan Government policy is to pay producers to remove this natural resource. Quite a change from the NDP’s promises before the 2017 election.
BC’s fossil fuel industry benefited from credits worth $902 million in fiscal year 2018 and $4.2 billion in the past five years. Each of the jobs in oil and gas extraction cost BC taxpayers $185,000. A similar amount spent on reducing dependence on fossil fuels would have been more effective in creating jobs and protecting the environment.
Tax expenditures are subsidies delivered through the taxation system. These promote policy goals of government but are subject to far less scrutiny and disclosure than direct spending. The primary beneficiaries of tax expenditures are Canada’s wealthiest citizens and corporations. In British Columbia, natural gas producers, many with foreign ownership, are milking a very generous cash cow.
Citizens of British Columbia are facilitating and subsidizing production of bitumen from Alberta tar sands. How’s that for an example of hypocrisy by a Government that claims it object to expanded shipments of dilbit through Vancouver’s inner harbour?
Some BC politicians are not bright. Either that, or they are thoroughly dishonest. Maybe both. Liberals saw natural gas revenues drop from $11.5 billion in the five years ended March 2011 to $0.8 billion in the five years ended March 2017…
Between 2004 and 2017, the quantity of natural gas produced increased by 64% and the royalties, which once measured over $1.5 billion annually, disappeared.
Many citizens — although not In-Sights readers — will be shocked to learn that credits owed natural gas producers soared by more than $1 billion from April to November 2018. That increase is two and a half times more than the total gas royalties received by government in the three fiscal years ended March 2018. The $3.2 billion balance owed to producers ensures that royalty revenues will remain at paltry levels throughout the Horgan Government’s present term.
In the fiscal years 2016 and 2017, natural gas royalty payments totalled $291 million. However, credits owed producers increased $748 million so, if the province bothered to record these obligations as was recommended by the Office of the Auditor General, the royalty account had a two-year deficit of $457 million. A decade ago, two fiscal years — 2006 and 2007 — produced gas royalty payments of $3.7 billion (2017 dollars) from substantially less production.
Politicians demand ordinary citizens pay increasing amounts of carbon tax — supposedly to reduce fossil fuel consumption — while at the same time they dish out billions of dollars in subsidies to ensure gas companies produce more fossil fuels.
A series of provincial administrations and the politicians and bureaucrats we-the-people employ have consistently lied to us by both commission and omission. By wilful blindness, they have put and are putting lives at risk…
While BC consumers of carbon pay an ever increasing tax — $10 billion since 2009 — carbon producers are enjoying billions of dollars in subsidies. In the fiscal years 2007 through 2017, natural gas companies quietly received benefit of tax expenditures worth almost $8 billion dollars…