2014 Legislative Session: Third Session, 40th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Tuesday, November 4, 2014

Afternoon Sitting

Volume 17, Number 4

ISSN 0709-1281 (Print)
ISSN 1499-2175 (Online)

TUESDAY, NOVEMBER 4, 2014

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Routine Business

Introductions by Members

Hon. J. Rustad: It’s a great pleasure to have members of my Minister’s Advisory Council on Aboriginal Women in the Legislature today for lunch and a series of meetings. Attending in the House today are the chair, Chastity Davis, as well as Mary Teegee, Sophie Pierre, Darlene Shackelly, Paulette Flamond, Debbie Williams, Marge White, Barb Ward-Burkitt and Kim Baird. Would the House please make them welcome.

Orders of the Day

Hon. M. Polak: I call continued second reading debate of Bill 6.

Second Reading of Bills

BILL 6 — LIQUEFIED NATURAL GAS
INCOME TAX ACT

(continued)

D. Plecas: It gives me great pleasure today to join my fellow members and consider Bill 6, the Liquefied Natural Gas Income Tax Act, along with its companion environment legislation, Bill 2, Greenhouse Gas Industrial Reporting and Control Act.

[D. Horne in the chair.]

These are two of the most substantial and historic pieces of legislation to ever be introduced into this House. This legislation will have far-reaching benefits that will extend for generations. Needless to say, it is with great pride and thankfulness that I stand alongside my colleagues and, in particular, the Premier in her steadfast determination and unprecedented vision to launch an entirely new export industry.

Establishing a new industry, as we should expect, is no easy task. Although the natural gas industry has been present in B.C. for 50 years, this is the first time we have made a concerted effort to seek out and capture the interest of energy companies to design and build LNG facilities in B.C. Our critics tell us that we’re facing an uphill battle.

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To begin with, our critics claim that government is hindering our own efforts to attract investment by insisting on developing the cleanest LNG industry on the planet. Yes, it’s true. It would be an easier path if we were to lower our environmental standards, but this is not going to happen.

We are going to choose the more difficult path because it is the right thing to do, not only for us in the present but for succeeding generations of British Columbians. B.C.’s world-leading benchmark will limit GHG emissions to 160,000 tonnes of CO₂ per million tonnes of LNG produced. These are the lowest emissions of any similar facility in the entire world.

The province has arrived at this target by surveying LNG facilities worldwide and determined that a 0.16 benchmark would surpass the standards of any other jurisdiction. One day future generations will look back and thank us for choosing to develop the industry properly.

If we start out on the correct path, then the technology to extract the gas will only begin to improve over time. The legislation we have before us is designed to encourage technological advancement and innovation. The scale of taxation is escalated over time to provide companies the opportunity to invest in better technology — specifically in waste energy, carbon capture, cogeneration and the use of natural gas in vehicles out in the field. These types of technology will drive further innovation.

Our critics have also attacked the government’s efforts to reduce greenhouse gas emissions and become a carbon-neutral government. In fact, the NDP vehemently opposed the carbon tax, saying it would be a disaster for the economy. They said it was impossible to reduce emissions without costing jobs. That was in 2007.

Lo and behold, in 2012 the government achieved its interim target for GHG emissions, that being 6 percent below 2007 levels. This was an aggressive target, and we achieved it without hurting the economy. The government remains committed to eventually achieving a 33 percent reduction and eventually an 80 percent reduction from 2007 GHG levels — so much so that the Minister of Environment noted in her speech in this House last week that British Columbia is a leading example in terms of setting and meeting our own climate change targets.

In fact, we are attracting international attention and literally convincing other jurisdictions to follow our lead. France and Mexico are introducing carbon taxes this year. The European Union is following its regional program, and Chile is announcing plans to implement a carbon tax.

Through the Pacific Coast Collaborative that B.C. is a part of, we know that Oregon and Washington state are also following suit. With this kind of progress, I wonder what is going through the minds of some members opposite who have been quite vocal about opposing carbon offsets. They say carbon offsets are not good policy, that we are essentially paying people to emit and letting polluters get away with it.

If the critics are really serious about opposing carbon offsets, they should inform First Nations in this prov-
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ince, who are currently in the process of negotiating with LNG companies to protect the environment and generate much-needed revenue in those communities. These are B.C.-based offsets and will benefit the province as a whole.

I’d like to remind my fellow members that the proposed tax regime contained in this bill represents just one element that makes British Columbia internationally competitive. We have an abundant supply of natural gas. We have emerging technologies that will continue to drive innovation and more environmental extraction techniques. We have the geographical advantages as Canada’s Pacific Gateway.

More specifically, our large reserves of natural gas are close in proximity to proposed facilities. We have a skilled workforce. We have a robust infrastructure. We have the shortest transport times from North America to key markets in Asia. We have cooler extraction and environmental temperatures that reduce energy costs during the liquefication process.

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It all adds up to the fact that while the price of energy will fluctuate over time, the demand for energy will always increase as countries like India and China grow their middle class. These economies will expect the same comforts and enjoyments that we in developed economies have known for many years. This demand will propel B.C.’s LNG for years to come and generate a source of revenue for generations. For example, if just one medium-sized plant starts to export LNG, it will generate $800 million per year for taxpayers. Currently there are over a dozen LNG plants proposed for B.C.

All of that said, I’m not only supportive of Bill 6; I want to stand up and cheer.

M. Elmore: I’m pleased to rise and speak to Bill 6, the LNG Income Tax Act. As I’m making my remarks, I just want to take us back and cast our memories to the grand promises we heard from the Premier and the B.C. Liberals in their pre-election bluster with respect to prospects for developing the liquefied natural gas reserves that we have in British Columbia.

If you recall, we heard grandiose promises of LNG being able to create tens of thousands, 100,000 jobs; that it would enable B.C. to become debt free — indeed, we saw on the campaign bus of the Premier, “Debt-free B.C.” — as well as promises to eliminate the sales tax and eliminate debt in British Columbia.

In addition to that, we also heard about promises to create a prosperity fund in the amount of $100 million and beyond. Basically, we would see the development lead to these fantastic windfalls for British Columbians, and really, it would solve all our problems. Those were the promises that we heard from the Premier and from the B.C. Liberals since the last election.

Now, today, we are here looking at the reality where the rubber hits the road. We can see, indeed, it’s a contrast, certainly, in the promises that were made and what is being proposed now on the ground and what is the reality. When we look at these areas in terms of the promises, the grand promises we heard for what we would be able to realize over our liquefied natural gas industry, the Premier was quoted: “Development in natural gas can stimulate $1 trillion in new economic activity across the province, 100,000 new jobs and $100 billion over 30 years.”

As well, in terms of debt-free B.C., we heard promises that the debt would be eliminated within 15 years, by 2028. But in actual fact, let’s take a reality check. The claims on the one hand for a debt-free B.C. are met by the reality that we see the total provincial debt as of March 31, the end of the last financial year, at nearly $61 billion. We’ve seen under the Premier that the provincial debt has actually grown the fastest and is the largest in B.C. history. That, certainly, is a real contrast in terms of claims on the one end before the election and the reality today, as we’re discussing Bill 6.

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In addition, finally, we’re seeing the bill come forward, and it’s been just one delay after another. We’ve heard that there were promises — great, grandiose promises — in terms of our LNG sector. When we look at what is proposed with respect to the benefits coming from the LNG sector, we see that in reality it falls far short — falls short of the promises for the windfall that we would be seeing in terms of revenue coming forward, falls short in terms of the promises for jobs, falls short in terms of the promises to create the greenest industry for greenhouse gas emissions around the world.

I’m going to outline each of those areas in terms of the disappointing reality check of where we are in British Columbia with respect to developing our liquefied natural gas reserves. Certainly, the opposition side, the NDP, recognizes that LNG, liquefied natural gas, has played a key role and is an important sector of our economy and has contributed to supporting the British Columbia economy, has created jobs right across the province and is an important resource for us that British Columbians rely on in terms of energy fuelling our homes and our businesses.

When we look at the reality, however, the opposition…. We outline four conditions in terms of balancing our economic development which also apply to our LNG industry. I want to lay those out, because I think it provides a clear contrast in terms of what the opposition is putting forward with respect to how to responsibly develop not only our LNG industry but our economic sector in B.C.

We have outlined four conditions for the LNG industry. One, it should include guarantees of jobs and training for British Columbians and opportunities for British Columbians. Second, we should see…. This is a resource that is in the ground in British Columbia and is owned
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by British Columbians, and certainly there should be a fair return from this resource.

Third, there should be benefits and inclusion of First Nations in terms of consultation, partnership agreements and ensuring that First Nations are included in the development of the industry. Fourth, developing the industry should ensure that we protect our land, air and water and also live up to our climate commitments in terms of greenhouse gas emissions.

We’ve heard from members of the B.C. Liberals that they actually call into question the science of climate change. Again, I’m going to outline the importance of taking our commitments to reduce greenhouse gas emissions seriously and to show leadership on that. We have not seen, I think, a serious commitment towards doing that with respect to our LNG industry.

First, in terms of the opposition, I want to touch on our position that to develop the LNG industry, we must ensure that there are opportunities, jobs and training for British Columbians here in B.C., ensuring that folks who are looking for work have opportunities to work in this field. It’s disappointing that we’ve seen, a number of years, a lack of commitment, a lack of investment and really a dismantling of our apprenticeship trades and skills training programs, which, had they been in place, would be able to equip British Columbians to access jobs that are coming up in the industry.

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In fact, we hear that the Premier, on her recent trips abroad, has been making commitments to hire temporary foreign workers for jobs in the liquefied natural gas industry. I think this is the wrong direction for British Columbia.

We know that there are currently 74,000 temporary foreign workers in B.C. We also have over 100,000 British Columbians looking for work. In particular, we also have a higher-than-average unemployment rate amongst our First Nations indigenous people. Certainly, there’s an mismatch in terms of opportunities coming forward and a real need to provide training and an increased number of apprenticeships to ensure that British Columbians have access to those jobs.

It’s also very troubling, I have to express, in terms of comments that we’ve heard coming from the Premier and also this government with respect to their view on the temporary foreign worker program in British Columbia. It has been characterized that the temporary foreign worker program is an opportunity for workers to come to British Columbia and that they have a path of citizenship. We know that that is not the case.

The temporary foreign worker program is called the temporary foreign worker program, not the permanent immigration program, because it brings workers into British Columbia and into Canada — over 500,000 in Canada and over 70,000 in British Columbia — to work as cheap labour and with very little access to support and services. I think that should be a clear distinction.

When we talk about jobs for our liquefied natural gas industry, we need to see a commitment to training and an increased number of apprenticeships to allow for British Columbians to have access to those skills, to work in those jobs. Two, we need to see a commitment from this government towards permanent immigration, towards inviting and welcoming workers into B.C. and ensuring that they have access to the rights that other workers have and that citizens have.

I’ve heard, and it’s been framed: “Oh, all workers who come into British Columbia have exactly the same rights as any other workers.” But in reality, when you look at the temporary foreign worker program, it is a privatized form of immigration, where workers come in and their passports and their work permits are held by their employers. They’re in a very vulnerable situation. They’re reluctant to come forward if they have difficulties or they’re experiencing problems. Why? If they complain, it’s their employer who puts them on a plane and sends them back.

That is not in line, I think, with values of British Columbians. The Premier and this government should understand the difference between permanent immigration and temporary workers. We need to see a commitment, particularly in the LNG industry, towards respecting workers, ensuring that they have access to services, are treated fairly and are not exploited because of structural weaknesses and structural problems with the temporary foreign worker program. We need to ensure that.

As well, there’s a lack of oversight. There is a lack of responsibility by this government in terms of any type of oversight with respect to the temporary foreign worker program. We have provinces such as Manitoba, Quebec and Ontario that at least have a measure of oversight, where they ensure that employers and also recruiters have to be registered and licensed. Recruiters have to file a bond. If there are problems and if they’re found in violation, they’re removed from the list for approval.

We see basically no oversight or responsibility from this government with respect to monitoring, overseeing and regulating the increasing numbers of temporary foreign workers coming into B.C. At the same time, we see a lack of investment in skills training and apprenticeships to ensure that British Columbians who want to work in these sectors have access to those jobs. As well, a lack of commitment to ensuring that the funding cuts that are coming to English-language-learning courses, to the colleges across B.C. — that that will be supported….

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This is also another area that ensures that naturalized citizens who are here, new immigrants, have access too. Often they come, and they’re highly skilled. This is often a bridging area that allows them to access other opportunities and upgrade their skills.

So this is another area where it’s very disappointing to see a lack of commitment from the government ensuring that
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for the jobs we have here in B.C., we have British Columbians who have the ability to be trained and to be able to avail of these jobs — just a lack of that area being adequately addressed in terms of developing the LNG sector.

As well, when we talk about needing a fair return for our resource, which belongs to all British Columbians, again we’ve seen a disappointing…. I don’t know how you could characterize it except that it’s an appalling lack of ability to negotiate a fair return for British Columbians. We heard grandiose promises, and it really did not contribute towards British Columbia receiving a fair return, I think.

We heard the Premier out making big promises in public and really setting the stage for British Columbians to have any leverage or ability to negotiate a fair return. We saw a huge climb down publicly over the course of eight months, when we heard that the return, in terms of the tax, was expected to be 7 percent, but now we see that it is down to 3½ percent.

We heard our colleague from Fort Langley–Aldergrove, the Minister of Natural Gas Development, characterize the government: “We don’t negotiate taxes.” But I guess when you go into a room with industry and you walk out with a 50 percent lower tax rate — so cutting that in half — that you negotiated your way to a 50 percent lower rate. That is characterized as negotiations but just not very good negotiations.

Interjection.

M. Elmore: “Capitulation,” my colleague from Stikine is commenting.

Certainly, we’re seeing negotiation really from a weakened position and in the wrong direction and really disappointing in terms of ensuring that British Columbians…. On the one hand, we heard great promises before the election in 2013, and now due to the bluster of the Premier in public making big promises and the government having to back down from the official numbers of expecting 7 percent, we’re down to 3.5 percent.

I want to also comment further — the justification around this huge climb-down from 7 percent to 3.5 percent. The reason given for that was that there were changing market conditions, that these conditions had changed and had impacted the reality of being able to secure the 7 percent. Well, on the one hand, my position is that the government should have been well advised about what these changing market positions were. They weren’t any…. You know, it’s not a mystery. It certainly wasn’t a big surprise, and the government should have been very clear about what some of these changing economic conditions were.

[1400]

From the 2014 market overview there was an outlook that the LNG selling prices and expected increases in construction costs have reduced the investor projected returns. We’d seen a decline in the selling prices of LNG — no mystery there.

As well, we saw an increase in the global LNG supply due to competition, again citing that China’s economic growth was slowing. China was acquiring natural gas, had signed an agreement for a natural gas supply. Japan was looking at restarting its nuclear power program. Oil prices were declining, and there were also concerns around increased construction costs. These are economic concerns that were well known and well-established in the financial sector and reported — so no surprise to anyone.

Besides the point that the government should have been well aware and advised of these changing economic conditions, to use it to try and justify that that’s why the tax was cut in half does not add up. Why? The tax that is proposed is a profits tax. It is a surplus profits tax that does not impact…. The tax only applies to the profits that are generated out of the whole production process.

With respect to the rationale that the changing economic conditions contributed towards that, it doesn’t add up. It certainly is a very lame excuse for basically a very poor job on negotiating and British Columbians being pushed back and the Liberal government having to cut the tax in half.

In terms of the opposition, we are also in favour of developing our LNG industry but in a balanced way that includes jobs and training opportunities for British Columbians, ensures that we get a fair return for a resource that belongs to British Columbians and should go toward benefiting all British Columbians. As well, there’s the expectation not only from the opposition but, I think, from British Columbians that developing our LNG industry has to balance the concerns and ensure that our air, land and water are protected and that British Columbia is meeting our climate commitments and our commitments towards reducing greenhouse gas emissions.

Again we see that this is not the case. The previous speaker, the member, characterized that the…. Again there was the promise. We heard the grandiose promise that not only we would see incredible — in the billions of dollars — revenues come forward from liquefied natural gas; we would see a record number of jobs. However, it appears to be that those are available for temporary foreign workers.

We heard that the industry was being touted as being the cleanest industry in the world. This is a big claim. Again, it falls far short of the claim — the claim, on the one hand, of being the greenest industry in the world. The reality is a completely different fact.

When we look at…. It’s on paper. Certainly on paper we see…. We hear the claims that it is the cleanest industry, but when we look at the reality and what the reality is…. You can say one thing — for example, that we’re going to have incredible dollars, hundreds of billions, realized from the industry. But in reality, what do we see? We
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see that it’s cut in half. Again, it’s called into question, and British Columbians are not getting a fair return.

We see, on the one hand, the claim and the promise that we will have multitudes of jobs for British Columbians, and on the other hand, what’s the reality?

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We see that there are record numbers of temporary foreign workers coming in, a lack of commitment from the government for English language learning courses that would allow British Columbians to gain the skills to have those jobs and a lack of investment in apprenticeships and skills training. It doesn’t add up.

When we hear, as well, the claim, on the one hand, that the industry will be the greenest, certainly, in the world…. Now, how does that meet with reality when we look at the facts? Well, we see that it’s….

Interjection.

M. Elmore: On paper that’s the claim. The government and the Premier seem to like saying one thing. They can make wild promises in the public and wild claims.

Interjections.

Deputy Speaker: Members, the member for Vancouver-Kensington has the floor.

M. Elmore: In reality, when we look at…. Is this actually in fact the case? Well, we have that it’s claimed as the cleanest. That’s a great promise. But in reality, that’s in theory. Why? Why is that in theory? Because the legislation does not actually require greenhouse gas reductions. Well, oh, look at that. So we can say one thing and completely do another.

What else? Well, the claim that it’s the cleanest industry…. It only happens to capture 30 percent of the emissions at the plant. There is an exclusion of over two-thirds of greenhouse gas emissions due to upstream emissions. There is a complete…. We’re not even talking about 70 percent of the emissions that are going to be coming out from the industry.

On the one hand, it’s a great promise. When you don’t have an actual cap or when you do not have a need to reduce emissions, that’s a problem. When you also exclude 70 percent of greenhouse gas emissions, that seems to be a big consideration, if this government is serious about actually meeting targets. When we also look that there is…. British Columbians just listen to the great promises but don’t read the fine print around how a free pass is being given for these emissions.

When we talk about the…. There is a UN report out this weekend. I hope members of the government were paying attention, in case more of them had concerns around what the science is around climate change. Do humans have an impact on that? I hope they were paying attention around the recent report that was out from the United Nations outlining the dire consequences and the need to take drastic steps to reduce human-caused greenhouse gas emissions and the impacts on our climate, the impacts on our economy and the impacts on people around the world.

Certainly, the provisions that we have with respect to our liquefied natural gas industry don’t meet those concerns. When we look at…. We actually have a commitment. The government is bound by law to reduce the greenhouse gas emissions in British Columbia by 33 percent. This is looking at…. So we have that law, the requirement, that B.C. must reduce its greenhouse gas emissions by 33 percent by 2020, and that’s by 2007 levels.

The provisions put forward for the liquefied natural gas industry for developing that…. Number one, it is impossible to reach that. The provisions around the greenhouse gas emissions do not set a cap on that or ensure that that will be reduced. It exempts over two-thirds of emissions that come out, and it does not address how to reduce greenhouse gas emissions in other aspects of our economy.

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We are not only falling short; we have…. It’s unacceptable — the lack of leadership and the empty promise. This government is claiming, on the one hand, to deliver the cleanest industry and, in reality, abdicating any responsibility and any commitment around meeting our targets of greenhouse gas emissions. That’s clear.

When we look, as well, in terms of characterizing — to sum up my comments and bring those to a close; I see my time is winding down — the resource that British Columbians value, our liquefied natural gas reserves, there’s a need to ensure that when we develop our industry, it has to be in a balanced way.

The opposition is saying we have to ensure that there’s a guarantee of jobs and training opportunities for British Columbians, that there’s a fair return for our resource, that benefits also have to be extended to First Nations and First Nations have to be included, and that our air, land and water are protected to ensure that our climate commitments are met. And it falls far short.

S. Hamilton: It’s my pleasure to rise in the House today and speak to Bill 6, the Liquefied Natural Gas Income Tax Act. These are indeed exciting times. There’s a real passion that our government has, and that energy is translating into an optimism that we find in every corner of this province. LNG is one of the most exciting areas where we are moving forward and we are constantly growing.

Natural gas is by no means a new industry in British Columbia, as we all know, but we have an unprecedented opportunity to strengthen our economy. Revenue collected by government will support the services we all depend on, like health care, education and infrastructure
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development. We are able to invest in the province’s future and make it a place worthy of leaving to our children and our grandchildren.

B.C. produced 1.6 trillion cubic feet of natural gas over the last 12 months, the energy equivalent of 273 million barrels of oil. By choosing to develop the world’s cleanest-burning resource and ship it to the world’s fastest-growing economies, we’ve chosen growth. Major global companies have shown a strong commitment to B.C.’s natural gas future. These companies are already making large investments to prepare for LNG exports.

The global demand for liquefied natural gas has doubled in the last ten years, and it’s predicted by experts to increase by another 50 percent in the next seven. Demand is flourishing, and we’re uniquely positioned to take advantage of that demand. B.C. is serious about becoming a stable and reliable source of energy on the global stage.

This is one of our classic commitments and, I think, a defining moment for the government in many ways. LNG will diversify our economy and provide a significant source of public revenue for decades to come.

The introduction of the LNG income tax gives proponents the certainty they need to make investment decisions while ensuring that British Columbians receive the revenues they deserve from this expanded industry. The government is confident that B.C. will be highly competitive, an attractive jurisdiction for new investment in B.C.’s new LNG industry. We’ve been consulting with industry on a new revenue framework that will deliver long-term benefits for British Columbia and provide industry with the certainty it requires to be successful.

Currently there are 18 LNG projects in British Columbia that have invested more than $7 billion to acquire natural gas assets right here in B.C. An additional $2 billion has been invested in preparation for construction of B.C.’s LNG infrastructure. If that is not a commitment by the business community and the community that is responsible and is concerned with exporting LNG from our province, I don’t know what is.

In addition to a low overall tax system and a competitive royalty regime, B.C.’s LNG industry has many advantages over rival jurisdictions: large reserves of natural gas in close proximity to proposed facilities, a skilled workforce, a robust infrastructure, the shortest transport times from North America to key Asia markets, and a cooler extraction and environmental temperature that reduces energy costs during the liquefaction process.

This legislation is another step towards providing the certainty companies need to move forward and make final investment decisions.

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The LNG income tax applies to the net income derived from liquefaction activities at LNG facilities in B.C. The tax rate on net income will be 3.5 percent, effective for taxation years beginning on or after January 1, 2017. During that period when net operating losses and the capital investments are being deducted, a tax rate of 1.5 percent will apply and is credible against the 3.5 percent tax.

In 2037 the tax rate on net income will increase from 3.5 to 5 percent. This ensures the proponents have the time to build a strong foundation in the communities in which they operate before the full extent of the tax is applied. It also ensures revenue flows for the next generation of British Columbians.

To encourage investment, the tax framework will see a new B.C. corporate income tax rate available to any LNG income tax payer that sets up a permanent establishment in B.C. This credit will be calculated based on the cost of natural gas owed at the LNG facility inlet. The credit will have the effect of reducing the provincial corporate income tax rate from 11 percent to as low as 8 percent for that company, making this the lowest corporate income tax rate in Canada. This will help attract new corporate income tax revenue to B.C.

LNG represents massive potential for British Columbia, and our LNG income tax regime is just one element that makes B.C. internationally competitive for new LNG development. We have the supply. We have the technology, and we have a great geographic advantage. We can move forward to develop this industry that the whole province will benefit from.

Specifically, in addition to the overall tax burden and competitive royalty regime in B.C., we have the largest reserves of natural gas in close proximity to proposed facilities. We have a skilled workforce and, as I mentioned before, a robust infrastructure. It’s going to be a huge benefit as we go forward.

One important goal remains the elimination of the provincial debt over time. Let me speak to that. The revenues derived from the LNG industry are significant and will help to further diversify our economy and reduce the provincial debt. But wait. We already have one of the lowest debt-to-GDP ratios and lowest debt in the country. By pursuing a robust LNG industry that generates more revenue, government will be able to pay down that debt faster, reducing the burden on future generations.

The LNG export industry will support strong economic growth and provide employment opportunities throughout B.C. Revenues derived from the LNG sector will assist the province to reduce the provincial debt quicker and support infrastructure in government services such as health care and education.

Over the coming years, the provincial government will be helping communities prepare for the emerging opportunities and demands of a growing natural gas sector and new LNG industry. Preparing for economic growth is a good challenge to have. We have a once-in-a-generation opportunity to harness the potential of new jobs and development.

In May we announced grants of up to $1 million to
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help local governments affected by significant industrial growth in the northwest. Already communities are receiving grants and undertaking initiatives such as housing assessment and action plans. Together, we will determine how to capitalize on economic opportunities, while at the same time we will help these communities with their challenges. Call them growing pains, if you will, but what a problem to have.

Let me digress. Let me mention the comments made by the member for North Coast just yesterday afternoon in this House. She said, among other things — and I’ll join my colleague the member for North Vancouver–Seymour in thanking her: “I do look forward to the construction jobs that they’ll benefit from. I do look forward to the training opportunities that we’ll get. I support the LNG industry.”

Oh, and then she had a conversation with a real estate agent in her constituency who said that they have a zero percent vacancy rate, all based on speculation of LNG. What a problem to have: a zero vacancy rate. What will that lead to? Let me think about it for a second. Maybe more housing starts? Maybe more opportunities for people to live in the community? I don’t think that’s a bad problem to have. It’s a challenge, and we’re helping smaller communities deal with that challenge as we go forward.

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One of the final things the member for the North Coast says is: “We want to be partners in the LNG industry. We’re trying to prepare. We’re trying to contribute.” I thank her for that as well. I’m glad to see that she joins us in celebrating the opportunities that we have going forward.

First Nations also have an important and direct role in the development of our natural gas export potential, and that’s why we have a particular focus on ensuring that aboriginal people benefit fully from economic and labour market opportunities. Skills-training and apprentice programs are being expanded to increase First Nation participation.

We signed an economic partnership agreement with 15 First Nations along the planned pipeline route for Kitimat LNG, a proposal by Chevron Canada. Similar agreements are being negotiated now to secure long-term economic opportunities for First Nations all over B.C. As a result, First Nations will have a new source of economic strength and stability.

B.C.’s Skills for Jobs Blueprint: Re-engineering Education and Training ensures that B.C. has the trained workers needed to fill the top LNG-related jobs and other in-demand occupations, placing our youth and workers first in line for the jobs of the future.

By 2022 we’re expecting one million job openings in British Columbia, along with an increase in demand for more and higher skills. More than 78 percent of jobs will require some form of post-secondary education, and 43 percent will be in trades and technical occupations.

Our plan shifts funding and programs to data-driven systems where training dollars and programs are targeted to jobs in demand. Not only will our new system be data-driven; it will be outcome-driven. As the economy evolves, we will adjust funding and programming. We will track, measure and report out on performance and outcomes to ensure that we’re achieving the desired goals.

Our blueprint is focused on changing culture and attitudes, and that includes getting more young people involved earlier in trades and technical training. Our government currently invests almost $7.6 billion each year in education and training. Re-engineering our system doesn’t mean spending more. It means targeting more of the substantial resources already available to meet labour market priorities.

That’s why, starting this fiscal year, we’re targeting over $160 million to do just that. In four years this will reach nearly $400 million annually. Over the span of our ten-year plan, this represents about $3 billion redirected toward training for high-demand occupations.

The blueprint we’ve developed sets out the actions we must take to make the most effective use of our existing resources and future investments in education and training.

It’s actions such as doubling the number of ACE IT spaces to 5,000 over the next two years, giving students more choices and encouraging more students to pursue skills and trades training; targeting $270 million annually, by 2017-2018, of post-secondary operating grants towards in-demand jobs; investing $185 million in infrastructure targeted for skills and trades training; investing $6.6 million in critical trade seats to reduce the wait times in trades critical to the LNG sector and other industries; reforming the Industry Training Authority so that B.C.’s trades-training system is ready to meet the growing demand for workers; using up-to-date, industry-validated data to drive program decisions; and increasing apprenticeships in high-demand areas.

For kids and parents in the K-to-12 system, we want them to have a head start to hands-on learning so they’re ready for the workforce and more advanced training when they graduate.

For students in colleges, universities and institutes, we’re matching training with jobs in demand and maximizing the spaces available to provide for the programs students need to compete successfully in the workforce.

For people looking to get into the workforce or move up in the workplace, we’re building stronger partnerships with industry and labour to better connect British Columbians with the on-the-job classroom training they’ll need to boost their skills or achieve certification.

We’re working collaboratively with industry, labour and First Nations to deliver the skilled workforce B.C.’s growing LNG and other sectors need and to create the opportunities for long-term, well-paying jobs that strengthen our families and our communities.
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B.C.’s skills-for-jobs blueprint is about making sure British Columbians have the skills they need and are first in line to get the jobs of the future. Our priority is to ensure British Columbians are first in line, Canadians second, and then we look outside our borders.

[1425]

The B.C. jobs plan is our long-term strategy to a secure, strong and prosperous economy for British Columbians now and for generations to come. The focus is on four cross-sector areas of strategic priority: small business, international trade, manufacturing and aboriginal peoples and First Nations. Each of these is an area of renewed focus to help foster job creation across the original eight sectors of the jobs plan: agrifoods, forestry, international education, mining and energy, natural gas technology and green economy, tourism and transportation.

Supporting job creation is our top priority, and through the B.C. jobs plan we’re supporting economic growth, diversification and opportunity to fuel job creation, supporting families in communities throughout British Columbia.

British Columbia’s robust fiscal record creates the greatest certainty for industry investment. With our strong record of fiscal responsibility, balanced budgets, low and declining debt-to-GDP ratios and triple-A credit ratings, British Columbia provides stability and reliability, which is crucial for investment decisions.

Creating an LNG industry is a priority, which is why our decisions across government are coordinated to ensure it’s created in a nimble, fair, competitive and an environmentally stable way. To help, an LNG strategy was developed which set in motion a plan to build the industry. The strategy focuses on building infrastructure to get goods to market, creating jobs for families and creating economic advantages that will leave a lasting legacy for future generations of British Columbians.

The strategy captured the attention of large companies and global investors who have since come forward with a variety of LNG proposals now at various stages of development. Most of these projects are planned for northwest British Columbia, in communities such as Kitimat and Prince Rupert. These projects are so significant that they represent the largest private sector investment proposals in the province’s history.

The strategy we have developed to meet the LNG industry’s workforce challenges engages with labour, industry, First Nations and government in the planning process. We will continue to work with these partners moving forward and ensure industry that B.C. has the qualified and skilled workforce to meet those challenges.

LNG is also specifically affecting growth in my community of Delta. This is due in part to the Tilbury LNG facility expansion. In November 2013 FortisBC announced plans for a $400 million expansion of its Tilbury LNG facility, including one additional storage tank and associated liquefaction equipment. The expansion will provide LNG to the transportation market, remote communities and the marketplace in general.

Since the November 2013 expansion announcement there has been considerable interest for LNG supply — from the Pacific Northwest, Hawaii, Alaska and international markets. Our friends have been in my office. We’ve had those discussions. It’s real, and I invite any member in this chamber who wants to come and see it to visit my community. I’d be glad to take you for a tour.

On Friday, August 8, 2014, Hawaii’s electric board approved an LNG supply agreement with FortisBC. Our abundance of natural gas and our proximity to the Asian ports have rewarded us in British Columbia with the competitive advantage of LNG and that sector, and we must act upon it now. We recognize how fast-growing this industry is, and we’re working with our Asian trading partners to make sure that we’re ready for their investments in the industry.

The economic benefits in British Columbia are immense, and we will reward all British Columbians in every region with new jobs, in procurement opportunities and with increased government revenues to invest in hospitals, schools and transportation infrastructure.

Stewardship, as it relates to environmental responsibility, will also make B.C. global leaders in energy markets.

I questioned the remarks from the member for Vancouver-Fairview earlier this morning, and he said: “The highest environmental standards can’t simply be a statement. It has to be accompanied by a plan, a plan that shows British Columbians how this government intends to meet the greenhouse gas emission targets.” Well, I think we’re doing that. It’s a little thing called Bill 2, and we’re debating it in this House. It’s one of the most progressive pieces of legislation that this House has probably ever seen when it comes to this environment and how we protect it.

[1430]

We’re seeing opportunities in our communities already because of the LNG industry, with hundreds of millions of dollars already being spent. Our government is working on revenue-sharing opportunities so that local governments and First Nations can share in the benefits that will come with a growing resource sector.

Manufacturing drives all sectors of the B.C. jobs plan — in forestry, agrifoods, technology, mining, natural gas. In 2013 alone manufacturing contributed $13.8 billion to the B.C. economy. With investment in growth and the export and domestic markets, it is anticipated that demand for our province’s manufactured goods and services will grow, particularly in Asia.

Annacis Island and the Tilbury Industrial Park, two of the largest business parks in B.C., support manufacturing, processing and supply facilities within a community of high-end industry. What makes these sites unique is the range of industrial activity that takes place there.
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[R. Chouhan in the chair.]

These businesses and those like them need a highly trained workforce. In support of this, our government has invested $1.5 million in funding to move training programs to a new centre in Delta, on Annacis Island. The heavy-duty transportation programs offered by the B.C. Institute of Technology and Vancouver Community College are now being taught at the new motive power centre.

This centre is going to train heavy-duty mechanics, transport trailer mechanics, diesel mechanics, commercial and transportation mechanics, railway conductors and forklift operators, among others. These are good, skilled trades that will help British Columbians earn good livings and support their families. It should also be noted that the majority of manufacturing jobs are permanent, full-time positions, with an average wage 15 percent higher than the provincial average.

It makes sense to locate these programs from two schools into one centre focused on heavy-duty transportation. Students from this new motive power centre will be in demand. It’s estimated that 43 percent of the one million jobs expected to be created by 2020 will require trades or technical training. The new motive power centre opened this September and will play an integral role in the B.C. jobs plan.

An estimated 13,000 people are already employed in B.C. in the field of heavy-duty commercial transportation. As diesel technicians and transport trailer technicians, they will be in high demand. When the new motive power centre opens later this year, it will truly mark a new chapter in the economic security of British Columbians and in my riding of Delta North. Manufacturing is a part of our community and supports all businesses and families within it.

I’ll close by asking for the members opposite to simply come forward and take a position on this issue. We have had the critic for LNG dancing around saying everything but “we support this industry.” I think that deep down in their hearts they really do support it, because they don’t want to have to say no to economic growth and economic prosperity in this province. It’s a good thing, and I think everyone knows it. Everyone should embrace it.

In the immortal words of Monty Hall: “Come on down.” I mean, join us in helping make this province a better place to live for ourselves, our children and our grandchildren. We can do this together. You know what? We’ll probably give you a little credit.

It’s important that this industry not have marbles thrown at its feet every step of the way. We need encouragement. We need help from this entire House. It’s going to be for the benefit of ourselves, our province and everyone who is going to live in this province in the years to come. Having said that, thank you very much for your time.

H. Bains: It is my honour to stand and to speak on the bill. I would say it is quite a defining moment, as the member previous to me, from Delta North, put it. I will speak to this bill, but let me talk about this defining moment that the member for Delta North talked about.

Yes, but I must say that this is another one of those moments when this government misled the people of this province, misled the constituents of each one of the members represented there. I dare to go back to add some of the other moments that this government went through.

[1435]

You remember when they said they would not rip up collective agreements before the election? Do you remember that, Member? Then what did they do after the election? They did exactly what they said they would not do.

You remember that they would not sell B.C. Rail? Then after the election, well, they did exactly what…. Another defining moment for this government — saying one thing before the election and doing quite the opposite.

A member from Duncan talked about the HST. You remember that? The government said no to the HST before the election. What did they do after the election? Yes, they brought in HST. Another defining moment of this government — saying one thing before the election and doing quite the opposite.

You may also recall that they said before 2009 that it would be a balanced budget. Guess what. After the election it was like a $2 billion deficit — again, saying one thing before the election and doing quite the opposite.

We are seeing the same movie again, another one of those moments of this government saying one thing before the election and doing quite the opposite. Let’s examine what they said before the election about this particular bill that they are talking about today.

You know, I don’t fault the member for Delta North for following the instructions that come from the Premier. They have spin doctors sitting downstairs. How many do they have? About 200 of them? The way they’re churning up these speeches for these members to stay within the box, they may have to hire more spin doctors down below to help the Premier. I don’t fault them. They are doing what they’re told, being good soldiers. They’re doing what they’re told, but the reality is quite the opposite.

If they really think through…. He would not have said this is a defining moment if he knew the history of how this government actually has operated election after election after election, saying one thing before the election and doing quite the opposite after.

I will get into this particular bill. This bill actually is designed to deliver what this government said that they would deliver, what they said before the election. You may remember that they said that through this industry they will have a $100 billion prosperity fund. They said that there will be 100,000 jobs. They said that there will be no sales tax. They said that our debt will be paid off. You’ve
[ Page 5192 ]
seen that bus. I saw that bus: “Debt-free B.C.”

What actually has happened after the election? Debt is growing at a faster rate than any time in history under the watch of this Premier. Starting at $45 billion when this Premier took over, it is going to be $68.9 billion during this fiscal cycle — $25 billion dollars. And they call themselves fiscally responsible. The fastest rate of growth of debt under the watch of this Premier.

The member for Stikine talked about being fiscally responsible and having good managers. We have example after example after example of how they bungled up all those projects — cost overrun after cost overrun after cost overrun. No wonder we don’t have money available for our schools. We don’t have money available for our health care. We don’t have money available for our roads and infrastructure. That’s the legacy of this government.

Let’s examine this bill a bit more in detail. You would wonder how they came up with 100,000 jobs, how they actually came up with the prosperity fund. Where did they come up with those numbers? What they did is they went out, and being prudent, I would say, they wanted to show that they’re prudent. What did they do? They commissioned a study. They commissioned a report by Mr. Grant Thornton. But they told him what those conditions would be and what multipliers he must use and how many jobs they must use per facility.

[1440]

This is what happened. The member for Columbia River–Revelstoke brought it up yesterday, and I think it’s worth repeating what he actually said, because it was so factual. It set the exact direction where this government is coming from.

Basically what they have done is created artificial and false assumptions. That’s how they came up with those numbers. What did they do? They told Mr. Grant Thornton, “These are the numbers that you must use,” and then came up with…. They knew the result they wanted to have in that study. They knew it right in the beginning, so this is what they did. They said to Grant Thornton: “You have to use the number 2,400 as the number of jobs that will be provided by those five LNG plants.”

Do we have five LNG plants out there right now? Do we have one? Well, it was supposed to start in 2013, I believe. Wasn’t it? What happened? Where is it?

Interjection.

H. Bains: The Minister of Finance says: “I think it’s 2015.” All right, so are we going to have, in 2015, any of those plants up and running and producing? No.

Anyway, let’s take a look at what they did: five LNG plants, the 2,400 jobs that they must use. That’s how they came up with the 100,000 jobs. Then they said: “You must use a multiplier of 30. Each of those jobs would have the multiplying effect of all the indirect jobs.” It’s a 30 multiplier that they used.

So that everyone knows, in this House and outside, exactly the same study was conducted by the House of Representatives in the United States. What did they do? Their multiplier was 3.5. The 30 is what this government, this Premier, gave to Grant Thornton that they must use as a multiplier. In the United States — the same industry, talking about the same stuff — they used a multiplier of 3.5. Eight times — what do you call that? Those are false assumptions. Don’t you?

They came up with the number that they wanted, then they went to the public and said: “Well, that’s how many jobs it will create.” No wonder people are questioning.

Let’s take a look at the Ernst and Young report also. You know what they have to say? They said: “Look, the Liberals gave us, doing the math…. Don’t blame us. We just came up with the numbers that they gave us, so don’t blame us. It’s their math. Those are the numbers that they gave us, so what can we do? Don’t blame us.” That’s how they created those false assumptions.

Now they’re facing the reality. Now we know exactly what’s going to happen. That’s why I’m saying to those members — you know, the backbenchers: don’t just pick up the numbers that are given and the spin that is passed on to you by the Premier’s bureaucrats. Well, not the bureaucrats, but the PAB, as they used to call it — whatever they call them. The spin doctors, I call them. Those are the people who write their speeches and put the boxes together: “You must stay within this message box and keep on repeating.”

You have a job to do for your constituents. You are accountable to your constituents. All of these members: you went out there, each one of you, before the election. You promised all of these things to your constituents. We didn’t. I didn’t.

I have no problem saying yes to this bill, because I know this is the reality now, but you misinformed your constituents. You will have to look deep down in your conscience. How are you going to support this? You’re not delivering what you promised your constituents through this bill. That’s what is happening.

How are you going to look them in the eye and say: “I didn’t deliver what I told you that I would deliver. I’m not doing it, because that’s what the Premier tells us to do. The Premier told us before the election that this is what’s coming, but now the reality is not even half of it. It’s not even a fraction of what we promised.”

That’s the role that you have now. That’s the responsibility that you have — to go back to your constituents. How are you going to face them? How in good conscience can you support this bill?

Deputy Speaker: Through the Chair, Member.

H. Bains: You promised so much.

Deputy Speaker: Member, through the Chair.

[1445]

H. Bains: Through you, Mr. Speaker.

You promised so much to your constituents — 100,000 jobs, $100 billion prosperity fund, no sales tax. All debt will be paid off. That’s what you promised. Are you delivering all of that through this bill?

Look at the numbers — not even close. How are you going to face your constituents? How are you going to say yes to this bill when you know that you promised something different to your constituents than what you’re delivering today, what you’re voting on?

I don’t have an issue in supporting this. To me, even if this created 100 jobs, I’d take them. These are good jobs, good-paying jobs — 200 jobs, 1,000 jobs. Whatever comes, I’m for jobs. I will support the bill because of the jobs, but I will not oversell. I never oversold. I didn’t. I can, in good conscience, support this, but I have issue…. I don’t know how they are going to live with their conscience when they go back to their constituents and say: “We’re not delivering what we promised.”

Well, I guess some of those who were here in 2001, 2005 and 2009 — they’ve done it before, right? They’ve done it before, so I don’t think they will have any issue with this. It’s all the new members that came on board after the 2013 elections. How are you going to go back and face your constituents? Each one of you promised all of those things to your constituents. Now you have to go back. “We’re voting, actually, on something different than what we promised to you.” That’s the dilemma that they’re in. I would support it because jobs are attached to this.

Despite the fact that they have bungled up negotiations with the industry…. They’ve completely bungled up. I’ve done some negotiations. You don’t show your cards going to the table and then expect that you will get everything you want. That’s exactly what this Premier did. That’s how they did it. Like the member from Duncan said yesterday in his speech, I’d love to negotiate with these folks — love to negotiate the way they are negotiating. I would like to see them on the other side of the table when we’re doing some negotiations. That’s not how you conduct negotiations.

Well, let’s talk about some of the other things that are being said. The minister of gas, I guess they call him now. I don’t know what the real title is. They said: “You walked into a room with industry and walked out with a 50 percent lower tax rate.” They said: “We don’t negotiate taxes.” But you did. You walked in there, and you negotiated 50 percent lower taxes. You negotiated your way to 50 percent lower taxes. Those are wonderful negotiations. Then he went on to say: “The project development agreements, on the other side, are negotiations.”

You have started off by giving away B.C. tax revenue. What’s next — jobs? I think the minister had an issue yesterday with us saying those jobs should go to British Columbians. He had a big issue with that.

Interjections.

H. Bains: Well, read the Hansard yesterday. That’s exactly what he had issue…. I don’t see a big problem. British Columbians must get those jobs. That’s the way it should be. That’s the issue here.

The Premier somehow said that the temporary foreign worker is the mantra to our immigration. That’s what she’s saying. The minister echoed those comments. The minister echoed the same comments. Are they saying that instead of real immigration we bring everyone through the temporary foreign worker process, and then, if we like them, we’ll keep them and give them immigration? That’s not immigration.

Don’t confuse the two. There’s an immigration system where people come here as immigrants. That’s how Canada was built. But they want to bring in temporary foreign workers. They get abused, they get exploited, and the government is saying nothing, doing nothing to protect them.

[1450]

Why aren’t you putting in some measures so that they don’t get abused and they don’t get exploited? You know how many cases you have.

Interjections.

Deputy Speaker: Members.

H. Bains: Manitoba — they wanted to do a progressive way of dealing with them. What did they do? They actually said that if temporary foreign workers are coming, they will provide them protection. And they do have protection.

But here they are closing their eyes to abuse and exploitation — closing their eyes. They’ve done nothing to protect them — nothing — and then they think that’s the way to immigration. That’s what they’re promoting — immigration through temporary foreign workers.

Immigration is what Canada was built on and this province was built on. You don’t have to hand over your passport. You shouldn’t have to hand your passport to your employer, as is the case with temporary foreign workers.

How many cases are out there? The minister knows that. If they want to know that, they could actually get out there and find out how many of those cases there are. They don’t want to do anything. They don’t want to provide them protection, so they think nothing happens. They bury their heads in the sand like nothing is happening. That’s not how Canada was built.

We say that if they are good enough to work in Canada, if their skills are needed, then why don’t you make them full-time immigrants with full rights? That’s how you bring them here. If those skills are needed, bring them here full-time. If you have a shortage of skills…. That program was put in place because there will be times when we don’t have particular skills in certain areas. We
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may not get workers in certain areas because of the geographical situation.

If you need them, in the past you’d bring them in as immigrants — full immigrants — and then they have full rights. At least when they see that there is…. If there’s abuse, they have a place to go to exert their rights.

But no. No, that’s not where they want to go. Then they accuse others somehow that we are against immigration. It’s just so ridiculous — the comments that come from the Premier every time she says something about anything. That’s why it’s hard to believe anything they say anymore.

An Hon. Member: Are you done yet?

H. Bains: Not yet. I have a lot to say. I know the minister loves to hear me speak.

We say that LNG, if you manage it right, is the right industry. This is the right industry if you do it right. How do you make it right? You include an express guarantee of jobs and training opportunities for British Columbians — not like this Premier.

On one hand, they’re saying B.C. workers come first, then Canadians. On one hand, that’s what they say. But then she runs around the world promising the rest of the world to train their workers to come and work on our LNG projects. That’s what they do: say one thing here and do quite the opposite.

So guarantee jobs and training opportunities for British Columbians, provide a fair return to our province. You don’t see much of a return here.

Interjections.

Deputy Speaker: Members. Members, let’s have one speech at a time, please.

Continue, Member.

H. Bains: Thank you, Mr. Speaker.

You know, any time you touch a sore point, they start to babble away. They don’t like to hear the truth.

I said an express guarantee of jobs and training opportunities for British Columbians. That’s how you can do it. That’s one of the conditions. Then you provide a fair return to our province — not that you promise 7 percent, and then you negotiate 3½ percent. Then out of the 3½ percent, all the preconstruction cost, all of the cost overruns, plus the corporate income tax — 3 percent — that can be deducted from it.

[1455]

What is left for British Columbia, people will be wondering. No job guarantees from this group here to British Columbians and hardly any return.

Also, we say that the third condition must be the benefit for our First Nations. They must be consulted, and they must be full partners on that.

Also, for our children and their children, we protect our air, land and water, including living up to our climate commitments that we made. Not what they are trying to profess in Bill 2.

What are they saying? They said originally…. This is what they said.

Interjection.

H. Bains: The Minister of Jobs doesn’t want to hear some of the facts here.

This is what they said. They promised the cleanest LNG life cycle. That’s what they said. That’s what they promised. What are they delivering? The cleanest LNG facilities. You know what the difference is, Minister? About 70 percent. What they are capturing here under Bill 2 is only 30 percent, which is just the facility. Upstream, nothing.

None of that is included in this. That’s where 70 percent of the emissions come from. They’re not included under Bill 2. Only 30 percent is included — so not delivering what they promised. They said the cleanest LNG life cycle, which means upstream and the facility. But guess what they are promising under Bill 2? Only the LNG facility, which captures only 30 percent of the emissions. That’s what they are promising.

Well, you know, it’s true to their form: say one thing, promise everything, know what to say, know what people like to hear, and that’s what they will say. But then they deliver only what they already know they want to deliver, which usually is quite the opposite. That is a serious problem with this.

Let’s look at some of the bill’s conditions. Taxes cut in half. They said it is because of the changing economic conditions. Well, let’s examine that for a minute.

In 2012 Macquarie Bank wrote a report which doubted that even four LNG plants would be built in B.C. but predicted that B.C. would become an LNG exporter by 2020. They suggest that delays, cost overruns and emerging markets are all real threats that could undermine the economics of the project. September 2012. Did that ever stop this government from continuing to make those outlandish promises? No.

Then let’s go to February 2013. The B.C. government came out with its predictions for the prosperity fund, including 100,000 jobs. The report by Grant Thornton used an econometric model provided by the province that produced an estimated 30 indirect and induced jobs — were created for each assumed direct job. They created…. They knew that those jobs were not there. Now they can’t blame the economic conditions.

Again in 2013, in April, at an LNG conference in Vancouver, global energy experts doubted the credibility — they named the Premier’s name; I will not name it — of the Premier’s optimism. They said Asian buyers won’t be paying the windfall prices that have been in place since Japan shut down 48 of its 50 nuclear power stations after the Fukushima disaster, that Asian buyers will seek to re-
[ Page 5195 ]
coup the price of gas from the price of oil, and that B.C. will face stiff competition over prices, with new supply coming from Africa, the U.S. and Australia.

Our own Jock Finlayson of the Business Council of B.C. predicted some time ago that the United States will be self-sufficient — not only self-sufficient within the next ten years, but they will be in a position to export energy.

[1500]

Can you imagine? The highest importer of energy will be in a position within ten years to export energy. What will do that do to the world prices? They were warned, so they can’t come in here now and say: “Well, we didn’t know the world market condition.”

They were warned about stiff competition coming from Africa, from U.S., Australia and Asia. They said that those countries, those jurisdictions, have geographical advantage over Canada. That’s what they warned them. Now they’re saying, “economic conditions,” so cut the tax from 7 percent to 3.5 percent.

Then in May 2013 Citigroup warned that we will face increased supply competition after the U.S. Department of Energy approved 26 LNG export facility applications in Texas on the U.S. Gulf of Mexico.

I mean, all of that is no secret. This government…. They have experts. They know exactly what is going on, on the world market, but they ignore all of that. They continue to promise outlandish promises and outlandish assumptions that they will continue to make about creation of jobs, about a $100 billion prosperity fund, about no sales tax, about debt-free B.C.

They knew that they could not deliver. They knew that that’s what’s coming, and that’s what they will be facing. They can’t use today and come here and say: “Well, economic conditions have changed all of this. Then it’s from 7 percent to 3.5 percent, and that’s why we will allow them to deduct their preconstruction costs, their cost overruns. And any cost overruns will be also there for them to deduct — and then also the copper income tax 3 percent rebate or the credit that they will be entitled to.”

In October 2013 Canada West Foundation wrote a report titled Managing Expectations, assessing B.C.’s LNG industry. It said that Asia may soon have more than enough natural gas of its own and that B.C. will face competition from domestic production in China and from pipeline imports to China. Our minister here responded to the report by saying: “I don’t mind being accused of being an optimist.”

They knew that the market conditions are changing. They can’t just come in here now with: “Well, we didn’t know.” That’s not a good enough excuse. The problem is they overpromise. They showed their cards before they went to the table, bungled up negotiations. So who’s going to pay?

It will be the British Columbians. It will be British Columbians who should have those jobs and training opportunities. They will not have them. Therefore, it’s this government, it’s the Premier and the minister who should be actually looking in the mirror and saying: “Who?”

It’s not the market conditions. Look in the face; look in the mirror. You are the people who are responsible for not having to get us $7 rather than $3½.

In December 2013 there was a conference in India of the Asian buyers club. Countries representing 70 percent of the world LNG import, including India, Japan, South Korea, China and Taiwan, met to discuss how to get a better deal. All of them are working to have a better deal, only this government says that they didn’t know.

Russia signed a big.…

Deputy Speaker: Thank you, Member.

H. Bains: Time ran out. I have a lot to say. I know the minister is going to miss that now.

L. Throness: Well, I’m really happy to speak to Bill 6, which is the Liquefied Natural Gas Income Tax Act. I’ve been listening to the member for Surrey-Newton. It seems like he’s pushing and pulling at the same time. He’s fighting the act. He’s criticizing the government. He’s angry. Yet he’s going to vote for it in the end.

It will not be the first time and not the last that the NDP have criticized and turned around and then done the opposite. They will have to be dragged into prosperity. We’re happy to do that as a government because all taxpayers, whether NDP taxpayers or B.C. Liberal or whatever, are going to benefit. All British Columbians are going to benefit from this great regime of LNG that we’re putting into place.

[1505]

I have a confession to make, and that is that I’m not a tax expert. We have 86 pages of tax information here. The language of the bill is pretty well incomprehensible to me. I don’t claim to be a tax expert, so I’m going to talk to the big principles of the bill with regard to LNG in B.C.

I want to set the stage for my comments by talking about the price of natural gas, because the tax regime that we’re setting in place is integrally linked to the international price of natural gas — and particularly natural gas in Asia, as opposed to the U.S.

The price of gas today in North America is about $4 per million Btu. The price in Asia, though, is closer to $10. It shows us where our most desirable market has to be. It’s not in North America. North America has plenty of natural gas. It has an abundant supply. It has an oversupply. It has a glut of natural gas. So we have to turn toward Asia, and that’s why we’ve been focusing on exporting LNG to China and Japan and other places like that.

The Premier has pointed this out before. It’s the only policy that makes sense. However, there is a downward trend in natural gas prices around the world. Even the
[ Page 5196 ]
Asian price fell by nearly half in the first half of this year, from about $18 to about $10 per million Btu.

In February, while the price was still high, we announced our tax regime. It was a preferred regime. It had a maximum price of 7 percent as a tax, and it made good sense. But when we saw the price fall nearly in half, we had to adjust our expectations to meet that changing reality, and we’ve done that.

The market fell, roughly, in half. It makes sense that our tax rate would also fall by about the same amount, so we’ve set that tax at 3½ percent. Since natural gas prices tend to go along with oil prices, the news today that oil has fallen to a new low of $77 a barrel is a signal that gas prices could also fall even more, and it could stay like that for some time.

It underscores the wisdom of the lower rate that is set by this act. Now, our tax rate, 3½ percent, is not going to change until the year 2037, and it’s going to move up then, from 3½ to 5 percent, which will give us 23 years of certainty and stability. The industry knows that we’re going to have stability beyond that as well, when it moves up to 5 percent, but for 23 years we’re going to have a low tax rate of 3½ percent.

Companies know we have a stable economy. We have a stable government. We have a stable workforce. They can trust that the rates that we set will be stable. It provides an incentive to companies to make their final investment quickly in a couple of ways.

First, if prices move back up again…. And I would point out here that demand in Asia is huge. Demand in Asia is projected to go through the roof as China replaces coal with natural gas, and gas prices might go up over time. So it’s good to lock in now so that you can make more profit over a longer period of time as prices go back up with demand. It’s a good incentive to have this tax rate.

The second incentive for the tax rate is to start projects as early as possible to benefit from that low tax rate for as long as possible. Every year they wait to begin production is one year less that they will get to enjoy the lower rate, and one year more that they’re going to have to pay the higher rate of 5 percent after 2037. That could make a big difference over time, so it provides an incentive for companies not to wait but to start construction right now, to make that decision to take full advantage of the low rate for as long as possible.

We think it’s working already. I want to quote today from an article in the Globe and Mail yesterday, where the president of Chevron’s exploration arm said this: “The British Columbia government is very attentive to the realities of the industry. They have listened to what we have said, they have listened to what the buyers have said, and I think they’ve made some very good moves in terms of what reality is out there and what it takes to make these projects economic.” [Applause.] Yes, that’s worth applause.

People were afraid that we would land outside the zone, that we would chase business away with our tax rates, but companies are very seriously considering this legislation. I want to point out that we have 18 companies that have expressed interest, and none have actually pulled out. They’re still in the game. Chevron lost a partner, that’s true. BG Group said a few days ago that they’re going to delay their decision, but that’s far from pulling out.

In fact, companies have already spent almost $9 billion in B.C.’s north to buy assets like land and natural gas and to build infrastructure and to prepare the way for their bids. They’re playing for keeps. They would not be investing like this if they were not serious. We think it’s eventually going to bear positive results for B.C.

[1510]

Now, let me talk for a moment about the benefits of LNG for B.C. Can we quantify them? Well, first, there are all sorts of intangible benefits that are hard to quantify, like the feeling of hope and optimism and confidence that LNG is going to bring to B.C. We could talk about the training of a great workforce. We could talk about greater involvement and prosperity for First Nations people, the value of new people moving here from other parts of Canada and around the world — especially to B.C.’s north, where the population is low.

We could talk about the development of northern cities and rural areas, new demand for all sorts of products and services, the positive impact on agriculture, the building of new schools and homes and communities, new opportunities for recreation. As well as work, the social and cultural benefits can be huge.

There are, of course, more tangible economic benefits which are all important, because we have several streams of revenue, not just one, not just this tax. There’s the private sector revenue, the income that workers are going to bring home and they’re going to spend. They’re going to buy all sorts of things and pay consumption and income taxes to the government.

There’s the revenue from construction and all of its spinoff revenue. There are corporate and provincial taxes to be paid as well as the LNG tax. There are also offsets that companies are going to pay to meet greenhouse gas targets and research funds that they’re going to invest in. All of that is going to stimulate all kinds of other projects.

It’s estimated that just one plant will bring in, when all the streams of revenue are totalled, about $8 billion over a ten-year period. That means that four plants over 23 years during a period of lower taxation are going to bring in revenue to the tune of $75 billion. Five facilities would yield just over $90 billion.

Now, we thought it was going to be a little more than that. We’re a bit disappointed that we had to lower our tax, but this is hardly small change. This is a massive amount of money, and it’s going to allow us to create a prosperity fund. It will allow us to slash our public debt and make us a leader in Canada in terms of debt-to-GDP ratio. It’s going to ensure that our social programs remain strong.
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We’re going to be able to do many great things for B.C. in the decades to come.

I want to point out that this incredible chance, this incredible opportunity, this once-in-a-lifetime chance is presented to this province virtually free of charge. There’s no downside risk; there’s only upside opportunity. The taxpayers of B.C. don’t have to invest billions to make B.C. ready for these companies. They’re coming on their own. They’re attracted by the market. They’re paying their own way, and we are going to reap the benefits.

We call the shots in terms of the environment. We call the shots in terms of how the companies develop and where the development happens. We’re in the driver’s seat in these projects. British Columbia is in the driver’s seat.

Now, what if LNG is not as successful as we had hoped? What if fewer companies invest than we anticipated? If it should happen that the government loses face — and that would be fine; the government could lose face — at least taxpayers will not have lost anything. In fact, we will have already gained much through the almost $9 billion that has already been spent, and we’re going to make contacts around the world who know now that B.C. is open for business and B.C. is a great place to invest. The global interest we have generated alone could produce fruit, quite apart from LNG.

I want to give some reasons, because my constituents may be wondering: why should a company locate in B.C. and not in Australia or the U.S. or some other place? First of all, we have large reserves of natural gas, huge reserves, and we have access to that gas. How much gas do we have? A report, exactly one year ago, was made public. It said that we have three trillion cubic feet of natural gas. That’s enough to serve all of this province and a full-scale LNG export industry for 150 years — 150 years. We have no shortage of natural gas here, and British Columbians never have to worry about a lack of domestic supply.

What’s another reason, another advantage? We have a highly skilled workforce, and we’re going to need it because we’re expecting one million new jobs by 2023. Almost half of them — 43 percent — will require trades and technical training, so we’re going to augment our workforce to meet this challenge. We’ve invested in more trades and technical training. Our plan to do so was made public by the Minister of Tourism and Jobs.

[1515]

We’re revamping both secondary and post-secondary school systems to give more opportunities earlier for skills training, so students can make the decision about their careers as early as possible. We’re going to match skills training with jobs. We’re going to partner with industry to make sure it all happens. The key point here is that we have a plan, and we’re funding that plan to make it work for jobs for British Columbians.

What’s another reason? We have robust infrastructure. We have a top-notch power grid with the sixth-lowest electricity cost in North America already. We have clean electricity. We have a great highway system. We have a magnificent port in Prince Rupert, a port in Kitimat. Of course, companies are going to add to that infrastructure themselves.

One of our greatest natural advantages lies in our location on the globe. We have some of the shortest transport times from North America to key Asian markets, closer by up to three days. In fact, Prince Rupert is 68 hours closer to Shanghai than Los Angeles. That’s a very important difference and an important natural advantage on the market.

Another very natural advantage has to do with location. Natural gas comes from B.C.’s north where it’s cold. This means that the gas comes out of the ground at a cooler temperature than other places. When you’re cooling gas down to minus 160 degrees centigrade, that is a significant advantage. It marks a significant savings in energy and, therefore, in cost. In fact, our temperatures are a third cooler than Australia and 25 percent cooler than Louisiana — two of our competitors. This makes it more attractive to situate an LNG facility right here.

Finally, we have stable government here in B.C. There are many parts of the world that have great resources, but they don’t have a long tradition of democratic rule and the rule of law. That is a real business risk. Governments can change the rules in the middle of the game, and companies are concerned about that risk.

In addition to a stable democracy here in B.C., we are a government that is fiscally sound, that’s fiscally responsible. We’ve balanced our budget for two years in a row, and that gives comfort to companies. Because we’re exercising fiscal discipline today, we’re not going to need to raid the piggy bank in the future. It all makes it more likely that companies are going to situate here in B.C.

In that regard, I want to talk about an announcement today by Shell. Shell has not made a final decision yet on its huge proposal, but it has taken a step forward by announcing a power deal with B.C. Hydro where it’s going to build transmission lines in order to tap into B.C. Hydro’s grid.

I want to read a few sentences from LNG Canada’s press release. “This is the first power agreement signed in B.C. with an LNG proponent.” I think that’s great news. Although they’re going to use natural gas turbines, and highly efficient turbines, to drive the refrigerant compressors, all the other needs, all the auxiliary power needs, are going to be driven by B.C. Hydro’s clean electricity. I want to add that First Nations are in on this. “Coastal First Nations welcomes this decision by LNG Canada.”

I want read further. The agreement details “the development, operation and maintenance of transmission infrastructure required to connect the proposed facility to B.C. Hydro’s grid.” LNG Canada is going to fund the improvement of the infrastructure. Although several steps remain, already expenditures are taking place.

I see this development, this agreement today as something like one more piece in a great big jigsaw puzzle. It’s
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putting all the pieces in place, and as each piece of the puzzle falls into place, the picture gets clearer. We can see the picture filling out and becoming clearer step by step. In the end I believe that Shell’s commitment, LNG Canada’s commitment, will become more and more obvious as it takes step after step. So the final investment decision is not going to be a surprise. It’s just going to be that last piece of the puzzle that’s going to complete the picture that has taken years to complete. We hope for that announcement very soon.

For all of the reasons that I’ve cited above, LNG is going to be great for my riding. It’s going to be great for our province. It’s going to be great for Canada and great for the environment. It means cleaner air and less pollution around the world. British Columbians can be grateful for the vision and foresight of those who lead our government. I don’t think there’s another government in Canada like it, and I will heartily lend my support to Bill 6.

[1520]

Deputy Speaker: Member for North Island. [Applause.]

C. Trevena: I thank my colleagues for their support.

It’s a little difficult, I think, to follow the grandiose hyperbole of the previous speaker. It’s going to be great for B.C., great for Canada, great for the environment, great for everything.

The member for Chilliwack-Hope is following on in the same hyperbolic language of his colleagues. We had the member for Abbotsford South earlier today talking about how proud he is, and this is a steadfast vision for B.C. Yesterday we had the member from Peace River talking about how it’s going to be bringing out millions of jobs. It’s quite extraordinary. The language that is coming from the governing side about this is inflating what we already know to be a myth.

We’re here to speak about Bill 6, the Liquefied Natural Gas Income Tax Act. I think everybody recognizes it is a complex act. The government has noted it’s a complex act. Our side of the House has noted it’s a complex act. It is about a tax regime for liquefied natural gas for the….

Interjection.

Deputy Speaker: Member, you have to go to your own seat.

C. Trevena: I think everybody is very aware it’s a very complex bill. It’s dealing with the tax regime for one of our natural resources. But it’s very interesting to hear the members from the other side talk about this. The member for Peace River South is now talking in hyperbolic terms, that by 2022 we’re expecting one million jobs in B.C. He does manage to narrow it down to the 100,000 we’re supposed to be getting for LNG.

We have, as I mentioned, the member for Abbotsford South talking about the amazing opportunities. The member for Chilliwack-Hope: this incredible once-in-a-lifetime chance. We need to, I think, get a bit more grounded. Perhaps the member for — I’m just double checking — North Vancouver–Seymour is getting us back to ground when she says in the debate, when she’s just finding out about liquefied natural gas…. Apparently, she just found out about it last week and said to the House:

“What they did was they converted the gas to liquid, and then they went back to gas. And they showed how if there was a spill, there is no spill. It was very eloquent.

“Apparently, we are going to be utilizing that fellow” — somebody she’s quoting — “and another fellow from Science World to go around and explain to the communities what exactly LNG is and not to be afraid. Because I think the number one thing that we’re dealing with right now in a lot of communities is fear. We want to make sure that there is no fear….”

Hyperbole or fear. I think we need a bit of honesty and a bit of straight talking here. We have not been having that for at least two years. Since the Premier came into office we have had constant inflation of the concept of what liquefied natural gas is going to do. We on this side of the House tend to mock a little because it’s so improbable — so improbable.

The Minister of Natural Gas, I think, is, to be honest…. When I talk about his colleagues…. It’s all backbenchers who are standing up and saying how wonderful it is. They’re all desperate to get in cabinet. They all want to prove that they can use the message box really adequately and that they will have their opportunity to be a backroom cabinet member who doesn’t even have the ability to stand up in question period to answer questions.

The Minister of Natural Gas has been heckling through most of our speeches. At least it shows he’s paying attention. He’s been talking about the fact that we’re not going to be voting in favour of it, yet each of us has stood up and said: “We are very troubled by the way that the government has gone about it, and we know that this is an important resource. Yes, we support the fact that we’ve got liquefied natural gas, and we’re supporting the bill.”

But the minister himself has been, in his statement to the House…. My colleague from Columbia River–Revelstoke had the opportunity to speak immediately after him and was just astounded by the minister’s words, and it’s not surprising. I mean, the Minister of Natural Gas, the person who is leading the province about this — there we are — says: “We don’t negotiate taxes.” There he is. He says it in Hansard. “We don’t negotiate taxes.”

[1525]

Yet if they don’t negotiate taxes, how come in February, when we had the budget…? We got lots of big graphs. It’s all in colour. We have slides up around the Legislature now because the government hasn’t got the ability to have a reasoned argument or a reasoned delivery. It’s got to do everything in PowerPoint.

It has its slides there telling us why we’re going to have
[ Page 5199 ]
this amazing return of 7 percent on the liquefied natural gas tax, and then they go in and they seem to negotiate the tax. They go in and talk to the companies. The companies say, “We’re not going to put up with that. That’s far too much,” and they say: “Okay. All right. Sorry. We’re really desperate. We’ll take 3½. Will 3½ percent work? That’s good. But don’t worry; it’s not going to be till 2037. Is that good enough for you?”

This is a minister who says they don’t negotiate taxes. They cave in on taxes. Of course it’s not a negotiation; it’s caving in. I mean, it’s selling out the province. This is the minister who has been heckling throughout all our speeches and continues to heckle, who says: “Well, project development agreements, on the other hand, are negotiations. Unlike taxes where we just cave in and sell out, project development agreements are negotiations.”

You give up the tax revenues, so what is next? We’ve had discussions here about temporary foreign workers. We’ve had discussions about the labour force. What is next? We’ve had the Premier going over to India on her trade mission when we just got back to the Legislature. And she decided that…. Despite, when she was running for office, that the Legislature was the best place in the world where she always wanted to be, she got out as quickly as possible.

So we come back to the Legislature. She goes off to India on a trade mission, and then she starts out saying: “Oh, by the way, we’re going to sign agreements to bring temporary foreign workers over to work in LNG.” This is quite extraordinary.

Then we go on…. This is all a little bit late. We were supposed to be debating this bill last November. This was a bill that we had been promised was going to be…. November 2013 was when it was expected.

It was coming after the election, when we had these amazing, inflated ideas of this prosperity fund and everything was going to be wonderful, with those unicorns and butterflies and flowers and fairies and everything else. We’re going to pay off the debt, we’re going to have trillions and zillions of dollars, and everybody will be really happy. You know, B.C. would be the nirvana, the golden land, the place in the west where everybody was just idling around and enjoying the wealth.

But we are a year late. We have companies who are very worried about what’s happening. But the Minister of Natural Gas, the minister who is also Deputy Premier and still the Minister Responsible for Housing, for some reason, says: “No, the fact of the matter is we’re actually right on time.” A year late. I think anybody can see that we are a year late, but for the minister we are right on time.

When this government was running for election…. We have to go back to the election promises. This is the crux of some of our real problems with what this government’s talking about with LNG. It’s going back to that “Debt-free B.C.” emblazoned on the bus and the promises of gazillions of money in the prosperity fund. We also were told that there were going to be five new LNG plants in B.C. before the end of the decade. Well, you know, it’s a bit hard when we’re not really right on time to get those five new LNG plants.

A report was commissioned by the province from Grant Thornton, a very respectable organization. A report was commissioned from them which…. At the time they were trying to prove their jobs claim, and I’m going to come back to that because it’s important. It’s important because in Campbell River, one of the communities that I represent, the biggest community in my constituency, we have an LNG plant that wants to move in, Discovery LNG. It’s got the mill site. It wants to build an LNG plant there. So as a representative of my community, I am concerned that it is right, that we get this right.

Grant Thornton, in a report, said the first project is going to start in 2013, the second in 2015 and the remaining three projects in 2016. Well, since we’re in 2014 and there’s a lot of bare earth around the place…. Discovery LNG, at Campbell River, has got the mill site. It has taken apart what was left of the mill, and that’s about it. Other places are still pretty well raw sites.

The Kitimat plant was going to be up and running by 2015. That’s just next year. We’re in November 2014, and the government might have missed this. The Minister of Natural Gas might have missed this. The Minister of Natural Gas who says to this House that we’re right on time might have missed the fact that we’re just two months away from the next year when we’re supposed to have these plants up and running.

[1530]

We are 11 months behind schedule, 12 months behind schedule for this legislation. I mean, it’s a weighty piece of legislation. We’re still only debating it. We’ve got to go through the committee stage of it, where we have that reasoned discussion with the minister about what each clause means. We find out a bit more. We unwrap it a bit more. They’re able to unwrap it a bit more. We can work out just what it all means. That takes a lot of time. After this week in the House we have two weeks left until we wrap up our session. So it’s going to be tight, getting us there a year late — not, as the minister said, just on time.

Then we have the other issue of the cleanest life cycle for LNG. This is what the Premier said: “We’re going to have the cleanest life cycle for LNG. It’s going to be wonderful.” The Minister of Natural Gas repeated this again yesterday: “It’s going to be fantastic.”

Life cycle, as we discussed when we were discussing Bill 2, is from the wellhead to the tanker, to when it’s shipped out. Seventy percent of the emissions are upstream. They’re near the wellhead. They’re in the pipelines. They’re where you’re pulling the gas out of the ground. Thirty percent are in the plants. Yet as we discussed in Bill 2, when we debated Bill 2, which is now in committee stage…. When we debated that, the government had no response for why they had backtracked on that.
[ Page 5200 ]

We keep hearing…. I go back to the minister who is supposed to have the gravitas — a strange concept, really, for a B.C. Liberal minister to have gravitas. I know they don’t. But the Minister of Natural Gas is supposed to have some gravitas. He is our representative. He is the one who is supposed to be negotiating a good rate of return for the B.C. taxpayer — he’s not really done that — supposed to be having reasoned debate, reasoned argument in this Legislature.

I understand that the backbenchers…. Many of them are new. They’re still learning the ropes. They are still eagerly taking those message-box speeches that are given to them by the boys in the downstairs rooms and standing up there reading them.

You would have thought that the minister would have a bit more gravitas in his speech and not just turn around and say in a debate, “I’m sure they’ll vote against the tax,” which is what he kept repeating about us, as the opposition. “I’m sure they’ll vote against the tax.” I heard him saying it again today, chirping away. “I’m sure that you’re going to vote against it. You’re going to vote against it.”

Here we had yesterday, in his speech on this all-important piece of legislation, which is going to be a financial underpinning for us as a province for many, many years to come…. We know that the tax rate only goes up in 2037 to 5 percent. The depth of his comments, really, is: “They’re going to vote against it.” It’s a bit like the school yard, the kid in the school yard going: “Nyah, nyah, nyah. You’re wrong; I’m right.” This is not reasoned debate. This is not bringing gravitas that we need to the argument.

This concept that we are so opposed to LNG — I just do not understand it. We’ve been very clear on this side of the House, very clear that we support the industry if it’s done properly. We have no problem with the industry if it’s done properly. It is too important to get it wrong.

This is one of our natural resources that, if handled well, will ensure that we have a wealthy future. It will ensure that our province can do for its people what it should be doing for its people. It hasn’t been doing for the last 12 years. I’ve got to admit that it’s been pretty well ignoring a lot of what the people of B.C. need.

If you manage your resources right, whether it is your stumpage for your logs, whether it is your royalties for your mines or whether it is the tax regime for LNG, you’ve to get it right, because we are a resource-based province. We still are. It’s the resources from the rural areas and rural communities like mine — where there are two mines, and forestry is a big industry still. These are the resources that pay for what we in B.C. expect — our education, our health care, our social services — what we don’t get, but what we expect we should get in a civilized democratic society.

So we want to make sure that we get it right. We don’t think that this is getting it right. We have four conditions, and I expressed them in my response to Bill 2, but I’ll repeat them, just in case the Minister of Natural Gas is actually listening and not just wanting to chirp away again.

[1535]

One is that there have to be guarantees of jobs and training opportunities for B.C. people. We’ve got to make sure that our people are being trained and our people are getting put to work. I see in my own community people going off to the tar sands in Alberta all the time. I mean, it’s just constant. People are in the airports constantly — guys going out to work in the tar sands. We need to be able to bring people to work in B.C., to bring people home.

In Campbell River there is huge anticipation. We have construction right at the moment. We’ve got the John Hart dam happening. We’ve got the hospital happening. There is hope that the LNG plant will also create jobs. People want to come home to work. We’ve got to make sure that the jobs and the training opportunities of B.C. are here.

Another of our conditions is that it has to provide a fair return for the resource. That’s what comes to the crux of this bill. We don’t think this bill is ensuring that there is a fair return for our resource. What is the people’s resource — it is B.C.’s resource — is just going to be sold cheap. That’s what it is.

I can think of very little else. I keep looking at this bill and reading through it and reading the commentary on it. What keeps coming back is that it’s a sellout. It’s a sellout of B.C. We have a resource. We have a resource that there is a desire for. We’ve heard from members of both sides of the House. We’re aware that there is a market. But let’s get it right. Let’s make sure we get the revenue.

The third of our conditions is that when we’re developing this industry, we’ve got to include First Nations. We have to ensure that there is equity there for First Nations. For too long they have been ignored both in economic development and in social development in our province. This is essential for us as we work on this industry.

The final of our conditions. We support this, but we have to make sure that our land, our air and our water are protected and that we’re living up to our climate commitments. We discussed this in Bill 2. Again, I think this is selling out. I think Bill 2 really is very dangerous, what’s happening there.

I’m not going to revisit all the arguments of Bill 2, but what is clear is that the government’s plan for LNG doesn’t protect our environment. It’s no longer the cleanest LNG in the world. It’s clean LNG plants with these conditions and these conditions that deal with 30 percent of the emissions — you know, read it as you will — but this is in the face of such clear evidence of climate change.

If the government had an ounce of credibility, first off, it would have had a much more rigorous approach to emissions in that bill. If it was really serious about climate change and combatting greenhouse gases and emissions; if it as a government was not thinking in the same vein as
[ Page 5201 ]
the member for Chilliwack-Hope, who talks about pollution rather than climate change; if the government actually embraced the reality that we have climate change, it would have done something.

We had, just last Sunday, the UN panel on climate science underlining that climate change is happening so rapidly that we have to act right now and we’ve got to reduce greenhouse gas emissions to zero this century. The UN has asked world leaders to get involved in this, to do something. We are elected politicians of a province. We are leaders. The government might run around with hyperbole, but we are supposed to be leaders.

We’re supposed to be doing something for the people of this province. Yet when we have a challenge like a new industry that we want to make sure is working in a 21st-century way and protecting our environment, what do we do? We just throw up our hands and say: “Oh, it’s yours. Do what you want. We’re not worried about it. It’ll be fine.” This is basically what Bill 2 said. There are so many environmental loopholes, it is frightening. Yet we on this side of the House, as I say, are supportive of the industry. It is our job, as opposition, to show the deficiencies. And there are major deficiencies.

[1540]

We hear from the government about the jobs. There will be jobs here. We’ll have the trickle-down of jobs when we have LNG. Even there the government seems to have got it wrong.

As I mentioned earlier, we’re getting more and more temporary foreign workers, the indication is. So Bill 6 — here we are — for the fall legislative session. This is a session when we really are just here to debate two bills. The rest is ancillary; it’s housekeeping work that needed to be done. We came back essentially for these two LNG bills. They do really fail miserably in ensuring that we do get that fair return for our resource.

What the Premier promised back at election time was a prosperity fund — $100 billion, loads of money. She may as well have sold the tooth fairy, put on her bus: “The tooth fairy is coming. It’s going to be wonderful. I have a magic wand, and your world is going to be miraculous.”

The Minister of Finance has admitted, even in estimates earlier this year, that his new tax structure “cuts the LNG income tax revenues in half over a ten-year period” — cutting it in half over a ten-year period.

So was this all a miscalculation? Did they really think that they were going to be charging X percentage in tax — 7 percent in tax — and get this revenue? Or was it just another sign of economic incompetence? We do see an awful lot of economic faux pas, failings, mistakes and missteps from that side of the House.

I find it incredible that they still try and sell the reputation of being good fiscal managers, because time and time again we’ve seen overspends, whether it is on roofs, on roads, on construction sites. We had this discussion about the money that’s going to the 3Ps — that we didn’t have to be paying the interest, which is so much higher on 3Ps. We had that discussion yesterday.

Here, where we had the opportunity to make good money — not this prosperity fund that was going to pay off the debt and, you know, leave us happier, but to make good money — they have got it wrong.

I mean, I think it is a sign when the minister backs down when he goes into negotiations. “We don’t negotiate tax. We just say: ‘Accept whatever big multinational companies suggest.’” The government doesn’t realize they’re playing with the big kids now. They really are. The multinationals called their bluff. They said…. Obviously we weren’t privy to the conversation, but we all have a good inkling of what happened. It’s like: “You put this tax rate up; we’re walking. We can go anywhere, and we don’t mind that we’ve spent millions and millions of dollars, because we’ve got millions and millions of dollars to spare. So you guys play by our game.”

I think that’s what happened. I’m guessing it wasn’t a miscalculation. I think that economic incompetence is really a strong possibility — and, you know, the fact that they caved.

I have a real sadness. I was wondering whether it’s with just being cynical, but I think it’s a sadness that so many people fell for the Premier’s hokum before the last election that we were going to be debt-free, that we were going to have all this money flooding in.

What hasn’t been addressed and what we have to keep reminding that side of the House is that under this Premier’s watch, the debt — which was going to be eradicated under LNG revenues but obviously now can’t be because we are now at the 3½ percent mark — has gone from $45 billion when the Premier took over…. It will be at $69 billion — $69 billion; it’s an incredible amount — by 2017. By the next election, $69 billion from $45 billion.

[1545]

That’s a pretty sharp increase in debt. That doesn’t include if the government moves on Site C — add another $8 billion to it. I am incredulous about this.

Under the Premier’s scenario, we’re going to have 11 years to get rid of it. But that means the slogan “Debt-free B.C….” LNG would need to collect $6.3 billion a year. This tax regime isn’t going to be bringing in that. That’s quite clear. So “Debt-free B.C.”? I think that’s gone up in a puff of smoke. Maybe it’s just a little piece of fairy dust there as well.

Back in April last year energy experts at the Pacific Energy Summit said the Premier’s optimism about LNG wasn’t credible. But people like to dream — you know, they buy lottery tickets — and they clearly dreamt on this. I don’t really understand why this absolute desperation for people —”This is what we have to do; we have to get rid of the debt” — when we also know we need to be investing in our infrastructure, and we are sadly lacking in doing that. So people bet on the Premier, and she let them down.
[ Page 5202 ]

I’m going to go a little bit on some of the figures. Like the member for Chilliwack-Hope, I’m not an economist. I rely on people briefing me, on reading analyses, on looking through the bill. I’m looking forward to getting some better understanding of it as we move on through the committee stage.

There are some very raw figures that we have to address. In the February budget, as I mentioned, we were going to have a 7 percent tax, up to 7 percent. Today we’re going to have 3½ percent, and even then, there’s a catch. There’s a catch to this. There are two tiers to this tax. Tier 1 is a 1½ percent tax rate — 1½ percent. Soon we’re going to be down to nothing, and I kid you not. I’m not going to foreshadow….

Tier 1, 1½ percent. Tier 2, this massive 3½ percent, comes in when capital construction costs have been paid off, which is estimated to be about four years. But you know how it takes a while? And it could take longer and longer, in which case the companies are still paying 1½ percent. And then that tier 1 tax is creditable. In other words, it can be used against this tier 2 tax, that 3½ percent.

These companies have got a very sweet gas deal. They really have an extraordinary one. And it gets better, because the rate is going to go up to 5 percent, eventually — in 2037. For 20 years this province is going to have to live with this government’s financial incompetence, financial miscalculations. It is quite incredible. It’s getting quite incredible.

I’ve got to say that it goes right back to the election, where it was quite clear that the Premier and this government would literally say anything, sell anything, do anything to keep in power. Saying and doing whatever it takes.

That is going to be felt by our environment and in our economy. I’ve got to ask: how long do they think they can get away with it? Until nothing at all is left? Until their corporate buddies are completely satiated and they move on to another resource-rich landscape? There are others.

We’ve been left with an act that is going to impoverish our province, is selling us short. It has shown, as I’ve said before, incompetence, miscalculation and complete arrogance by a government that thinks it can do anything, when it is really, really handling our affairs badly.

[1550]

D. Bing: On behalf of my constituents of Maple Ridge–Pitt Meadows, I am pleased to rise and speak to Bill 6, the Liquefied Natural Gas Income Tax Act. I join my colleagues in recognizing the historical importance of this particular legislation, as well as the Greenhouse Gas Industrial Reporting and Control Act. These two pieces of legislation achieve a number of key objectives that will make LNG a success in this province.

Bill 6 sets out a tax regime that will attract investment and ensure a fair return to British Columbians. In addition, the Greenhouse Gas Industrial Reporting and Control Act makes good on a government commitment to design and build the cleanest LNG industry in the world. I can assure you, Hon. Speaker, that protection of the environment and quality of life are top priorities in the minds of my constituents of Maple Ridge–Pitt Meadows.

Air quality is of particular concern. That’s one of the reasons why the government is ushering in the strictest environmental standards in the world for LNG. Our target is to limit GHG emissions to 160,000 tonnes of CO₂ per million tonnes of LNG produced. While those numbers may sound abstract to most people, what it does mean is that the government took a look around the world at leading LNG plants and then set a standard well above any LNG facility currently in operation on this planet.

By setting the highest standard, the government is taking a more difficult route. While it might have been easier to attract investment with lower environmental standards than other jurisdictions, the government wants to set a world standard for environmental protection. There is a very good reason for setting the highest standard. We do it because it is the most effective way to meet the province’s climate goals.

While critics of LNG claim that we can’t grow the economy and reduce greenhouse gases, I would like to point out that last June it was announced that B.C. had successfully reached its first interim GHG emissions target. It was 6 percent below 2007 levels by 2012.

As a leader in taking action on climate change, British Columbia remains committed to achieving a 33 percent reduction initially, and eventually an 80 percent reduction of greenhouse gas emissions from 2007 levels.

Moving on, in terms of the tax share that British Columbians will enjoy from the LNG industry, the government arrived at a tax framework based on four design principles: (1) provide a fair return for British Columbians, (2) maintain a competitive jurisdiction, (3) provide predictability for proponents and (4) provide consistent treatment of proponents.

As the Minister of Finance indicated yesterday, Bill 6 imposes a tax of 3.5 percent. In order to attract investment and maintain a competitive jurisdiction, LNG companies will be able to deduct capital investment and operation losses during the start-up phase of development. Eventually a 3.5 percent rate will increase to 5 percent in 2037. This provides predictability and consistent treatment for LNG companies, but it will also provide British Columbia with a steady source of income for generations to come.

For example, if just one medium-sized LNG plant starts exporting from British Columbia, it will generate $800 million in government revenue every year. Currently there are over a dozen LNG plants proposed for B.C. You can imagine the kind of relief that will come
[ Page 5203 ]
to individual B.C. taxpayers, not to mention the kind of investment in health and education that all British Columbians would like to see.

As the Minister of Natural Gas Development pointed out in his speech in the House yesterday, there are a number of competitive advantages that British Columbia has above and beyond an attractive tax regime.

B.C. has the shortest transportation routes from the North American continent to key Asian markets. But one of the things that is seldom raised is the competitive advantage that we have with cooler temperatures to extract natural gas. This means it takes less energy to liquefy natural gas in British Columbia than it does, for example, in Perth, Australia. Less energy means it costs less money to produce. That is the reason why so many companies are interested in setting up LNG operations in our province.

[1555]

Another thing I’d like to take away from yesterday’s debate is the comments by my colleague from Peace River South. He is a long-time resident of the north and has worked in the natural gas industry for many years. He has shown his support for LNG by travelling throughout the province and encouraging business in British Columbia to prepare for exciting opportunities that will come along with an LNG export industry.

There will be tremendous spinoff opportunities to serve the LNG industry, ranging from electricians to accountants. I want to congratulate the hon. member for promoting the LNG-Buy B.C. program.

I think it is important to listen to people who have worked in the industry and know the potential of LNG. During yesterday’s debate, the hon. member for Peace River South made comments that put the whole debate in context for me.

“When everybody in this House has a nice hot shower in the morning in the wintertime, when people in this House turn on their furnaces to warm their homes, I hope they can actually thank the people up in northeast British Columbia, the ones that are working hard to get the gas out of the ground….

“We should be thanking the people who installed the pipelines in the ground that get the gas to our house. We should be thanking those companies that we have here in British Columbia that are employing thousands and thousands of people and offering a better quality of life for us right here in B.C.”

Those are the words of my colleague for Peace River South.

When members of this House are asked to vote either in favour of or against this legislation, I would like them to consider the fact that we are attempting to establish a world standard in the LNG industry for environmental controls and create jobs for British Columbia for generations to come.

That is why I am supporting this legislation.

K. Corrigan: It gives me a great deal of pleasure to stand up and speak on Bill 6, the tax regime for LNG development in British Columbia.

Unfortunately, I didn’t get a chance to speak on Bill 2, but when you put the two bills together, I think there’s a lot of disappointment for British Columbia. Certainly, on Bill 2 — and I won’t go into it extensively — there was a promise that we were going to have the greenest LNG development on the planet and then great promises in terms of our environment.

In fact, what we’ve learned in regard to this bill is that there are many loopholes, as there are in Bill 6, and that, in fact, the vast majority of the LNG production process from wellhead to export, 70 percent or so, is not covered by the legislation.

There are many loopholes as well in terms of the targets — that, basically, companies can buy their way out of the targets. There’s really nothing in Bill 2 that will ensure that we actually have a reduction of greenhouse gases in British Columbia. In fact, I would argue that we will have a significant increase in greenhouse gases.

However government tries to couch it, however government tries to candy-coat it, the reality is that we are going to be adding to the climate change problem in British Columbia directly as a result of the legislation that this government has brought forward, as opposed to a reduction. That’s not a good thing in 2014.

I also want to just mention again the conditions that we have talked about because I think it’s important to remember that the official opposition says that there are four conditions. We recognize that there is potential in the liquefied natural gas industry. We recognize that there’s economic potential, development potential — and development potential in a part of the province that can really use that development.

We’re supportive. We have been supportive of development of that potential, but making sure that it is balanced and that it respects certain principles.

[D. Horne in the chair.]

Those four conditions, those four principles — because the LNG industry is just too important to get wrong — are that it must include express guarantees of jobs and training opportunities for British Columbians. Of course, this is a tax bill, but we haven’t seen anything. We’ve seen nothing from this government at a time when there is a real opportunity. We have seen nothing from this government that will guarantee jobs and training opportunities for British Columbia.

[1600]

To the contrary, what we have seen is a Premier who has espoused a real potential for increased temporary foreign workers, as opposed to people in British Columbia.

Unfortunately, because we have had 13 years of this government, we’ve had 13 years of neglect — 13 years of neglect of the opportunity to improve the potential for training opportunities for British Columbians for exactly this type of opportunity. It’s one of the problems that the government has been faced with in pursuing liquefied natural gas. The government has been faced with scrambling, has had to scramble.
[ Page 5204 ]

It’s had to scramble on the negotiating front, because the government made huge promises in the 2013 election. The Premier, particularly, made huge promises in early 2013 in her throne speech. The government made huge promises that this was going to be the panacea — that this was going to create a debt-free B.C., that it was going to result in 100,000 jobs and a $1 trillion, I believe it was, prosperity fund.

It is quite breathtaking, the change that we’ve had from February of 2013 to now. This was in the throne speech in February 2013 that LNG development is poised to trigger approximately $1 trillion in cumulative GDP within British Columbia over the next 30 years — and that means $100 billion will flow directly to the prosperity fund; that provincewide LNG is expected to create an average 39,000 annual direct, indirect and induced full-time jobs during a nine-year construction period; and that, as well, there could be 75,000 full-time jobs.

The promises were breathtaking — and the slogan “Debt-free B.C.,” particularly — considering that we have a Premier that has presided over the fastest increase in the debt in the history of British Columbia.

The promises that we were going to have a debt-free B.C., that we were going to have hundreds of millions of dollars, that we were going to have thousands of thousands of jobs and that we were going to wipe out the debt were pretty breathtaking and, I’ve got to say once again, show the gall and chutzpah of somebody who can stand in front of the province and make promises that, it appears now, were not based in reality.

What is the reality? That was in February of 2013, and things have changed over the last year and a bit. We have now a tax regime that less than a year ago was going to provide a 7 percent tax rate. Now, we’re down to 3.5 percent. We’re half of what the promise was.

We have many promises. What it raises to me is an issue of credibility. That issue is: did anybody on that side of the House — the Premier, anybody — really believe those promises when they were made to the people of British Columbia in February of 2013? I mean, either they believed them — and the evidence now is that that should not have been believed — or they didn’t.

Interjection.

K. Corrigan: Yeah, we have many, many years, I agree. I agree with the Health Minister. We have many, many years, and it’s going to be many, many years and decades. The time is stretching way out before these wonderful promises of trillions of dollars that are going to be realized in British Columbia.

Unfortunately, what is happening is that the vast promises — the Elysian heights we were going to reach and that were being promised to the electors of this province in 2013 — are not anywhere close to credible.

[1605]

I hear ministers in question period now saying things like: “Well, that was aspirational.” Can you imagine if the members from the other side of the House during the election in 2013, instead of “Debt-free B.C.” had said: “Well, sometime in the future — not 2015, as we said a week ago, but 2018, ’19, ’20 — perhaps there will be one or two that come in. But markets are changing. We really don’t know what’s going to happen, and we aspire to great things.” Can you imagine what would have happened if they’d told what is in fact the truth? Things have not changed since then. It’s simply the political context that has changed.

I was wondering about this question of credibility and how much people knew. When did they know about the reality, the people on the other side of the House? What did they actually know about the reality of what the potential was for LNG back when those bold, grandiose statements were made about wiping out the debt of British Columbia?

Well, I read a really interesting article that was written by David Broadland in March of 2014, before Bill 6 came out, saying that we would have a 3½ percent tax rate, along with a whole bunch of various loopholes. It was written back in March of 2014. I know you always have to be careful in terms of articles that you quote, but I’ll tell you, it’s a very detailed and very thoughtful piece of research by Focus Online, written by David Broadland, who is one of their researchers. I think he might be the executive director as well.

When it comes to research, certainly it has seemed to me, when we’re looking at research…. When you have the Fraser Institute or a piece of apologist research like the Ernst and Young report on compensation in municipalities coming out — flimsy evidence, poorly put together, shoddy research — those on the other side are absolutely willing, with smiles on their face and not a moment of apology, to present that research as if there was anything credible in it.

But I’ve always found that for those that represent anything of a progressive view, the research has to be impeccable, because the attacks will be unbelievable if every piece of evidence is not properly backed up. That was certainly my experience when I was a researcher for the Canadian Union of Public Employees. We had to make sure that every piece of evidence was backed up, absolutely credible and nailed down three or four times.

It’s certainly not true of Fraser Institute reports. It’s certainly not true of the Ernst and Young report that I referenced a couple of minutes….

Interjections.

K. Corrigan: It’s certainly not true of the Ernst and Young report, which was shoddy and which was done intentionally by government to interfere in local elections.

But I’d like to get back to Bill 6. In this Focus Online
[ Page 5205 ]
article the basic premise — and what the article shows, I believe — is, essentially, that the jobs claim, the 100,000 LNG jobs claim, was “based on dubious assumptions thrown together at the last minute for her 2013 throne speech.” Then the question was whether those civil servants were working for the public interest or whether there was indeed an intention that this was dedicated to the election campaign.

Interjections.

K. Corrigan: I think that perhaps some of the members on the other side…. It would do them good to get a more rounded view of LNG. Certainly, what they have all said over the last couple of years or year and a half is that it’s going to end all of our problems. It’s the answer to everything. I think just a little bit more balance — a little bit less trusting approach and a more balanced approach — might be useful to the members on the other side of the aisle.

[1610]

I’ll give you some examples of that report, which led us down the path to all these huge claims which are now having to be pulled back and are proving to be absolutely false, in fact.

After the government had delivered its election budget, it released two reports, according to this article, one authored by Grant Thornton and the other by Ernst and Young — of course, the company that we were just talking about, which did that fabulous report on compensation in municipalities. Those two reports “purported to validate the LNG revenue projections underpinning Clark’s prosperity fund.”

Remember the prosperity fund — the one that was going to provide billions and billions of dollars, the one that we don’t really hear about anymore but was promised in February of 2013 right before the election?

What were the job projections, and where did that come from in that report? That was the one that said it was going to be 100,000 jobs for B.C. families. I don’t really hear that anymore, but I understand the Premier is still saying 100,000 jobs. Maybe somebody should show the Premier the evidence and where we actually are now with the development of LNG in this province.

“After the election” — according to this article — “inquiries to the Ministry of Energy, Mines and Natural Gas about the LNG job figures used by Clark revealed that a third report, also by Grant Thornton, had provided the mathematical substance for the previously released studies of potential LNG revenues. But this report had been secreted away. There wasn’t a single reference to it in the B.C. media coverage of the election.”

They did manage to get a link from its hiding place, as this article describes it. They did some FOIs. They said it came from advisers, and they wondered about who those advisers are that had come up with those numbers.

One of the things they found is that the assumption for the B.C. ratio is that they compared with Australia and what was actually being achieved in Australia. In fact, this is the first problem with the numbers.

“The B.C. ratio is 36 percent higher than the Australian number. If B.C.’s significantly higher number had been adjusted to actually be comparable….” Poof — a third of the jobs, or 36 percent of the direct jobs that have been claimed, would have vanished.

“Another of those key assumptions,” according to this article…. Well, one of the key assumptions was that “a capital expenditure of $98 billion in B.C. would create the capacity to produce 82 megatonnes of LNG per year. That, too, seemed to be unreasonable.”

Australia Pacific, by way of comparison, “is a two-phase, $35 billion project expected to eventually produce 16 megatonnes annually. At that ratio of capacity per dollar of investment, the province’s assumed $98 billion would only create capacity for 45 megatonnes per year. Yet Grant Thornton accepted that $98 billion would build 82 megatonnes of capacity.”

There you go — poof. Half of the capacity would be gone if you took the Australia Pacific analysis — which they had used, by the way.

“Australia Pacific’s likely costs, by the way, are significantly lower than B.C.’s would be.” It’s building a shorter pipeline and is not relying on shale gas. “So the wells for Australia Pacific LNG are about one-third the cost of wells in northeast B.C.”

According to this article, “Grant Thornton’s estimation of long-term employment is also puzzling. According to an extensive study by KPMG of the $35 billion Australia Pacific project, ongoing operations of the LNG plant would employ 325, the pipeline 20 and the gas fields 520 jobs.”

[1615]

“Extrapolating from that example, a $98 billion project in B.C. would create 910 long-term operational jobs at LNG…56 pipeline jobs and 1,456 gas field extraction jobs. That’s direct, long-term employment.”

If the B.C. Stats multipliers are applied to these long-term employment figures, the total number of long-term jobs would rise to 21,000. That’s in a best-guess scenario. That’s certainly the best scenario.

As the article concludes, it’s very “difficult to see how Grant Thornton” — which the Premier relied on in her Speech from the Throne — “arrived at the conclusion $98 billion would bring 75,000 long-term, full-time jobs to the province.” But that’s what was promised to the people of B.C. and continues to be promised.

The article goes on to talk about the fact that they did a lot of FOI requests and found out that a lot of the information that was included was said to have come from the province and its advisers but, in fact, had came from proponents. As the article writers say, it’s disheartening. It says:

“How could the public interest be served in this taxpayer-funded exercise with transparency and accountability? Asking Encana, for example, for objective information about how many drilling jobs an LNG industry would create is like asking Goldman Sachs
[ Page 5206 ]
whether reducing regulation of investment banking would be good for the economy. By disguising the source of the information, the exercise became political.”

This is their conclusion: “As mentioned earlier, the numbers seem to have been manipulated, or fudged as British Columbians prefer to put it.” Their conclusion is that at the time the numbers were fudged. At the time the numbers were intentionally fudged. At the time the numbers were not believable. It raises real concerns about what was presented to the people of British Columbia and the fact, frankly, that the ministry staff were required to assist in this exercise.

We know, of course, the fallout from this is that we had promises that cannot be kept. We have promises with regard to greenhouse gas emissions that were not kept. It’s certainly not what was expected — a promise that you’re going to reduce greenhouse gas emissions, that you’re going to have a clean….

Well, maybe that promise wasn’t made. I actually should go back and look at that. Maybe there never was any promise that greenhouse gas emissions were going to be reduced. It may have been more weaselly words than that, because they did say the cleanest. In fact, what we know about the cleanest is that there is actually not going to be any reduction in greenhouse gas emissions.

We are left with great promises about the amount of money. We’re left with great promises about the number of jobs. We’re left with great promises that we are going to have a tax-free B.C. Those promises were made perhaps….

Interjection.

K. Corrigan: Oh, sorry. We’re going to have a debt-free B.C., not a tax-free B.C. Although, I mean, this government might as well promise a tax-free B.C., because these promises are pretty darn close to that — debt-free B.C.

One of the claims and the bases…. One of the things that was said is that the reason that we had to, in this bill…. Just back in February we had a suggestion. We were told that the LNG tax rate was going to be 7 percent. In fact, now we have a tax rate of 3.5 percent. In addition to that, we have major loopholes. We have major loopholes in this legislation. But we were told that the reason that we had to have a change was because the economic conditions had changed since February. I don’t believe that anybody believes that.

[1620]

In fact, we know from the article that I was just reading and from a lot of other data, from a lot of other research, that the promises that were made were overreaching, unrealistic, not based on real evidence and not based on any sense of reality in the first place. Just like that, part of the argument by government that economic conditions had changed since February — there’s no basis in reality for that either.

The reality is that many of the things that are being quoted now as reasons for the change in the tax scheme from 7 to 3.5 percent were things that had already happened. The public record shows that they should have known that their expectations were already unrealistic.

Let me give you a couple of examples of that. September 2012 Macquarie Bank wrote a report which doubted that even four LNG plants would be built in B.C. — predicting that B.C. would become an exporter but saying they doubted even four. What’s the reality now? We have proponents; we have proponents pulling out. So the talk about 18…. There were 18 proponents. But the talk of the grandiose that we’re going to have LNG plants everywhere — not quite working out that way.

The Macquarie Bank suggested that delays and cost overruns in emerging markets are all real threats that could undermine the economics of the projects. That’s not June of 2014. That’s not a week after the suggestions in the spring. That’s in September 2012, so the government should have known that things were not as rosy as they were saying at that time. In fact, that was before February of 2013, when the Premier made the great, sweeping promises about how LNG was going to solve all of our problems.

In February 2013 the B.C. government came out with its predictions for the prosperity fund, including that 100,000 jobs. That was based, as I said earlier, on the Grant Thornton econometric model provided by the province. Even that — I didn’t talk about this earlier — included an estimate with regard to jobs, where 30 indirect and induced jobs were created for every assumed direct job — 30 indirect and induced jobs. I don’t know where that came from.

By comparison, the U.S. House of Representatives’ bipartisan natural gas caucus estimated 3.5 indirect and induced jobs for every direct job in the U.S. gas industry. So I don’t know how it is that the pre-election report estimated ten times as many indirect and induced jobs for the industry compared to what the U.S. House of Representatives’ bipartisan natural gas caucus came up with.

April 2013 — again, long before the promise of a 7 percent tax rate — at an LNG conference in Vancouver global energy experts expressed their doubt about the credibility of Christy Clark’s optimism. They said Asian buyers won’t be paying the windfall prices that have been in place since Japan shut down 48 of its 50 nuclear power stations after Fukushima.

They said that Asian buyers will seek to decouple the price of gas from the price of oil and that B.C. will face stiff competition over prices, with new supply coming from Africa, the U.S. and Australia — April of 2013.

May of 2013 Citigroup warns that we will face increased supply competition after the U.S. Department of Energy approved 26 LNG export facility applications in Texas, on the U.S. Gulf of Mexico.

[1625]

October 2013, Canada West Foundation wrote a report titled Managing Expectations, assessing B.C.’s LNG industry. It said that Asia may soon have more than enough natural gas of its own, and B.C. will face competition from domestic production in China and from pipeline imports to China. The Minister of Natural Gas responded to the report by saying: “I don’t mind being accused of being an optimist.”

So we go from a promise in February of 2013, before the election, that we are going to have $1 trillion, that we’re going to have 100,000 jobs and that we’re going to wipe out debt in British Columbia, to an admission: “It doesn’t matter. The election is over. Whatever the validity of what we said, who cares whether there was truth in it or not. I’m an optimist. It doesn’t really matter now. I can say whatever I want.”

Say one thing that people want to hear, that you think will get you to win an election at one point, and then later when it turns out not to be appropriate or grounded in reality, say: “Yeah, whatever. I’m an optimist.”

There’s a credibility issue there. I wonder sometimes whether some of the members on the other side who aren’t privy to some of these changing sands, aren’t privy to the reality, feel duped by this government.

A. Weaver: I’ve been saying it for almost two years: British Columbia has been sold a bill of goods. The government describes their pipedream of LNG prosperity for one and all as a generational opportunity. Let’s be clear. The reality is that this legislation before us is a generational sellout.

In an election where the government was set to fail, a Hail Mary pass was thrown. That pass was the promise of an LNG windfall. It was packaged in a message of hope so compelling it couldn’t be ignored: 100,000 jobs, $1 trillion to the GDP, a $100,000 prosperity fund, the elimination of our provincial debt, the thriving schools and hospitals and, most of all, the end of our provincial sales tax.

As we all know, that pass was caught, and we now have a government that is desperate to deliver on its irresponsible political posturing. What we didn’t know until recently was just how far the government was willing to go to try and materialize its LNG pipedream. We had no idea how desperate the government was. We had no idea how costly it would be to give away our natural resources. Now we do, as sadly, those costs are coming to light.

We’re told we are going to “re-engineer B.C.’s education and apprenticeship systems.” You can’t make this stuff up. Orwellian messaging and actions that we’ve come to expect from the Harper Tories are now gushing forth from this government’s propaganda machine on a daily basis.

We’re being told that we need to dismantle our leadership in climate policy. In fact, perhaps the most ironic aspect of all of this is that those very same civil servants who put together B.C.’s revenue-neutral carbon tax legislation, a piece of legislation praised around the world, have been given the unenviable task of putting together the present tax legislation, which can only be regarded as a generational sellout.

Just today the government puts our Triple-A credit rating at risk in order to subsidize the LNG industry on the back of taxpayers and B.C. Hydro ratepayers.

Let me be very clear. British Columbia has a rich history of natural gas development. There was once a time when B.C. coffers were filled with royalties from this sector, but markets have changed. The revolution in horizontal fracking technology has created a glut of natural gas in the marketplace.

Today’s Henry Hub spot price for natural gas is just $3.60 per million Btu. That makes it uneconomical to extract natural gas from the dry-gas fields in the Horn River shales near Fort Nelson, B.C., which require a North American natural gas spot price of around $5 per million Btu to be economical. Sadly, it’s pretty quiet around Fort Nelson right now.

The only reason we are still maintaining a vibrant sector in the Montney Formation around Fort St. John is because of the value in the liquids — not the gas, which in many cases, I’m told, is simply pumped right back into the ground and capped, as there’s no market for it. These so-called condensates are important for mixing with bitumen in order to reduce its viscosity and, hence, allow diluted bitumen to flow in pipes.

[1630]

I understand why the government wants to search for a market for B.C. gas. There isn’t one in North America. But let’s take a look at this in more detail, at precisely what the government is doing.

On October 29, 2012, the Deputy Minister of Energy, Mines and Natural Gas made a presentation entitled B.C.’s Energy Future at the annual B.C. clean energy conference. The deputy minister outlined B.C.’s plan and its LNG price projections from 2012 well into the future.

Domestic prices were projected to increase linearly, a range from $3 per million Btu to about $7.50 per million Btu by the year 2035. Asian import prices for LNG were also projected to increase — from about $13 per million Btu in 2013 to about $17 per million Btu in 2035. In essence, the government was predicting a sustained and constant $10-per-million-Btu spread in the price of domestic versus Asian prices for natural gas.

That $10-per-million-Btu spread is critical, since it’s projected to cost about $6 to $8 per million Btu to get gas to Asia. If we drop much below that $10 spread, it’s not going to be economical for an LNG industry to get going in British Columbia.

For almost two years I have been saying the same thing, and consistently so. Canada has less than 1 percent of the world’s proven natural gas reserves. Russia has about 20 times as much natural gas as all of Canada combined — not only just B.C. but all of Canada — and they recent-
[ Page 5208 ]
ly signed 30-year agreements to provide natural gas to China. That’s why their most recent agreements came in at the $9 to $10 per million Btu mark. That’s equivalent to a $5 to $6 spread from the Henry Hub price.

Australia has similar-sized shale gas reserves as Canada and is much farther ahead in the development of its LNG industry. The United States has more than twice the shale gas reserves as Canada, and the U.S. government recently decided to allow natural gas exports. The U.S. already has some of the necessary infrastructure in place on their coastline to facilitate a relatively quick development of an LNG export industry. China could soon be well positioned to take advantage of its own natural gas reserves, which are three times those of Canada.

The reality is that we are simply not competitive at this time. That doesn’t mean we won’t be at some point in the future. Let the market decide when that will be. The role of government is to ensure that externalities are internalized so that certainty exists for industry moving forward.

In this case we are doing the exact opposite. What we are doing is externalizing internalities on the taxpayer and future generations. Government has the audacity, the arrogance, the hubris, to call it itself business-friendly.

Rather than acting like a pack of cheerleaders, the members opposite should be posing the difficult questions and proposing innovative solutions to create a diversified, sustainable 21st-century economy. There is a disappointing lack of critical analysis on the benches across from me. Perhaps those members who cheer the loudest are trying to win favour with the Premier so that they might climb into the inner chamber of the LNG house of cards.

Six years ago our province took a bold step forward. Government, industry leaders and academics, as well as First Nations, came together to map out a new path for our province, one predicated on the notion that strong economic growth can and must go in hand with a sustainable environment. We accepted the undeniable truth that as long as we fail to address global warming, we are failing future generations, for we will be burdening them with the economic, social and environmental costs of our actions today.

Since we took that bold step in 2008, we’ve seen our economy outperform the Canadian average. We’ve seen up-and-coming industries like the technology sector become the second-largest contributor to private sector growth, supplying 84,000 jobs for British Columbians and revenues of $18 billion a year. We’ve seen mining output and exports double in the last ten years, and we’ve seen more than $18 billion added to our provincial GDP.

We did all this while reducing our carbon emissions by over 4 percent from 2007 to 2012. In fact, published studies have clearly concluded that the 2008 and subsequent climate policies have successfully reduced carbon emissions while still supporting economic growth.

In 2008 our province boldly strolled down a path that was grounded in real leadership and prosperous economic growth. That vision and those policies are being dismantled with this legislation that is now before the House. The fact is that this whole situation comes down to an absence of real leadership.

[1635]

All of us in this room were elected to lead, yet real leadership demands of us the integrity to acknowledge what we all know: that this bill was developed in the context of unspoken yet profound constraints that were imposed by overhyped election promises. In catching their Hail Mary pass, the B.C. Liberal government gave itself the impossible task of delivering on a promise that was never grounded in any realistic expectations or in sound economics.

How can a government ever deliver on the LNG windfall when the economics simply are not there? The answer, of course, is that they can’t. Instead, the government is selling out our future generation with bills like this one, in an effort to appease public expectations. They know, as we all do, that they cannot walk into the next election without having landed at least one LNG plant. Instead of coming clean and being accountable for their actions, the Liberal government is tabling bills like this one, which amounts to nothing more than a generational sellout.

Mark my words. When the B.C. Liberals look back, in 2016, they’ll tell future voters that the economics have changed, that their promises were reasonable until the LNG bubble burst. They will argue in defence that B.C. has one or two extremely small LNG plants in the works, and dozens of companies are still interested, and there will be hundreds of thousands of jobs, and there will be a $1 trillion hit to the GDP when this prosperity is realized “once you elect us back in.”

They will say: “It wasn’t our fault.” They will proclaim that other market measures came to be, to make LNG not a reality in time for this election. But as I’ve pointed out — and I have done so for the last two years: the economics wasn’t there before, it isn’t there now, and it won’t be there for a few years to come. And this hyperbole does not serve the interests of British Columbians at all.

The truth, of course, is that we have known all along that the economics would change, yet because our government is unwilling to show leadership and admit this, the challenge of delivering on their unfounded promise and the constraints that come with having to at least deliver something was passed on to our poor civil servants, who I believe have done their best with a near-impossible task.

Indeed, much of the structure of this legislation is quite brilliant. Many of the technical details have been well-thought-out, and I must actually commend the civil servants who’ve drafted the legislation for doing a very fine job in light of the impossible situation in which they were placed.

That being said, the major problems with this bill aren’t in what the civil servants have done with it; they’re in the politics that led to it, the politics that continue and the politics that will take us into the 2017 election.
[ Page 5209 ]

We cannot consider the LNG tax regime in isolation. It must be considered in the context of Bill 2, the Greenhouse Gas Industrial Reporting and Control Act. That is because, together, Bills 2 and 6 help form an economic playing field for LNG companies. While Bill 6 enshrines the tax regime by which B.C.’s revenue sources are determined, Bill 2 enshrines the loopholes through which companies will jump to avoid ever having to cover the full economic costs of their carbon emissions. We cannot ignore that fact in this debate.

There are clear economic costs that come with not addressing global warming. They are the untold debt that is conveniently, for our government, left out of our accounting books. But those costs will indeed be borne by future generations if those of us here today fail to act in a responsible manner.

Here’s just one example. The former governor of the Bank of Canada and now governor of Bank of England said just over two weeks ago that the vast majority of oil and gas reserves are unburnable if we wish to avoid the most profound consequences of global warming. He and many others have pointed out that valuations of major energy companies focused only on fossil fuels are potentially overinflated, since their unburnable reserves should be viewed as stranded assets.

Yet in B.C. what do we do? We chase a falling market, through mortgaging our future and incurring ever-increasing amounts of generational debt.

I’ve said before that the economics aren’t there and have never been there. For an LNG industry to thrive in B.C. at this time, the truth of this statement and of the government’s LNG hype is perhaps best illustrated with the proposed LNG tax rate.

With the introduction of this bill, we saw the government cut this rate from 7 percent to 3½ percent, throwing out vague statements like: “Well, market conditions have changed since we brought it in.” In doing so, they’ve cut the projected revenue that British Columbians will receive from the LNG income tax by nearly half — if they receive anything, ever, at all.

[1640]

Why is the government making this shift from 7 to 3½ percent now? According to the government, it’s because LNG economics have changed. Among other things, they cite an increasing global LNG supply due to competition and a decrease in LNG demand — since China now has a natural gas supply agreement with Russia, and Japan is considering restarting its nuclear power program.

I was absolutely dumbfounded when I read this. I don’t know what the government has been up to, but I’ve been saying the same thing for two years. Frankly, it’s irresponsible for the government to be saying this now. I wonder where they’ve been for the last two years — including reading a recent Peters and Co. report that estimates that while LNG demand will increase to more than 500 million tonnes per annum by 2030, LNG supply will reach 800 million tonnes per annum by that time.

Why should we be surprised at this? When we witness Russia sign a $400 billion 30-year agreement with China, we should not be surprised. When we see the U.S. Gulf Coast become the most efficient place in America to build LNG plants and Japan to sign long-term contracts with U.S. suppliers at rates far below expectations in B.C., we should not be surprised. The supply gap is too narrow, and Russia, the United States, Australia, Malaysia and Qatar are places that already have an export industry. They’ll be able to fill the gap long before we can even get gas out of the ground and into ships.

None of this is new. Where has the government been for the last two years as everybody in the energy industry, academics and universities and at least one politician in this building have realized all along that this is nothing but a pipedream and B.C. has become the laughingstock of those in the Alberta oil and gas industry because of its approach in this regard? I say that after talking to people from within that industry.

Why is the government continuing to claim that LNG economics are the reason for its sudden decision to cut the proposed LNG income tax rate in half? If this was indeed a surprise for government, then where was it getting its data from before?

I find it concerning that it appears that the government is either only analyzing these strengths now, years after the fact, or that they’ve known about these trends for years, as I and many others have — including those in the Alberta oil and gas industry, which I would be most delighted to trot out in front of the Legislature here, given permission, to say exactly the same thing that I have been saying and this irresponsible government has ignored for the last two years.

Instead, they’ve chosen to pull the wool over British Columbians’ eyes about why they’re changing the rate now. Irresponsible, shameful and not what we in British Columbia expect from a government that’s supposed to be truthful to the people of British Columbia.

Here’s another problem. The government has said over and over that it was necessary to lower the LNG income tax in order to keep B.C. competitive. Surely in arriving at that determination, the government would have completed economic projections, both in terms of revenue to the province and in terms of costs to the companies, for the various tax levels they considered. Yet I haven’t seen any of these. I’m sure the members beside me haven’t seen any of these.

What precisely is the government making their decisions on? Where are the revenue projections that lead the government to conclude that the lower tax rate would still provide British Columbians with a fair return on their resources? Is it because Shell told them so? Is it because Buddy down the street in the coffee house told them so? Not the oil and gas reps that I’ve talked to. They certainly don’t know where that’s coming from.
[ Page 5210 ]

Has government made these projections? If so, where are they? If not, then why not? Without conducting realistic revenue projections, how can the government or we as members of this Legislature properly evaluate the validity of this tax regime? The reality is we can’t, and frankly, it’s irresponsible to proceed without this information.

Furthermore, because we don’t have this information, we also don’t have any realistic projections of how long it will take companies to pay off their net operating loss account and capital investment account balances. We therefore have no basis to determine how long the 1.5 percent tax rate will apply for or when the 3.5 percent tax rate will even ever kick in. These are impacts that we need to know if the government is going to make policy decisions grounded in evidence and analysis.

What about the corporate income tax rate? Of course, this isn’t the only tax cut proposed in this legislation. I’m referring here to the natural gas credit towards the B.C. corporate income tax. Under this legislation, LNG companies will receive a tax credit equal to a half percent of the cost of natural gas owned by the LNG taxpayer at the LNG facility inlet, which can then be used to cut their B.C. corporate income tax rate from 11 percent to 8 percent.

I have several concerns about this. First, of course, is back to my previous point. We’ve been given no projections of the impact of this tax break. We have no idea what it will have on revenue, and presumably, of course, the purpose of this tax break is to attract LNG companies to set up headquarters here in B.C. Yet we already have some of the lowest corporate tax rates in Canada, and Canada has some of the lowest corporate tax rates in the world. Presumably, there must be some reason for this. Presumably, we already have competitive rates.

[1645]

What’s being added by this? Why is the government doing this? Where are the revenue projections? Are there reliable projections on the impact that this will have? Will companies actually relocate because of this? And if so, what impact will that have on our revenue projections? Are these impacts worth the race to the bottom on corporate income taxes that we are engaging in with other jurisdictions that are also competing for those same headquarters?

Again, I find it concerning that I have not seen any analysis from the government as to the projected impacts of this reduction. To be perfectly blunt, I get the sense that the government is just making it up as they go along.

Meanwhile, this corporate tax break also begs the question: why is the government favouring one industry over others? This tax break for LNG industry puts the government’s LNG ambitions ahead of such things as film, tourism, high-tech, forestry, fishing and many other industries which are already here now. It puts a hypothetical fossil fuel industry, with its future stranded assets, ahead of existing 21st-century industries that are already employing many, many more British Columbians and provide realistic hope for future growth.

Are we so desperate to attract LNG producers that we are willing to leave industries that are already thriving in our province and that already show promise for future prosperity? Are we just going to just throw them by the wayside? If we want to support economic growth through tax policy, why not instead explore measures of further growing these existing industries that have shown success in our province?

Let’s build on our demonstrated strengths and the jobs they provide for British Columbians, not a pipedream that clearly won’t do much for the B.C. economy for several decades to come.

Of course, leaving aside the values question of whether we should be sacrificing so much to try to materialize an LNG industry, all of these issues ultimately come down to the basic question. Where is that line at which B.C. actually becomes competitive with other jurisdictions, and have we actually hit that line?

Will these tax cuts actually make us that much more competitive to the point that LNG companies would have walked away without them but will now be drawn to B.C. with them? Without the full information, it’s hard to answer these questions, since there is much more to the calculation than simply respective tax rates.

Let me offer one specific example. Regulatory filings show that the Pacific NorthWest LNG and LNG Canada projects would each likely cost up to $15 billion to build, which would translate roughly to about $1,200 per metric tonne capacity. In contrast, the Cameron LNG project on the U.S. Gulf Coast could take advantage of an existing import facility and would only cost about $7 billion to complete, which is roughly equivalent to $600 per metric tonne capacity.

Several Asian buyers including Japan, which recently signed contracts, South Korea, India and Indonesia have acknowledged that because of this, the U.S. is likely the most efficient place in North America to build LNG export facilities and have already committed to long-term contracts with the U.S. as a consequence, starting in 2016.

The reality is that the widening of the Isthmus of Panama should open sometime at the end of next year, allowing bigger ships to come into the Gulf ports to pick up LNG at a cheaper price.

Unfortunately, we have no actual revenue projections, again, that we can use as a basis for evaluating whether the tax cuts we are offering are necessary to close the competitive gap with jurisdictions like the U.S that have these added advantages. Instead, we’re being asked, simply based on trust, to take the government at its word that they got it right.

Based on what has become a train wreck of unfulfilled promises, it’s hard for me to do so. Without revenue projections, we cannot make an informed decision on the
[ Page 5211 ]
values question of whether we should be making these sacrifices in the hope that an LNG industry will somehow materialize.

Here’s one of the most egregious aspects of this bill. We’re actually paying firms to clean up their own mess, and my concerns don’t end there, for example. Not only does this legislation lay out a path to give away our natural resources through a series of tax cuts and breaks, it also goes so far as to provide a tax credit to companies when they finally clean up their mess — a mess they made over the course of their operations.

Under this legislation, a company would receive a 5 percent tax break relating to the costs of reclamation, remediation and restoration of an LNG facility site. I mean, it should go without saying that LNG companies have a responsibility to restore, reclaim and remediate their sites. This should be a cost of doing business, not something that a company gets a pat on the back for and a cheque in their pocket for doing sometime hypothetically down the road.

[1650]

I find it, again, deeply concerning that the government is passing some of these costs on to British Columbians through this tax credit. It’s the opposite of polluter pays. It’s polluter gets paid.

If we are so concerned that these companies are going to pack up and leave B.C. with a hazardous mess to clean up, why don’t we mandate that these costs be covered as upfront criteria for doing business in B.C.?

As a final point, I’m concerned about an inconsistency in this bill with respect to taxing emissions reductions initiative from Bill 2. Under Bill 2, as an initiative to reduce their emissions intensity, the government is proposing to tax LNG companies for not meeting the emissions intensity benchmark of 0.16 metric tonnes of carbon dioxide equivalent per tonne of LNG produced. Mind you, that’s only on the upstream component.

Those taxes count as lost revenue. On the other hand, LNG producers would also be empowered to sell emissions credits that they receive for reducing their emissions below the 0.16 benchmark. This doesn’t make any sense. On the face of it, it might. It might seem like a good way to motivate firms to reduce their greenhouse gas emissions intensity. However, there’s a troubling inconsistency in how this policy is applied.

Under Bill 6, producers can count the costs of buying emissions credits as lost revenue and, hence, reduce their LNG income tax amount. However, when producers make revenue from selling the credits they receive for reducing their emissions intensity below 0.16 — that benchmark — that revenue is exempt from taxation. In other words, the government is letting the industry have its cake and eat it too, and it’s doing so on the backs of British Columbian taxpayers, who buy the ingredients, prepare the cake and pass it along to the industry.

In conclusion, I cannot help wondering why we aren’t talking — instead of about a regressive tax regime that essentially gives British Columbia’s assets for nothing to companies afar and puts the debt on future generations — about and supporting a diversified 21st-century sustainable economy. We could be debating legislation that would support a range of industries that provide local, well-paying and sustainable employment opportunities over the long term instead of tying our job and our children’s jobs to the boom and bust cycle of fossil fuel industries.

We should instead be looking at the long-term growth in new and up-and-coming industries. Rather than relying on a single industry in one part of the province to provide prosperity — hopeful prosperity, dreamful prosperity — for British Columbia’s future, we could show real leadership and take steps today to develop the diversity of opportunities that exist across the province and to prepare our youth for employment in industries that are already characterized by high growth, such as the clean and high-tech sectors, the film sector, the tourism sector, the forestry sector, the fishing sector. And I could go on and on.

This vision certainly includes innovation in how we develop and use our natural resources, but not in a bubble. Rather, it’s as part of a diversified and sustainable economy. It goes without saying that we must enact policies to ensure that British Columbians benefit from resource extraction when and where that extraction is appropriate.

But this tax regime instead lays out a means to give away our province’s resources in order to land an irresponsible, political promise filled with hyperbole, slack of substance and void of information and detail.

As we continue to debate the role LNG might play in our economy, let us not forget the real economic opportunities of the future and that they lie in fostering long-term sustainable growth in our economy, growth that transitions us to a low-carbon economy. Let’s take that challenge seriously and develop a 21st-century economy for British Columbia. That economy may indeed have a place for a revitalized gas industry in B.C.

If I can leave one message with government, ultimately, it is this. That revitalized gas industry should arise if the market determines it is time for it to do so, not because the government hopes it is time for it to do so. That is a critical aspect of the flaw of this piece of legislation. The government is interfering with the market.

[1655]

The government has decided that it knows best, that the market for LNG is here and now, and it’s now trying to interfere with the market. Instead of doing what it should do, what it’s tasked to do, which is to internalize externalities and ensure that the market is regulated, they are externalizing internalities and putting those, and that burden, on this present generation, and tomorrow’s generation as well.

We will look back in British Columbia a few years
[ Page 5212 ]
hence and realize that this is a defining time in our province, a province that used to be known as an innovative leader in the technology of today and tomorrow.

Instead, what we have done is we’ve taken a card from the regressive approach of Harper Tory politics, which has a base in the Alberta oil sands industry. “Come hell or high water, get the resource out of the ground and sell it afar. Throw a party today with the resources that we can extract and the money we can take from today’s resource-selling. Let’s not worry about tomorrow.”

Let’s look at places around the world and the prosperity funds they have and ask the question: what is the prosperity fund that Canada has from all of the extraction of its oil and gas wealth over many, many decades? The answer is very simple: it is a big fat goose egg.

British Columbia, through this legislation, has aligned itself with the federal government, and we, too, in British Columbia can expect this same big fat goose egg as a legacy for the irresponsible tax regime, the irresponsible policies and the irresponsible government we have here trying to force this LNG on a market that’s not ready for it.

S. Robinson: I am pleased to take my place in the debate on Bill 6, the LNG Income Tax Act. I’d like to get it on the record that I, along with my colleagues on this side of the House, support the development of an LNG industry here in British Columbia. It’s an industry that’s been coming to B.C. for quite a long time, and on this side of the House we do welcome its development. In fact, we welcome quite a diversified economy.

The member that just recently spoke certainly spoke about an economy that I want to talk about — an economy that’s diverse and recognizes the wealth of this province, an economy that includes mining, forestry, high-tech, fishing, agriculture, tourism.

We welcome, on this side of the House, and say yes to green technologies and to the creative sector. We also say yes to research and innovation because on this side of the House we recognize that a diverse economy is a resilient economy. On this side of the House, where we recognize that climate change is real, we know that we need to be adaptable and to be able to adjust to new climate realities as they unfold. We know and believe that the more diverse our economy, the more resilient British Columbians will be.

I kind of liken this to the consultation that I will get from my investment adviser, who’s really clear with me because I’m, by nature, a little bit risk-averse. His advice to me is that I need to have an investment portfolio that is diverse so that I can weather the economic challenges that lie ahead — challenges that are often unpredictable — and diversity is part of that scheme.

Does LNG add to our diversity? Absolutely. It’s for this reason that I and my colleagues welcome its development. I suppose I do want to stand here and — wait for it; I know everyone’s waiting for this — commend the government for actually bringing forward legislation for debate.

We need to be talking about this. It’s time, actually, through this debate and discourse, that we had an honest conversation about what this industry really means to the British Columbia economy. It’s time for us to have an honest debate, an honest discussion that’s grounded in reality and what is realistically possible.

The proponents of this industry have been waiting some time to see what the government would bring forward. The proponents deserve to know what the lay of the land looks like when it comes to how this asset, an asset that belongs to all British Columbians, will be taxed.

The communities that are most likely to directly benefit have been waiting patiently as speculators have come to their communities to get ready for possible investment. Communities like Prince Rupert and Kitimat have been waiting, and the speculators have been making life difficult in these communities as they’ve sucked up all of the housing and made it very difficult for those who live there and make their life there to fully participate. I think it’s time for us to move this forward.

[1700]

The member for Peace River South — yesterday, I think — pointed to this side of the House, saying that on this side we don’t have a plan. He and, I know, some of his colleagues are running around this place crowing as if they really do have something to crow about, but that’s really not quite accurate. We do have a plan. Our plan for developing this industry would not be to offer up jobs to temporary foreign workers, people who have no path to citizenship here in British Columbia. Our plan includes jobs for British Columbians, jobs that rightfully ought to be serving our children and our grandchildren, our new immigrants and our First Nations.

Our plan is to be honest with British Columbians about what an honest and reasonable expectation would be of this industry. Our plan during this debate is to remind this government of the promises it made to British Columbians — that, we on this side of the House knew, was full of empty promises and exaggerated opportunities.

[M. Dalton in the chair.]

Our job and our plan as the official opposition is to hold this government to account and make sure that they do their job to deliver to British Columbians what they promised to deliver. To demonstrate that it isn’t just the opposition playing it up, I thought I would review a little bit about what the media has been saying about the commitments that this Premier and her Liberal government have been promising to British Columbians for a year and a half. I’ve done a little bit of research.

April 18, 2013, the Beacon BC News. This is just a month before the election. “The export of LNG is worth $30 trillion
[ Page 5213 ]
in economic growth over 30 years, the Premier said at a campaign stop. …the Premier told hardhat-wearing workers at Langley Concrete in Chilliwack, one example of a business she said that would directly benefit from LNG development.”

In the B.C. government’s throne speech that February the Premier announced a new prosperity fund that would accumulate $100 billion to $260 billion in revenue from LNG royalties and business taxes. That, she said at the time, was enough to wipe out the province’s current debt — because, of course, at the time it was only $56 billion; it’s higher now — and it would eliminate the need for provincial sales tax.

Then, in June 2013, this one is from the Globe and Mail. “The Premier’s LNG strategy, announced in February of last year” — so that would have been February of 2012 — “was the mainstay of her recent election campaign. It calls for three LNG plants to be up and running by 2020. The province has said that LNG projects are expected to produce a trillion dollars in economic activity over the next 30 years.”

Then we have another one from the Globe and Mail this past February. This is from Justine Hunter, and she notes: “The Finance Minister will reveal in his provincial budget how his government intends to extract enough revenue from the liquid natural gas industry to retire the provincial debt, currently $56 billion and growing.” The story goes on to note that the first LNG dollar isn’t expected to flow into the treasury until the year 2017.

The B.C. Liberals are banking on a string of LNG plants opening up along the coast, with at least three on line by 2020. The Premier promised on the eve of the May 2013 provincial election that the Liberals would establish a prosperity fund to collect LNG revenues and that the fund would collect up to $100 billion over the next 30 years. The platform promised that the fund would be used to eliminate not just the direct provincial debt, $56 billion at the time and climbing, but also debt for Crown corporations, including B.C. Ferries and B.C. Hydro.

Now we have the CBC News posting of October 5, 2014. Now we start to see things change a little bit. “The fact that the Premier’s government is having a fall session this year suggests the importance of the subject matter which has become very singular, an almost singular focus of late,” is the quote. “The talk was the cornerstone of the last election campaign, with its promises of a debt-free B.C. as a result of hundreds of billions of dollars in potential revenue from the emerging industry.”

[1705]

The Times Colonist, October 8 of this year. We see again that things are starting to shift a little bit. “Liquefied natural gas, the big, shiny bauble that the Premier dangled before voters in the 2013 election, doesn’t appear to be so big and so shiny now. In fact, that bauble is looking more like a bubble, with Malaysian energy company Petronas holding a sharp pin.”

It goes on to note that the Premier “has consistently pursued the LNG dream, promising that B.C.’s natural gas will bring prosperity to the province. The industry represents a trillion-dollar economic opportunity, she has said, that will create 100,000 new jobs and the B.C. prosperity fund, allowing B.C. to erase its debt.”

In the throne speech, which was the beginning of October of this year, the Premier’s “trumpeting of LNG was notably muted,” says the editorial. No mention of job numbers, and no mention of dollar figures. In fact, the editorial goes on, the Premier notes that “Petronas is just one of 15 potential investors that the province is courting,” but there are really no details at all.

As we move along, on October 21 we have the Vancouver Sun. The headline reads “Debt-Free B.C. May Come Later Than Planned, Liberals Admit.” Here we have B.C.’s Finance Minister in this article. He admits…

“It may take at least a decade longer for his government to fulfil his big-ticket election promise of a liquid natural gas prosperity fund that will pay off the province’s debt. Instead, he said the government’s revenue forecasts for LNG, while still substantial, are declining in the face of reduced global LNG prices, changing demand in Asia and a new B.C. tax regime that cuts in half the future LNG tax rate.”

The Premier “had promised voters the massive economic windfall from an LNG industry that would fill the newly created fund with a minimum of $100 billion over 30 years” — here again, in this article, it says — “allowing B.C. to erase its provincial debt, which is now climbing from $56 billion to $61 billion.” Not so likely to happen.

The minister is quoted as saying: “If it takes an extra ten or 15 years to pay down to the extent we’d like or eliminate the provincial debt as the result of these adjusted market conditions or figures, I’ll take that criticism.” On the one hand, we have, a year and a half ago, saying: “It’s going to be so fantabulous, fantastic, just glorious. Elect us.” They get elected, and now they’re prepared to take some criticism, that they just can’t deliver.

Then we have another article, this one from Renee Filippone from CBC News, describing what we have before us in the bill. In the article they note that “the rate will rise to 3½ percent after four years, where it will remain for another 20 years, when a final rate increase to 5 percent will be instituted in 2037.” I did the math. I’ll be 73 years old. I’ll be as old as my dad. That’s a pretty long time to wait. Sorry, Dad. I didn’t mean to offend you, but that’s a long time to wait.

What does the Minister of Finance have to say about that? Well, what he says is that it’s a significant reduction in projected revenue for the province. He notes that the province…. The article goes on to talk about: “Under the original 7 percent tax regime that was first floated, the province was touting that a medium-sized LNG facility would have brought in $1.5 billion in tax revenue over ten years. Under today’s revised bill, that number changes dramatically to about $800 million.”

I suppose it’s better than nothing, but it reminds me of a recent experience I had — and if the hon. Speaker
[ Page 5214 ]
will just bear with me with this example. I have a very small foot, a size 5, and when I go into a shoe store I say: “Listen, I have a size 5 foot. Do you have any shoes that will fit me?” They say: “Well, no, but I have a size 6.” Well, that just doesn’t cut it.

When you say to British Columbians, “We’re going to generate $1.5 billion in tax revenue for ten years,” and then all you have to offer them is $800 million, it just falls short. It just falls short. It’s another example of saying one thing and doing another.

[1710]

The Edmonton Journal had something to say a couple of weeks ago about LNG here in British Columbia. What they write is that the B.C. government “surprised almost no one Tuesday by agreeing to slash tax rates on the province’s yet-unborn liquefied natural gas industry.” They note: “If the province didn’t cut proposed tax rates on new LNG plants, there would be no plants and, thus, no B.C. LNG industry.” That was pretty obvious.

“Even now, after cutting B.C.’s proposed LNG income tax rate in half, to just 3½ percent from an initially planned 7 percent, once project-related capital costs are recovered,” this author goes on to note, “the industry’s economics remain dicey at best.” They go on to say that if you add it all up, it’s not a particularly bright picture, which is why analysts say B.C. will be lucky to land one or two LNG projects at best — not the five plants that the Premier and her government have promised.

Moving right along, October 21. This isn’t just the NDP saying this. This is what is out there. This is what our media, different media, are saying about the government’s plans and this bill in particular.

In the Globe and Mail Justine Hunter and Brent Jang have some things to say, October 21. They note that B.C. “has vastly scaled back its expectations for its anticipated LNG riches, in sharp contrast to the political high hopes for the province’s fledgling LNG industry” that they touted so much during last year’s election campaign. The B.C. Liberal government introduced legislation slashing proposed rates for an LNG income tax and adds tax incentives for LNG companies, “meaning the province is now banking on a smaller flow of revenue.”

“During the election campaign,” they go on to note, “in the spring of 2013 the B.C. Liberals touted a plan to retire the provincial debt with a ‘prosperity fund.’” It’s not just us making this up. This is stuff that’s out there. It was at the time touted that this prosperity fund “would begin collecting revenue from LNG by 2017.” The campaign platform stated that the fund would reap as much as $100 billion over 30 years. But the Finance Minister is now vague about whether there would be such a lucrative fund at all.”

Moving along to just before Halloween, last week. These are perhaps, in some ways, some of the most alarming comments. On October 29 the CBC news reported on a story coming out of the Times of India economic pages. In this article they note: “The Premier reportedly told the gathering of potential domestic investors in New Delhi two weeks ago that B.C. can help India with its skilled worker shortage.” The promise she made: “If we can help train 3,000 and 300 of them help us build an LNG industry, it’s good for you, and it’s good for us.”

Here we have a Premier who is going out to India and inviting people there to work in an industry, after committing, promising 100,000 jobs to British Columbians — 100,000 jobs that we now know are not likely to materialize.

Finally, a more recent Globe and Mail article that comes from Sunday, November 2. In this article the author writes: “There have been 18 B.C. LNG projects proposed so far, though industry observers say only four, at most, will come to fruition.” The B.C. Finance Minister tabled his bill that “would put an LNG income tax rate of 3.5 percent on net income once LNG export terminals recover capital costs. The latest plan came after B.C. LNG players balked at the government’s proposal in provincial budget last February to impose a tax rate of up to 7 percent.”

As opposition, our job is to hold this government accountable to its promises to British Columbians. We are standing in this House and asking: what happened to that prosperity fund? What happened to eliminating the debt? What happened to the 100,000 jobs for British Columbians?

[1715]

Saying one thing and delivering another is what we’ve been hearing this entire time about the LNG industry. This government has been saying what it needed to get elected, and then it’s delivering something else. This bill is the something else.

I want to talk a little bit about those 100,000 jobs, because I’m the parent of two 20-somethings, and this is an issue that’s near and dear to my heart as a parent. I’ve also spent the better part of my career, before I got elected, working with people in my community who were challenged to feed their children without the support of a food bank.

I want to see my children benefit from these jobs that this government has promised. I want to see their friends benefit from the jobs that this government has promised. I want to see First Nations benefit from the jobs that this government has promised. And I want to see the people in Coquitlam-Maillardville benefit from the jobs this government has promised.

When the Premier goes off gallivanting to India and promises to train people there to come here to work in British Columbia, I have to give my head a shake. We have people here in British Columbia who struggle to get enough hours on the job to get their Red Seal tickets. We have plenty of people here in British Columbia. Why would our Premier — the person representing British Columbians; the person representing our children; the
[ Page 5215 ]
person representing First Nations; the person representing new immigrants, who are often underemployed — go elsewhere to promise jobs to temporary foreign workers?

We want those jobs for British Columbians, B.C. workers. We want our young people and those in transition to be able to get the training they need to access those well-paying jobs. We want First Nations, women, old people, young people, those going through a career change, British Columbians for whom English is not their first language. We want all of those people to be first in line for whatever jobs come forward from any investments made in LNG.

On this side of the House we will support projects that include an express agreement, a guarantee for jobs and training opportunities for British Columbians. When the Premier goes to Ottawa and advocates for more foreign workers who can fill these jobs, I have to wonder who she really cares about. Is it the corporations who are looking for cheap labour? What happened to caring for British Columbians? What happened to families first?

It’s pretty amazing when we have the Minister of Natural Gas mix up refugees, students, provincial nominees and call them all temporary foreign workers. I call that obfuscation or smoke and mirrors. If we throw all of these categories into the mix and call the opposition racist or suggest somehow that on this side of the House we’re anti-immigration, then it can distract from the real issue. The real issue here is that we have a Premier who is making promises all over the place and is leaving ministers and her caucus colleagues to pick up the pieces.

I believe that the Minister of Natural Gas does know the difference between all of these programs. He knows exactly what the temporary foreign worker program is. He understands the temporary part of the temporary foreign worker program is just that — temporary. He also understands that this is not a path to citizenship, as these other programs might be. This is, I believe, a Liberal strategy: say what you want; do what you want; throw everything into the mix to confuse and disorient.

When we have a government that makes these grand promises before an election of 100,000 jobs, a prosperity fund, debt-free, and then they can’t deliver, you wind up with an opposition that says: “Hey, where’s that stuff you promised?” We have a bill here before us that just ain’t going to deliver on that. So here we are, pointing out that this Liberal government says all kinds of things, makes all kind of promises, and when the rubber hits the road, they just can’t deliver.

We started with a 7 percent outer-limit proposal just in February, and it was halved just a few months later. The rationale? The rationale is that the LNG economic conditions have changed since February. They haven’t changed. The economic conditions have been there all along. The evidence that there would be competition and pressure to deliver a realistic, grounded-in-reality tax bill has always been there. If this is a surprise to this government, then they really have no idea what they’re doing.

[1720]

What evidence do we have? In September 2012 the Macquarie Bank wrote a report that doubted that even four LNG plants would be built in B.C. They predicted that B.C. will become an LNG exporter by 2020, but they also suggested that delays, cost overruns and emerging markets were real threats that could undermine the economics of these projects. That was a long time ago.

In February 2013, when the government first started talking about the prosperity fund, including the 100,000 jobs, there was a report by Grant Thornton that used an econometric model provided by the province that produced an estimate — this is very interesting — where 30 indirect and induced jobs were created for each assumed direct job. However, in the U.S. their House of Representatives used a different estimate of 3½ indirect and induced jobs for every direct job in the U.S. gas industry. So we have this disparity on how you actually do this calculation. It feels like the reality was there, but the notion of 100,000 jobs just felt like the right thing to say.

Then in April 2013, at an LNG conference in Vancouver, global energy experts were doubting the credibility of the Premier’s optimism. They were saying that Asian buyers won’t be paying the windfall prices that have been in place since Japan shut down almost all of its nuclear power stations after the Fukushima disaster. They noted that Asian buyers will seek to decouple the price of gas from the price of oil and that B.C. will face stiff competition over prices with new supply coming from Africa, the U.S. and Australia. Sounds like there was evidence at that time.

The following month, May 2013, Citigroup warned that we will face increased supply competition after the U.S. Department of Energy approved 26 LNG export facility applications in Texas on the U.S. Gulf of Mexico. Another piece of evidence available for all the members to read about and learn about as they were moving forward with their LNG plans.

In October of 2013 Canada West Foundation wrote a report assessing B.C.’s LNG industry. What were they saying? They were saying that Asia may soon have more than enough natural gas of its own. They were saying that B.C. will face competition from domestic production in China and from pipeline imports to China.

What was the minister saying? “I don’t mind being accused of being an optimist.” Well, his optimism has led us down the yellow brick road, and now we’re in the land of Oz. Now they’ve had to click their heels three times, and reality has struck. Reality is that there is no prosperity fund. There is no debt-free B.C., and British Columbians have been fooled into believing that.

In April 2014 the Japanese government revised its energy plan and indicated that it would be restarting its nuclear power plants once they clear new safety standards. Well, there goes that market. They were warned, but there goes that market.
[ Page 5216 ]

What else do we have here? We actually have quotes. So if the government wasn’t interested in doing that kind of research, there are a few quotes here that were just in our local media. That should have been enough — just reading some of our…. A Vancouver Sun article, April 4, 2013. They note:

“British Columbia could generate long-term profits by exporting liquid natural gas to Asia, but current government predictions for the value of the sector are too optimistic, according to global energy experts gathered this week in Vancouver. Delegates to an Asia Pacific Foundation energy summit heard that the current price for natural gas in Asia is in the range of $18 U.S. per unit, compared to a price around $4 in North America. An Asian price around $6 may be more realistic, before processing and transport charges are factored in.”

Seems clear to me. You didn’t have to go and do digging to do the research. You just had to read your newspaper that appears at your front door that day.

Citigroup in May 2013. The managing director and the global head of commodities warned in 2013 that Canada risked ceding market share to the U.S. Pacific as exports of LNG from the Gulf of Mexico ramp up.

[1725]

We also heard from Canada West Foundation. They did a report that also noted that “the opportunity for B.C. to supply Asian markets with LNG is solid but not guaranteed. Projects will face competition from each other, from domestic production in China and from pipeline imports.”

The only thing that’s really changed — because there was lots of evidence — is that the Liberals had an unrealistic expectation; now they have to deliver. The only thing that’s changed is that they have to be honest. On this side of the House we recognize that LNG is an important addition to a diverse British Columbian economy, and it’s too important to screw up.

On this side of the House we want four things from LNG — just four things to serve British Columbians well. Development must include express guarantees for jobs and training opportunities for British Columbians. We must get a fair return in B.C. Development must involve and benefit First Nations. And development must protect our land, our air and our water, including living up to our climate commitment.

This is not rocket science. It’s about being consistent. It’s about saying what you mean and meaning what you say. It’s about living up to your commitments. It’s about being honest with British Columbians. It’s about doing your homework. It’s what all British Columbians deserve.

S. Simpson: I’m pleased to have the opportunity to join in the debate on the LNG Income Tax Act. As many of my colleagues have said, this is an important debate. It’s an important debate because there is some degree of clarity starting to evolve around this question of LNG. We’re starting to see some clarity, and the time is coming for us to have an honest, intelligent and realistic discussion of LNG and of the prospects.

The reason that’s so important is because of the road and the path we’ve been taken down since before the election, but continually since that time, by the Premier and by other members of the Liberal government — but primarily by the Premier. What we know about that is: we know that there have been claims made related to LNG that were nothing short of fantastic in terms of how big they were — extraordinary, and also unreal.

They were claims that…. Nobody who is talking about this industry in any sense of reality — not industry experts, not academics, not people who are thoughtful watchers, none of them — shares the view of the Premier. But regardless of that, the view of the Premier is important, and it’s particularly important for this debate and for how we go forward.

What has the Premier told us? Well, it started during the election campaign. We had the bus — “Debt-free B.C.” on the side of the bus. We know, of course, that the B.C. debt is increasing at record levels. We’re running right now…. We’re closing in on, before the next election, $69 billion of debt, and the debt will just continue to grow. The debt has grown more under the current Premier than it has grown under anybody who ever preceded her.

We know we have this extraordinary debt that is a problem for the finances of the province, particularly with its rate of growth. But the Premier told us that we would be debt-free because of LNG. In fact, we were to be debt-free by 2028, about 15 years from the time that claim was made in 2013. We’ll talk about that in a little while, about how we’re doing on getting to debt-free.

The Premier also told us that there would be 100,000 jobs in LNG. No idea how that number came about — nothing to support that. I guess it’s supported by the Premier claiming that six, seven, eight — the number moved but never got much smaller than that — LNG plants and facilities would be built in this province.

[1730]

The number was almost closing in on double digits. We now know that number has shrunk dramatically in the claims of government members and of ministers who are trying to extract the B.C. Liberal Party and the Premier from these wild claims.

We heard about $1 trillion of development in the province — $1 trillion. Out of that $1 trillion, there was to be a $100 billion prosperity fund — a $100 billion prosperity fund. That’s the claim. Now, of course, we know that that fund was going to make us debt-free. In fact, that fund was going to lead to the end of the sales tax. The Premier made that claim. It would end the sales tax.

We all know there aren’t going to be 100,000 jobs. There isn’t going to be $1 trillion of development. There’s not going to be a $100 billion prosperity fund, and we certainly are not going to be debt-free under the B.C. Liberals. That’s our reality.

We have this situation where we have to ask ourselves: where are we at, and how have we got here? What we
[ Page 5217 ]
know is that the negotiations around this have been a dismal failure. The reason they have been a failure, probably more than anything else, has been these wild projections put forward by the Premier, by the minister of gas and by others.

They made these claims. They made it absolutely clear. The Premier, at every turn, in every speech — it didn’t matter who she was speaking to; it didn’t matter what she was supposed to be speaking about — talked about LNG. She talked about these wildly inflated numbers for what the reality will be down the road.

She said: “This is the opportunity of a lifetime.” What she was really saying was: “I’m all in on this. I won an election in 2013 on these wild projections and wild claims, and now I need to win an election in 2017 on the same wild projections and wild claims.” She played all of her cards. She put all the chips in the one basket.

If you know, any time you play a game, if you’ve ever played cards…. My advice to you is: when you play cards, you don’t take your cards and throw them all face up on the table when you start to play. That’s exactly what the Premier did — threw all the cards face up on the table and then asked herself why it was so difficult to negotiate an agreement that made sense.

The reality is that the negotiations were dismal and a failure. What we have here is a situation now where the government is painfully aware of that, and the government’s looking for a way to extract itself.

They will talk about changes in world markets. Well, we know going back to 2012, when others were talking about this in 2012, that the Macquarie Bank — pretty well known; hardly a left-wing think tank — was talking about the opportunities in British Columbia for LNG and said: “Maybe four, but lots of challenges and lots of problems.” All clearly dismissed by the Premier. All clearly dismissed.

The market challenges have always been there. We’ve known that the premium price in Asia was a price that couldn’t be sustained. We saw the reality of that with the Russia-China deal, where they came in at about…. It’s not entirely public, but the talk in the market is about $11 per million Btu. We know $11 won’t cut it here to make this deal work. It just won’t cut it.

You have this situation. What the result of that is, is a piece of legislation where the government that made these wild claims only months ago…. They were still feeling their oats only months ago, when they were claiming somewhere between a starting price on profits, a starting tax on profits of 1½ percent, heading to 7 percent.

[1735]

That was supposed to produce for us about $1½ billion in ten years from a medium-size facility. That number is now going to be $800 million. About $80 million a year is now what that tax, potentially, creates.

The problem with it is that it really is just indicative of everything that was claimed and the lack of a discussion about what is a very complex and difficult issue. It’s one that the government has seemed to be prepared — even on such a challenging economic issue as this, to get the industry off the ground — to deal with in a pretty superficial way as political leaders. Lots of hype, lots of smoke, lots of rhetoric, but still pretty superficial — certainly from the point of view of the Premier.

What we have now is this situation where the claim is that all of these changing world conditions are going to create this problem for us. What industry tells us is that we’re going to get some plants — I believe that — and that’s a good thing. We’re going to get one. We’re going to get two. Who knows? There seems to be a lot of talk that a couple is probably real. It’s probably realistic to get a couple. I don’t know whether they are larger ones like Shell or Petronas or whether they’re smaller ones like Woodfibre. But we’re going to get a couple — that’s the talk — and that’s a good thing.

However, all of the promises that were made about what the results of that would be were not based on getting one or two; they were based on getting a half-dozen. We have this situation now in the province where the government has created an extremely difficult situation for other industries and other parts of our economy. That difficulty comes here, with numbers of people telling us…. And many of these are people who would be much more inclined, believe me, to be buying a ticket to the Premier’s fundraiser than to one of ours. But they’re saying the same thing, and they’re saying it in Prince George, in Kamloops, in Vancouver and in Nanaimo.

They’re saying: “We have important industry and business going on in this province that are facing real challenges. We are finding it extremely difficult to get the attention and the support we need from government to help us deal with our challenges if we can’t connect our work to LNG. The government is preoccupied.”

Now, I will say that I think that’s starting to change as the reality comes home to roost for the government and as the government tries to figure the strategy to explain its way out of not meeting those unrealistic expectations created by the Premier. But those industries are talking about jobs today. They’re talking about real jobs and real challenges and real things that have to happen. That’s the challenge here.

We see that whether you talk about it in terms of skills training or talking to sectors…. They’re saying: “We need trained and skilled workers too. We need workers to help. We’re short of workers, but we’re having a very difficult time having our challenges and our shortages recognized by the government, because they don’t fall into what are seen as the LNG skill sets. But they’re real for us, in computers and other things, and we don’t have the people. How do we get our foot in that door? We pay our people in our sector $60,000 or $70,000 or $80,000 a year, and we can’t find the people to do the work. Consequently, we can’t grow our businesses.”
[ Page 5218 ]

That’s one example. There’s a real problem there, and that’s a big part of the challenge that we’ve seen.

The other thing that we see is the discussion about jobs. For us on this side, the priority is jobs, and the priority will remain jobs. If this industry can create jobs…. It can certainly create jobs in the construction and development sector. It can create jobs in extraction. Not a heck of a lot of jobs at the other end, in liquefaction, but there are some. But those jobs have to be created, and they have to be created for British Columbians.

[1740]

We have a couple of challenges there. The first one is: what are the jobs? What gets created? There is no doubt that there are thousands of pipeline jobs to be had if a plant comes forward. I expect that to happen, and I expect those jobs to be there.

The challenge in those jobs will be to ensure that British Columbians have that opportunity and that Canadians have that opportunity for those jobs. The opportunity isn’t just to say: “We’ve created the job, and if you are qualified, apply.” The opportunity has to be: “We are going to create the opportunity for you to be qualified to apply.”

The blueprint for skills training is supposed to help to do that, but it doesn’t include new resources. There is a shortage, a dramatic shortage of apprenticeship opportunities. The government has not stepped up even on capital projects of its own with taxpayer dollars to create those opportunities. The Minister of Jobs has mused about trying to fix that problem, but we haven’t seen action on it yet. Maybe we’ll see some action, but we haven’t seen any action.

You have an advanced education sector. You have a universities and colleges sector that is not entirely clear about how they deal with these issues. They’re not sure.

The reality is that those jobs have to come to our people. They have to have that opportunity — British Columbians from across this province, First Nations. That opportunity has to be there, and there is a lack of confidence that in fact that opportunity is going to be realized. That lack of confidence gets exacerbated when you see the Premier off signing deals in China talking about guaranteeing opportunities in China and India and elsewhere for what are essentially temporary foreign workers. That’s a problem.

We’ve heard people on that side…. I heard the minister of gas and others talk about that as if to try to convince people in this province that temporary foreign workers have a path to citizenship, and it’s not true. It’s not true. The path to citizenship comes through other programs. It does not come through temporary foreign workers. It doesn’t.

Temporary foreign workers come here, they send their money home, and when their time is done, they leave. If this government had been working with the federal government, had demanded a partnership in decision-making, had demanded restructuring of the program that created that opportunity, maybe it would be a different discussion.

I sat in that board of trade luncheon where the Premier suggested the big change around temporary foreign workers should be the name of the program. Changing the name changes nothing. The reality is that we want people to come to this country. We built this country on immigration. But they need to be able to come and to bring their families and to know they have opportunity and to know their children will be able to grow up here and that buying a house and buying a car and all of those things are a reality for them.

None of those things are a reality for a temporary foreign worker — none of those things. Their loyalty is elsewhere. This is nothing but a business arrangement to work, to put their labour forward and to be paid for it.

There is little or no benefit here for us as a society. We get something built. These people get some money. It does nothing to evolve and build our society. It does nothing to build on that foundation that we built the country and the province on around immigration. It is a different strategy. That’s a problem we face here.

There are other issues around the jobs. We hear about the jobs on the construction side. Well, when I talk to people in the construction industry, they say that they’re very hopeful. But they also don’t have a clear understanding of what those opportunities will be.

Let me give you two examples. One is they talk about the liquefaction plants, and we know they’re going to be modularized plants. We know the plan is to build them in Asia in components, ship them over here and then put them together here. That’s essentially the plan, and everybody has known that. But there are now questions arising about what the degree of modularization is that we are talking about.

[1745]

There was this projection at one time that to build a plant for a medium- to larger-sized facility…. Probably about 3,000, 3,500 jobs was what it was going to take to build that plant. I’m now being told that depending on the degree of modularization, it might be 700 jobs. That’s still important; 700 jobs are important. But it’s not 3,000 or 3,500.

We’re also hearing about floating liquefaction. This is a process that we know is being considered by at least a couple of the proponents in this — at least a couple. You never know; plans could change for the others.

This is a process where there’s no liquefaction plant built at all — none at all. You bring in a liquefaction ship, a ship that does the work. You run the pipe straight to the ship. They process it on that ship and then transfer it to a second vessel, which in fact ships it out. All of that comes on a ship with its own crew, its own expertise and its own technology. They do the whole thing on the ship, and there are no jobs here. The jobs come with the ship.
[ Page 5219 ]

Now we understand that there are at least a few companies that are contemplating that process. There would be no jobs around a liquefaction plant there. So the jobs question is sketchy at best. It’s particularly sketchy about what the long-term jobs are and what the long-term future is here.

British Columbians, I think, are beginning to understand this. We’re more and more seeing people talk about this. We’re more and more seeing people talk about the need to look at opportunities — other opportunities. We’re hearing people talking about other industry. We’re hearing people talk about other futures.

All of this is because they’re starting to question — and, I think, starting to question in very real ways — whether the commitments the Premier started making in 2013, and has continued to make, have any validity or merit at all. As we know, and are increasingly knowing, it mostly was total fabrication.

What we need to do at this point is talk in honest, intelligent and realistic terms about what the future of LNG is. Is that future one plant, two plants? What is the future in terms of jobs? What’s the measurement there?

Of course, we saw the 100,000 job number. As a number of my colleagues have pointed out, those were developed in February of 2013. The government came out with its predictions for the prosperity fund and for the 100,000 jobs. This was based on a report by Grant Thornton. He used an econometric model provided by the province. The province gave him the model, and it produced an estimate that there would be 30 indirect and induced jobs for every direct job. That was the model. For that model, the number of 100,000 jobs was created. That was the model they used.

Now, it’s interesting that in British Columbia you think you can get 30 jobs for every one that’s created, whereas…. The U.S. House of Representatives is also very keen about this issue, because there are a whole lot more natural gas plants popping up in the United States, and they’re much farther along than we are here.

In the United States they have a natural gas caucus in the House of Representatives — it’s a bipartisan caucus; it involves both Democrats and Republicans — and they did the work. We know that the research in the House of Representatives is usually pretty good. What number did they come up with? Did they come up with 30 jobs to one? No. They came up with 3½. They said that for indirect and induced jobs, there would be 3½ jobs for every direct job in the U.S. gas industry. That was honest, intelligent and realistic work — something that we have failed at and been very short on here.

Hon. Speaker, this piece of legislation will pass. That’s fine. I don’t have any problem with that. But it does not take away from the need to have a serious and honest discussion here. It is time for the government, as we get closer to whatever is going to happen here — and we don’t know yet; maybe we’ll get something next year; maybe it’s the year after — we need to start to be more forthright about what the real opportunity is here.

[1750]

What’s the real opportunity with one or two plants? What are the jobs? What’s the work during the construction and development phase? What’s the work after that? Who is going to get that work? What is the real status on training that ensures British Columbians and Canadians have that opportunity to be there and to do that work?

All of that is an important discussion, and it’s a discussion that we need to have here and have very soon. Unfortunately, it doesn’t appear that discussion is going to occur. We have other parts of that discussion we need to have.

Interesting point. I heard Jock Finlayson from the B.C. Business Council on Voice of B.C. with Vaughn Palmer. What was he talking about? He was talking about the need to explore domestic use and a domestic market. If we believe that natural gas is legitimately a transition fuel, then should we be looking at domestic opportunity and how we use it that way and use that in the measurement of energy needs and where the energy production should come from?

It becomes an important discussion. I would hope it’s a discussion that the government would have. The Minister of Energy has said that over the next period of time, it’s a very challenging deliberation, but the cabinet will be deliberating Site C and the demand for Site C and whether it’s a good $8 billion or $10 billion investment, whatever the final number ends up being.

Well, that discussion should include the discussion of domestic use of gas. I don’t know what the answer on that is, but there are smart people out there who, if they’re asked for an intelligent and honest assessment, will come back and tell us what the opportunities are and what the costs are in environmental terms, in financial terms and in social terms.

Geothermal — the same thing. We could have that conversation, but I don’t believe it’s going to happen. I don’t believe we’re going to see that conversation here.

We have a tax that is not going to create the kind of money we expected. I will remind you that we are going to be debt free by 2028. This is on about $80 million a year that we’re going to get out of these plants, based on the government’s own estimate.

Paying off 69-odd-billion dollars, or more, as the debt keeps escalating, is going to take an awfully long time. That might explain why the Minister of Finance said: “Well, maybe 2028, not so much. Let’s look at 2040. Maybe sometime after 2040 is the time when we’ll pay off that debt.” It’s kind of like the government’s ten-year plans, where people go: “Yeah, sure. A ten-year plan without any substance behind it.”

We have a situation where we have an industry that has the potential to be a significant contributor to the overall economic diversity and success of this province. LNG
[ Page 5220 ]
does have that potential, but we need to see it as one piece — and not necessarily the biggest piece by any means — of an economic strategy for this province.

We have to see it in terms of the reality of the world market, of the challenges we face from the United States, from Australia, from China, from Russia, from parts of Africa — a whole array of nations who are all heading down the same road. We have to look at it in a way more realistic way.

What have we said? We have said that we need to get to yes on four questions. We need to get to yes on this being about jobs first and foremost for British Columbians and for Canadians. We will only get there if we have a sincere commitment to that and a sincere effort on the part of government to make sure the opportunities are there, whether it be for people who are transitioning from other occupations and careers, whether it’s for young people in our populated areas looking for an opportunity, whether it is for First Nations looking for an economic opportunity.

[1755]

We have said we need a fair share, and we need to determine what a fair share is. We need to determine what that return looks like and what certainty there is on that return and to be honest about it in terms of what we can really achieve.

We need to have a fair partnership with First Nations. These projects will not succeed without that. There has been some work done around that, but it has to play out in the fullness of time with real opportunities and real jobs. At this point it’s just an idea. It has to play out in real terms.

We need to make sure we protect our air and our land and our water. Frankly, Bill 2 was a terrible disappointment in taking us down that road to achieve that objective. Bill 2 should have been the cornerstone to answer that fourth objective, and it failed. It failed in a whole array of areas, not the least of which in that it only captures 30 percent of emissions as it moves forward.

There will be lots of discussion around committee stage on this, I’m sure. There will be lots more debate on this bill. But I’d say one last time, if the government gets any message out of this debate….

It is time for an honest and intelligent and realistic discussion of this industry and its opportunity — a discussion that we have simply not heard one word of from this Premier or from most of the senior cabinet ministers or the Liberal caucus. It’s time for that to occur so British Columbians understand what it is we are really talking about and what it is we really face, both in terms of opportunity and challenge.

M. Karagianis: I’m happy to take my place in the discussion and debate on Bill 6. Looking at Bill 6, it is a pretty weighty document — 87 pages, 130 sections — and it is, of course, full of complex tax language and references. But I want to refer to the explanatory note of this to kind of set the stage for my comments today. I think it’s very telling.

We have, in fact, been waiting a year and a half for this legislation. The Legislature was called to a very rare fall sitting based on this piece of legislation that has been highly anticipated. So I think it’s important to have read the document and to have made as good an attempt as possible to understand all of the implications of this, whether you’re a tax specialist or not.

The explanatory note that sets this down, I think, is really germane to the discussion that we’ve been having here in the Legislature. I’d like to thank my colleague who spoke just before me for his very cogent and very thoughtful remarks on this bill — and some very provocative thoughts and comments as well. I’m going to also talk about others in the field who have weighed in on this subject.

It says here:

“This bill imposes a tax, effective for taxation years beginning on or after January 1, 2017, on income derived from liquefaction activities carried out at or in respect of an LNG facility in British Columbia.

“For taxation years that begin on or after January 1, 2017, and before January 1, 2037” — so, a fairly significant span of time — “tax is imposed at a rate of 3.5 percent of a taxpayer’s net income.”

Important numbers, and I’ll talk a little bit further about that in a moment.

“For taxation years that begin on or after January 1, 2037, tax is imposed at a rate of 5 percent of a taxpayer’s net income. A taxpayer’s net income” — again, “net” being a very specific and crucial word in this legislation, and I’ll talk about that shortly as well — “is the total of the taxpayer’s net operating income and recaptured capital investment” — recaptured capital investment — “amounts less the taxpayer’s net operating losses and capital investment amounts.”

I’m going to read that again because it’s an important piece of this taxation bill. “A taxpayer’s net income is the total of the taxpayer’s net operating income and recaptured capital investment amounts less the taxpayer’s net operating losses and capital investment amounts.”

[1800]

That will be a particularly important piece of information in this discussion on this bill.

“Tax is also imposed at a rate of 1.5 percent of the taxpayer’s net operating income. The bill provides that tax paid at the rate of 1.5 percent of net operating income can be deducted against tax paid on net income at the rate of 3.5 percent or 5 percent in current and subsequent taxation years. A taxpayer must pay tax separately in respect of each LNG facility at which liquefaction activities are carried out.”

The bill goes on after that for several pages to lay out a number of other things that the bill also does. There is page after page of these. They are complicated topics: cost of natural gas, computation of income, transfer pricing, amalgamation of corporations, computation of members’ net income.

This is a significant document and has been long anticipated. I want to talk about the implications of all of that and the language in here and what it specifically means to British Columbians.
[ Page 5221 ]

Now, the companion piece to this we have also been discussing, which is Bill 2, the Greenhouse Gas Industrial Reporting and Control Act. We had an opportunity to discuss that at second reading, because they are companion pieces. Of course, one is the expectation around environmental responsibility and what the future will hold around greenhouse gas emissions and controls, and the second piece now is how we will tax liquefication plants and the industry that brings those into British Columbia.

I think it’s important to say — and I know that my colleagues have repeated it over and over again — that we, like many British Columbians, are very excited by the opportunity of liquid natural gas. This is an important source of revenue for this province and an important source of revenue for the future of this province and in many years to come. I mean, the taxation bill itself goes out 20 and 40 years. Certainly, there’s an anticipation that this is going to be a significant revenue source for the long term.

I think that something that important to us needs to be done correctly. We need to make sure we don’t make any mistakes in setting this up. We cannot get this wrong. Certainly, we know from other experiences in resource extraction around the province that history has been built on the backs of what decisions we make around how resources are extracted, how they are used, how they are manufactured, how British Columbians’ jobs depend on them — and export and a whole number of other things that speak to the heart of the economy of British Columbia.

Certainly, on this side of the House we have said that our excitement around LNG, of course, does have some parameters that are set for it. We are concerned that a number of conditions are met, that British Columbians are well served by the liquid natural gas opportunity. Those are pretty simple, pretty basic requirements. In fact, I think that most reasonable people would see that they are reasonable expectations. Why would they not be supportable for British Columbians?

At the very beginning — and we’ve canvassed this on this side of the House numerous times — one is the express guarantee around jobs for British Columbians and training opportunities for British Columbians first, foremost and, I think, for the full breadth of the opportunities here that liquid natural gas presents.

Past governments have had great fortitude and great wisdom on how they have developed taxation policies and economic policies around all the resources here in British Columbia. So this idea of British Columbians taking advantage of the jobs first and foremost in the industry for the citizens in this province is not new.

In fact, we have, over the course of our history, looked at the kinds of jobs that were provided in the forest industry, the kinds of jobs that were provided in the mining industry, in fishing — in all of the various kinds of resources that we extract — mineral extraction and certainly the existing liquid natural gas industry.

It has certainly been the wisdom of governments that have gone before us. They have said that these resources are important for British Columbians and that these jobs need to help fuel our economy, help provide a lifestyle, an income and security for British Columbians first and foremost. It has attracted people to move to British Columbia because we’ve had this rich resource environment here.

So it’s not unusual to say and to expect that the next opportunities here in liquid natural gas would be about British Columbians first, most and last. That is one of the things that we truly believe has to occur in this.

[1805]

I think that the second piece that concerns us here is making sure that we provide a fair return for our resources, a fair return of economic value for British Columbians. Now, one of the things that concerns me about Bill 6 and about the taxation details that have been laid out in this bill is that it is considerably different from what we were expecting and promised by the Premier and by this government leading into the last election. There were promises made that were large, that were bold, that were extravagant.

As we have been brought into the House here to look at hard, black-and-white figures, the reality of what we are going to get out of the liquid natural gas tax act is considerably different than what we were promised or what we expected not just 18 months ago but only a few months ago.

As short a time ago as February of this year, we were anticipating and promised a significantly different return on investment to British Columbians than what we see here, and we have scaled back considerably. I’m going to talk about that a little bit more as my time goes on.

This idea of providing a fair return for the resource is, at this point…. This particular Bill 6 looks to be a failure in some regards on that, because we are not getting anywhere near what we were promised or expecting.

One of the other things that I think is crucial here…. I don’t believe there’s anyone in British Columbia that wouldn’t support any of these ideas that I’m talking about. The third part of this is to include real and significant and substantial benefits for First Nations as partners in this.

We are seeing in the last number of months and years here a significant shift around decisions that are made federally and provincially around the kinds of real and genuine partnerships that First Nations are expecting and deserve. We are seeing some landmark decisions made that are changing the scope of what kinds of relationships First Nations can expect from government. That needs to be a real part of a discussion on what happens with the liquid natural gas industry here.

The last piece of it that is really important to every British Columbian — not just to the people in this House that debate this, not just to this side of the House but to everyone in British Columbia — is the environmental
[ Page 5222 ]
protections around our air, our land, our water and our climate commitments.

Now, the companion piece to this Bill 6 — which is Bill 2, the Greenhouse Gas Industrial Reporting and Control Act — has already shown a significant departure from the kinds of goals and expectations that the government has talked about but never been able to really fulfil, and shown this inclination that we’ve seen from the government to say one thing and then do something entirely different.

Say something that you think the voters want to hear, and then do something entirely different when it comes to putting words into action. A huge disappointment around the terms outlined in Bill 2. That departs so much from our responsibility around climate action that there is a complete failure by this government on the companion piece to this, in Bill 2. That’s very disturbing.

I want to talk a little bit about some realistic facts around the liquid natural gas industry and what is going to happen here for the future and what we can expect.

Eighteen months of really over-the-top rhetoric about what the liquid natural gas industry was going to deliver for British Columbians: trillions of dollars in money, a debt-free British Columbia, hundreds of thousands of jobs, a prosperity fund. A whole number of things were laid out as kind of great enticements to get people excited, to re-elect the government and then to keep everyone hyped on the possibilities for the future.

This bill, Bill 6, begins to put a little reality check into all of that, but there are other things occurring around us that do the same thing. I saw an article today in the Times Colonist by Thomas Gunton, who is a director and professor at the resource and environmental planning program at Simon Fraser and a former B.C. Deputy Minister of Environment, so somebody who has a great amount of expertise and interest in this particular topic. He has made some really interesting observations and raised some very interesting questions.

[1810]

I want to talk a little bit about the opportunities in the marketplace, because we did hear how there were going to be trillions of dollars and hundreds of thousands of jobs — money for everything. The reality is that the government itself has known for a very long time that all of that hype was untrue and unachievable.

One of the observations that are made in this editorial piece from Thomas Gunton: “Private sector forecasts available to the government last spring predicted up to two plants with a combined capacity of between 20 million and 50 million tonnes” — well below what the government had forecast. These forecasts cautioned that, worldwide, there are three times more projects being planned than required, making development of even one project in B.C. very challenging.

There’s the reality. Much of what we’ve heard in the way of trillions of dollars and hundreds of thousands of jobs was predicated on a large number of plants. But the reality, which has caught up with the government’s rhetoric, is that world conditions are changing. If there are currently three times more projects being planned than are required, then British Columbians have come late to the game and a penny short in trying to be competitive in this environment. That is a huge concern.

What has happened in the process of doing that? Well, all the great grandiose promises of trillions of dollars and all kinds of largesse and money that was going to be produced out of this have had to change significantly. Even for as short a time period as last February to now, the LNG tax rate has been chopped in half. We were told it was going to be 7 percent. It’s now 3½ percent. That’s in only a couple of months that the environment has changed so much that the actual bill we see before us is half of what we were expecting.

[Madame Speaker in the chair.]

There are also major potential loopholes for the future in real revenue terms. Now, one of the things we talked about here…. I made a point of emphasizing that the taxpayer’s net income was to be calculated after they had recaptured capital investment, and therein lies — right in the language of this bill — some of the loopholes, I think. If in fact the industry can for a very long time look at recapturing their capital investments, looking at their net operating income, at the end of the day, what is there really for British Columbians to look at in real revenue?

Thomas Gunton makes the observation here: “At the proposed tax rates, LNG revenue will barely cover the incremental costs to government to provide services to the LNG sector and its workers.” So there’s the reality.

What happened to all the trillions of dollars and the prosperity fund? Well, it’s right there in the very language contained within Bill 6, right here in black and white in front of us. By the time the industry recoups all of its incremental costs, what little trickle is left for British Columbians? Well, I guess we’ll have to see that in the future, but it does not bode well for British Columbians in getting a fair return for the resources that are being taken from our province.

The implications around this are significant. I want to talk a little bit about the reality of the next piece, around the jobs piece of this, because it’s tied to this. One of the things is that the government has promised 100,000 jobs. That was the Premier who promised 100,000 jobs.

My colleague who spoke before me talked about the reality of what those jobs are going to look like, how the formula was developed and what it was predicated on. But I think an important part of this is that again…. I go back to Mr. Gunton’s comments here.

[1815]

The government promised jobs for LNG. The promise was overstated, because it was based on an inflated
[ Page 5223 ]
growth forecast of five LNG plants. If all of these numbers we’ve heard, and the trillions of dollars, are based on five plants, and the reality is that we are in a highly competitive environment where many countries are well ahead of us and that, as Mr. Gunton states, there are three times more projects planned than required, then British Columbians could very much find themselves investing in an industry that will produce nothing for us, certainly in the foreseeable future, at the tax rates proposed in this bill and even when we move 20 years out from now to a slightly higher tax rate.

We know for a fact that some of the loopholes that have been provided for the industry will give the corporations a corporate tax offset that again will erode whatever little revenue might have come to us.

So it seems to me that the government has really made a clumsy attempt at setting out a new industrial opportunity for British Columbians, unlike predecessors who were much more wise and had much more foresight in how they secured industry revenue from forests and fish and mines and other resources in this province for British Columbians and for the long term for British Columbians.

Lots of Premiers and lots of governments had great foresight and left in place structures and requirements and policies and legislation that protected British Columbians’ jobs and British Columbians’ revenue for future generations. I don’t see that at all in this legislation, and I certainly don’t see it in all of the circumstances that have played out around this as we’ve moved through the last number of months — 18 months for sure.

The issue around these jobs, I think, is going to be a key for British Columbians for the long term because this is a government that over the last decade has basically stripped away and dismantled the trades-training capacity of this province — did away with Red Seals, modularized trades and in many ways chased jobs out of this province.

I know for a fact that in my community, where we have a long tradition of building ships, this government’s lack of faith in that industry chased a lot of workers out of this province and into Alberta. Many went to work in the tar sands. Many of them went elsewhere where their Red Seal was appreciated or where they could take their apprenticeships to gain a Red Seal.

I’m not sure that many of those jobs have made their way back here. Because of that failing, we find ourselves in a circumstance where now we’re going to have to play catch-up — a very big challenge to try and provide the number of skills-training positions and the structure that’s required so British Columbians can appreciate and take these jobs rather than temporary foreign workers.

I think the skilled labour shortage is one of the biggest concerns that we are going to face here, and how we make sure that British Columbians get those jobs and get that training, I think, is pretty crucial ahead of us. Again, this bill does not provide the framework for doing any of that.

We’ve heard the Premier. We’ve heard the government themselves speculate about the whole issue of bringing temporary foreign workers here. We’ve canvassed, and it’s been in the news. I think most British Columbians know that the Premier has been touting jobs in other countries. And at a time when I think British Columbians need to have some confidence that they are going to see fair return on this industry for themselves, it’s a shame that we are in any way selling jobs overseas that could and should go to British Columbians first.

Now, there’s been a lot of discussion here, a lot of innuendo from the government around the issue of immigration versus temporary foreign workers. I think the temporary foreign workers plan, even for the most basic person out there, is pretty self-definitive. It’s a temporary job. You come here on a temporary basis, you earn some money, and you go back to your country of origin. That is a lot different than jobs for British Columbians and opening the door and welcoming new immigrants to this province and making sure they have opportunities in the future.

The government tends to blur those lines far too often, and that, again, gets in the way of real cogent and sensible discussion on the future opportunities for British Columbians in the LNG industry.

[1820]

Now, one of the other concerns that we have here on our side of the House is around the whole issue of being clean and green. I know that as much rhetoric as we’ve heard from the Premier and the government, on the other side of the House, about the greening of this industry, it’s pretty obvious from Bill 2 that that is not going to happen.

I want to just add another comment that I read today in this article from Mr. Gunton. LNG could be “the cleanest in the world,” and at one point here in British Columbia that meant “the energy powering LNG would come from clean sources such as hydro. But not anymore.”

That’s the other thing that’s shifted in the last 18 months since the hype that we heard pre-election. Not only will it not be trillions of dollars or hundreds of thousands of jobs, but the reality is that we have changed the requirements and expectations around how LNG will be powered. Now LNG will burn natural gas to power itself, which will generate substantial greenhouse gas emissions — in the millions of tonnes — here in British Columbia.

You can see how benign Bill 2 is, the companion piece for this, if in fact the industry itself is looking at generating more greenhouse gas rather than less.

I think the other piece of this which is a big concern…. I talked about this on Bill 2. I know we’ve canvassed it exclusively here, and the government has really not responded in any way or answered to this.

Mr. Gunton refers to it here in his comments, and I did it the other day in my debate on Bill 2: that companies are allowed to exceed the government’s target for green-
[ Page 5224 ]
house gas emissions and that they simply have to pay an extra charge for the right to pollute — which, of course, they are very likely to do. Or if they do manage to meet the targets that the government has set, some many years down the road, they can then sell those credits and make money for that as well.

I think that the issue here is very clearly outlined in this editorial today: “An even bigger problem is that most of the rise in greenhouse gas emissions will come from production of natural gas to supply LNG, which the government has chosen not to regulate.” It’s interesting that the liquid natural gas industry will use liquid natural gas to fuel and produce the liquefication, but that’s not regulated.

That’s not captured anywhere in legislation. If they were, then we would see millions of tonnes added into the greenhouse gas emissions here. We would be so far removed from any attempt to reduce greenhouse gases that, we would probably increase our emissions by 50 percent. We have not served British Columbians well at all if we have failed on the fundamental idea of this being a green industry, which was a big selling point by the government 18 months ago.

Now, Mr. Gunton goes on to talk a bit more about the technical details around greenhouse gas emissions. I’m not going to include those here, but I like the final comment that he makes, the final line in his editorial. “LNG might be capable of generating benefits for B.C. if it were properly planned, but we need a realistic assessment of the cost and benefits before we can have a rational dialogue on how to proceed.”

I know that my colleague who spoke just before me also cautioned the same thing — called for the same kind of rational, reasonable discussion to take place. That piece has also been failing in this particular debate that’s gone back and forth across this House.

The air is far too full of rhetoric and accusations and innuendos to really get to the heart of the issues that British Columbians, I think, want some security on. None of the things that we are calling for to support liquid natural gas and to support this bill are unreasonable. In fact, they’re all very reasonable.

There are no over-the-top expectations. We’re not requiring trillions of dollars that can’t be achieved. We’re not talking about hundreds of thousands of jobs that cannot be achieved. We are not, in fact, talking about expectations of this mythical prosperity fund.

[1825]

We’re asking for some very simple points to be met. Make sure that British Columbians get the jobs first, foremost and until there is no need for us to worry about British Columbians being well employed long into the future. Provide a fair return for our resources — not unreasonable in any way. Include benefits for First Nations, and make them real and tangible. Move to really protect our land, our air and our water, and really stick with commitments for the future of British Columbians. That’s pretty simple.

The taxation law itself, as disappointing as it is, is supportable. Who would not want to support this industry? The opportunities are great if we do it the right way. Are we going to? I don’t have faith that this government is on the right track.

I look forward to discussing this further at committee stage to see whether we can tease out more facts.

M. Karagianis moved adjournment of debate.

Motion approved.

Hon. T. Stone moved adjournment of the House.

Motion approved.

Madame Speaker: This House, at its rising, stands adjourned until 1:30 tomorrow afternoon.

The House adjourned at 6:26 p.m.

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