Today at the British Columbia Legislature....The people`s house(Grant G)
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N. Macdonald: I rise to speak on Bill 6, the Liquefied Natural Gas Income Tax Act.
That was interesting. I'm not sure the
minister actually read the bill if you're talking about the revenues
that you still are trying to lay out in front of British Columbians.
This bill is a year and a half late coming, and here it is. The reality
is here before us to contrast with the frankly ridiculous rhetoric
around LNG from this minister and from the Premier in particular, but
really from all members — ridiculous rhetoric.
I would invite you to look at the bill and
actually look at the numbers that we are talking about with this tax
measure. The one thing that the B.C. Liberals needed to do in the
so-called race for LNG was this bill. It's a year and a half late and a
dollar short.
[1625]
In fact, it's more than a dollar short. The
bill — this is it. This is the 2013 B.C. Liberal campaign in the flesh,
and it sure looks different than what B.C. Liberal members promised to
British Columbians. It looks a lot different.
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The bill…. This is it. This
is the 2013 B.C. Liberal campaign in the flesh, and it sure looks
different than what B.C. Liberal members promised to British
Columbians. It looks a lot different.
The B.C. Liberals ran on a promise. Before
we get any further with this bill, let's just remember some of the
things that were talked about: 100,000 jobs created by LNG, $1 trillion
in economic activity. It ends the sales tax. It gets rid of $68
billion in debt. It creates a $100 billion prosperity fund, the first
LNG plant by next year and 12 to 17 LNG plants.
That is completely, completely missing in
this bill. This is the one bill that accomplishes that. The irony here
is if I was to keep my campaign promise, I'd vote for this bill, and I
do. This is exactly what I said we were likely to get. The sort of
fiscal framework that is here is exactly what I said in my campaign and
my colleagues said in their campaigns was likely going to happen.
It is the B.C. Liberal MLAs…. You were the
ones who promised the $100 billion dollar prosperity fund. I looked for
the Minister of Finance's promises on this. I could not find them. He
is the one that is the most careful with what he said. Even in his
speech here he didn't enter into the bluster of the minister of LNG,
because he knows the reality. I would invite you to actually look at
the numbers and see how ridiculous your campaign promises were, and
understand that if you vote for this bill, you are breaking every one of
those promises.
So read it. Read the bill and actually
understand what you're voting for here. It is not my promises that are
broken; it is your promises, and the Premier's promises, and the
bluster of the minister of whatever — LNG, or whoever that was that was
up in front of us — that was supposed to be giving us a somewhat
sophisticated accounting of what this is.
I saw no sophistication. I saw no
understanding of the complexity of this issue from that minister, which
is disturbing. That's our best man on the job? Wow. That is a
disturbing, disturbing concept for British Columbians.
You know, the B.C. Liberal candidates…. If
you parroted the Premier's wild claims, then I am sure you can claim to
be ill-informed. Fair enough. But if you weren't ill-informed, then
you are not honest about the possibilities here. That's the reality.
This bill confirms that clearly.
The thing is, I can actually vote for this
and keep my promises. You can go, and you can look. They're on line —
the debates we had, where the B.C. Liberal candidate was on and on
about $100 billion this and no sales tax. I was going: "No. These are
the actual possibilities that are available to us." That's what I see actually in this bill.
Look at some of these claims — 100,000 jobs
claim. Members should read the Grant Thornton report. You should read
it if you're serious about this job. The B.C. Liberals, the government,
told Grant Thornton that they had to use certain assumptions. They
said that you have to use the number of five LNG plants. Well, okay. Is
there any basis for five rather than six or seven or three? No. It's
an arbitrary number.
Then the B.C. Liberals said to Grant
Thornton: "You have to use the number 2,400 as the number of jobs that
would be provided by those five LNG plants and the pipelines needed to
supply them." Did that number come from anywhere real? No. It was a
made-up number.
Then the B.C. Liberals told Grant Thornton
that they were required to use a multiplier of 30 for the indirect and
induced jobs for each direct job. So that's the Grant Thornton…. Have a
look at it and read it — a multiplier of 30. Just so you understand, a
committee of the House of Representatives in the United States made
similar reports. Their multiplier was 3.5. This is a credible group
that instead of using a multiplier of 30, used a more realistic number
of 3.5.
So the 100,000-person claim is completely
not factual. It is not factual. You wouldn't have to look very hard to
actually understand that. So if you are doing your job, have a look at
that report and the Ernst and Young report as well. Look at the front,
where they say, "Hey, all we're doing is taking numbers the B.C.
Liberals gave us and doing the math. Don't blame us for everything
else."
[1630]
But what I can say to members
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have a look at that report
and the Ernst and Young report as well. Look at the front, where they
say: "Hey, all we're doing is taking numbers the B.C. Liberals gave us
and doing the math. Don't blame us for anything else."
What I can say to members: "If you took your
job seriously, you would actually have a look at that." B.C. Liberals
say it's 30. U.S. House of Representatives say one-eighth of that
amount is a multiplier. There's something completely dishonest about
throwing around fake multipliers, fake numbers of LNG plants.
Let's just use common sense here. An
operating LNG plant employs 120 people on average. It's like a pulp
mill. In fact, Skookumchuck, which is an average-sized pulp mill,
employs 290 employees in my riding. That is one LNG plant — 120. So
when the minister stands up and asks us to believe that five of those
change everything in British Columbia, in Canada, at what point do you
say that's ridiculous and irresponsible for a minister to say that?
I
think you would have said it a long time ago, right?
Let's go to the finance side and actually
look at this bill. This tax bill imposes on an LNG plant, according to
the Minister of Finance, as follows — and you can look on page 12 of
the minister's briefing: "Six to eight years after the LNG plant is
built and operating." This government promised 2015. We are nowhere
near 2015 for an opening. So if one does open, then six to eight years
after it is built and operating you get between $100 million and $125
million. That is the type of money that we're talking about with this
bill, okay?
It sounds big to most people — I get it —
until you understand that the annual operating budget of this province
is — what? — $44 billion. As well, you have capital spending that
varies year to year. We are talking about huge sums when you compare it
to the tax that comes with this bill from an LNG plant — huge sums and
a massive disparity. How does $125 million per year starting next
decade get rid of the province's debt, which is $69 billion now, and
it's growing at a record rate. In fact, for this Premier it has gone
up, in her short term, $15 billion or $16 billion. The Premier.... On
top of that there's another $100 billion in financial obligations.
These B.C. Liberals ran on the notion that
this bill here would eliminate the debt; $125 million per LNG plant
starting six to eight years after a plant is built and operating gets
rid of $69 billion. Now, if there's any thinking person on that side
that's listening to this, explain how that is going to work. You must
know it's impossible. So if you vote for this bill, you are putting
into place the reality that is at complete odds with what you ran for
in the last election — complete odds. Not me. This is what I said
approximately.... This is what was going to happen, right?
The provincial sales tax. Wow, the
provincial sales tax. We're going to get rid of the provincial sales
tax with this — $100 million to $125 million six to eight years from
now, with an LNG plant giving you between $100 million and $125
million. Do the math on that; $6 billion per year comes in — provincial
sales tax. Not only that, we're also going to get rid of the debt and
contractual obligations. Okay.
These B.C. Liberals said this. They said
$125 million per LNG plant collected six to eight years after they are
up and operating will also lead to a $100 billion prosperity fund. The
Premier said it, like two weeks ago, about the prosperity fund. Again,
just do the math on it. We are going to take this $100 million to $125
million per LNG plant in six to eight years, and somehow you get rid of
the debt. You get rid of the provincial sales tax. You get rid of any
need to worry about money ever in the future because you have a $100
billion prosperity fund.
[1635]
If B.C. Liberals were
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get rid of the provincial
sales tax. You get rid of any need to worry about money ever in the
future because you have a $100 billion prosperity fund. So if B.C.
Liberals were honest, they would vote against this bill, because it
doesn't come close to getting you there.
This was always dishonest, to me, for the
B.C. Liberals to promise untold billions, and we ended up with a bill
that gives us a relative pittance. The irony is that that works for me.
This is what I said was the reality. This is the reality.
On page 4 of the minister's LNG income tax
briefing documents, the B.C. Liberals try to explain how they got it
all wrong. I would invite members to go and look at the briefing
documents. They're there, page 4.
Now, what was not known years ago? What is
the big surprise that we see on page 4, and how big a surprise was it
to anybody who knew anything about the natural gas markets? None of
these factors are not there as issues in world journals from five, six,
seven years ago. It was simple, and I thank the library for doing it. I
just asked them: "Could you go back five, six, seven years and send me
articles from around the world on the LNG issue?" They did. They were
fantastic about it.
What do you see? All the factors that
apparently surprised the Minister of Finance are there in articles.
They're not new. This was always a very fluid market. Pricing was all
over the place. The factors that were laid out are not surprises,
really. The $400 billion pipeline deal between China and Russia — it is
regularly predicted. They're talking about how long it's taking to get
to that deal. Now, the actual day it was announced — that was a bit of
a surprise. But that they were working on that deal — no surprise at
all.
Other central Asia natural gas plays. The
pipelines to China. Turkmenistan is already China's biggest supplier of
natural gas and plans to double exports to China by 2020. China's
reserves are well known. That's not new. Australia, Qatar, East Africa,
U.S. LNG activities — they were all well known. People here know that
natural gas prices fell dramatically in North America over the past
decade as new techniques increased North American natural gas supply.
Our critic actually spoke about the topic, unlike the minister
responsible for liquefied natural gas, who put no content towards the
bill. There was a tremendous amount of content in what our critic said.
Henry Hub is the North American pricing
tool. Asia uses the Japanese Crude Cocktail, too. It's a tool that was
oil-based, and therefore, there were pricing differences between North
America and Asia, which you could take advantage of if we could get our
natural gas to Asia. As members here should know, to transport across
the ocean on ships, it has to be condensed, so natural gas is liquefied
by cooling it to minus 161. To build the liquefication plants, there
is a need to invest billions, and it takes a fairly long time to get
them up and going. There are pipelines as well.
The price differential between North America
and Asia is the key. If prices in Asia get to around $10 per million
Btu, then the economics do not work for the B.C. LNG industry. That's
something the government can't control. It's just the reality that we
likely face. Most agree that that's about the price point that's
important.
For a while we were at $18 per million Btu
in Asia, but that was always ephemeral. That was always something that
we knew was moving. A spike in Chinese demand compounded by the
temporary shutdowns of the Japanese nuclear program following the
tsunami and the Fukushima problems — all of these were things that
caused a spike in prices in Asia. But that pricing difference window, I
think most would agree, has for the most part passed, and we are at
the $10 per million Btu mark in Asia now or close to it.
None of that should be a surprise to anyone
who was informed about these markets. Even a casual observer should
know that. As far back as 2011, contracts into Asia based on Henry Hub
pricing were taking place rather than JCC. It goes back as far as 2011.
[1640]
The Premier on February 2013 told a conference that we would get $250 billion in tax
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on Henry Hub pricing was taking place rather than JCC. So it goes back as far as 2011.
The Premier, in February 2013, told the
conference that we would get $250 billion in tax revenue from LNG in
the decade ahead. At that conference.... It was not only that it would
get rid of the sales tax; it would create a $100 billion prosperity
fund. It was even cutting personal income tax and getting rid of the
provincial debt. That was what the B.C. Liberals ran on.
This bill brings in $100 million to $125
million per year per LNG plant, six to eight years after it is built.
That is the reality, and you cannot move past those numbers. You cannot
get anywhere close to what the Premier continues to claim and,
presumably, the LNG minister continues to claims and reality. These
things never will fit together.
If you as the B.C. Liberal.... If you vote
for this, then you are not getting half of what you promised. You're
not getting a quarter. You are not getting one-thousandth of what you
went to the doorstep and promised people if they would vote for you.
That is the reality with this bill.
So there you are. You are literally
taking one-thousandth of what you promised in the last election. It's
like thud, thud. This is it. Well, okay.
You know, with Bre-X — if you're from my
generation, you remember Bre-X — it all fell apart when the reality
became clear. So an election's like a sales pitch, right? It's all
words, all hope. It's really exciting, especially when the sales pitch
includes salting the claims, which is an awful lot what took place
there. But in the end with Bre-X, there was no gold, and here there is
no end to sales tax, there is no $100 billion prosperity fund, and
there is no end to — what is it? — $168 billion if you combine the debt
with the contractual obligations. You know, there's no gold. That's
the reality.
It is just a bill that gets, if it's successful, and we.... You hope it's successful. It's a marginal amount of money.
Here's the problem that I have with the
initiative. There's something wrong, first, that as a governing body so
much of our discussion, so much of our conversation here is built
around complete fantasy. We should be talking about things that are
real. The only way that we move forward in a meaningful way is if the
debate is intelligent and honest. This debate, especially when the
Premier launches into flights of fantasy, is anything but. We need to
have honest, honest debate.
You need to not just focus on something that
really is not going to produce the results that are claimed. It should
be one of many things that this government pursues. If you look at the
list of missed opportunities, it's disturbing what you see.
With forestry, where I was the critic, there
were so many things that we could be doing in forestry that would be
good for the economy. I talked about an LNG plant being equal to a pulp
plant. It's in some cases equal to a normal mill. In Nanaimo shutting
down that mill — that's 100 jobs that we had. All we had to do was try
to find a way to make that work.
What about Harmac? I see the member from
Nanaimo.... Understand with Harmac that there is a need to keep that
integrated industry moving, and it wouldn't take much. There was a
government that created that integrated industry, and there should be a
government that protects it. Those are real jobs that can be
protected.
There are jobs in reforestation that we
don't take advantage of. There are jobs getting accurate inventory.
There are jobs available with new products, all exciting, that should
not just be forgotten about because we're chasing something that, while
it offers some opportunity, is nowhere near what this government
claims it is.
[1645]
There are opportunities in forestry, and
I've had the pleasure to become the critic for mining. It was an
unfortunate time to step in, in many ways, with Mount Polley, but as a
critic for mining, it's a wonderful opportunity to go and see what's
going on in the province. There are some exciting things. I've been
fortunate. I mean, Imperial, Teck, Nyrstar, Hillsborough — they've
been tremendous about showing me what they have.
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a critic for mining, it's a
wonderful opportunity to go and see what's going on in the province.
There's some exciting things. I've been fortunate. Imperial, Teck,
Nyrstar, Hillsborough: they've been tremendous about showing me what
they have.
What are the things that they're looking
for? Well, they want permitting to come faster. They want, actually,
compliance, inspections — these things — to be done properly. But the
government doesn't do them properly. The government hasn't done them
properly. Instead, there is this focus on a fantasy of five, six, 12…. I
don't even know what the LNG minister said was the possibility, but
it's detached from reality. I do know that. I think anybody who follows
this knows that it's detached from reality.
What about other opportunities with LNG?
What about other opportunities? Because there are some. That natural
gas is there; the price is low. There is the opportunity in Revelstoke,
for instance, to replace propane with LNG. There are other
communities. For instance, while we're sending natural gas to China, my
communities — Invermere, Canal Flats, Golden — don't have natural gas.
Now, the economics just possibly aren't there, but there are
possibilities. Maybe that is a good way to build the economy here
locally.
But for that to take place, there would have
to be a venue for intelligent debate on some of these issues. I would
say that this is one of the biggest failures for this government, that
its walk of fantasy of talking about numbers that are completely unreal
means that this House cannot have an honest debate — let's be frank —
about skills training, an honest debate about forest policy, about
mining. All of those are impossible because the government has to stick
to this fantasy of $100 billion prosperity funds and no sales tax.
The minister has said we'd be the envy of
all jurisdictions if we didn't have a sales tax. Well, Alberta doesn't
have a sales tax — right? There are other jurisdictions that don't have
MSP. In fact, I think all of them don't have MSP. There are lots of
other jurisdictions that are doing just fine. I bet a debate on potash
in Saskatchewan or a debate on oil policy in Alberta would not be this
devoid of fact from the leading minister and the leader of the
government. I cannot imagine that there's any other jurisdiction that
has such ridiculous statements made by people who should know better.
Let's just come to the essence of this. The
essence of it is, as a bill…. It's on the public record. You can
actually…. I'm sure you've got 200 or 300 people that watch to see if
we say anything stupid so you can retweet it. Actually, I would invite
those public servants that B.C. Liberals have in such great numbers to
actually go…. You can go on websites where they still have the debates
that we had from the 2013 election. What you will see is me and other
members of this House basically saying that LNG is something that has
potential. It has potential but the challenges are real. The challenges
are real, and one simply has to work towards this, dare I say, one
practical step at a time. You just need to do that work — and fair
enough.
I guess, as an election promise, that's a tough sell, but that is the reality. That's the reality that this bill represents.
So, Members, if you're serious about your
job, look at the numbers. Look at the pages that are there in front of
you in the Minister of Finance's own presentation. Look on page 4, on
page 12. Six to eight years after one LNG plant is built, you get $100
million to $125 million. How does that get you to getting rid of the
debt of $69 billion? How does that get rid of the sales tax of $6.7
billion per year? How does that give you a $100 billion prosperity
fund? All of that really is, frankly, ridiculous.
So here we are. This bill will proceed. I think the essence of it is really in the detail.
[1650]
I will say a couple things about the
Minister of Finance. First off, as I said, I did look for him making
those outlandish quotes, and they may be there. I couldn't find them,
so it seems that he is a bit more wedded to reality than
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finance.
First off, as I said, I did look for him
making those outlandish quotes, and they may be there. I couldn't find
them. It seems that he is a bit more wedded to reality than the
Premier, but okay. That's one thing. I didn't hear it in his speech. As
well, I think that, given that, he's a bit more straightforward in
terms of the reality than others.
We have an opportunity. It is an opportunity
that we need to take advantage of but not to the exclusion of all
others. As I said, for this bill, it pretty well matches what I thought
would happen. For B.C. Liberals, with this, it is the end of any
chance that you are going to come close to your election promises.
I just don't think that matters to you at
all, frankly, but let's say that it did. You might want to read this.
You might want to ask a few tough questions to the people that were
telling you to talk about $100 billion prosperity funds, no sales tax,
getting rid of the debt. I mean, all of that was something that's
simply never going to happen. With that, here we are. I look forward to
the work that will be done in committee stage by our critic.
The other thing I'd like to say is I do know
and I'd like to recognize that the Minister of Finance did set up a
number of opportunities for members to be informed on this bill. I
think that that needs to be acknowledged. It should happen as a matter
of course. It doesn't always. In this case I think that that's
important to acknowledge as well.
With that I take my place, and I look forward to the debate as we go on here_________
(And in other LNG news, guess what LNG Canada is saying about Shell`s proposed LNG plant...on how much taxation they will pay British Columbia...
Shell Canada will B.C. "$94 million dollars per year" during construction and a whopping $15 million dollars per year once in operation....At that rate Brtish Columbia could have a 1000 LNG plants and still never come close to the BC Liberal`s outlandish election promises...Grant G)
"Though those taxes will fall to$15 million annually once in operation, according to LNG Canada"
read the details here
http://www.vancouversun.com/business/natural-gas/Canada+boasts+green+characteristics+Kitimat+project/10350532/story.html
($15 million per year, let`s see, 10 years at $15 million is $150 million....30 years $450 million...MSP premiums, a tax no other province has brings in $2 billion per year.....Yea..BC Liberals couldn`t run a peanut stand..!
As written here for the last 3 years, the BC Liberals bullshitted the electorate...There will be no debt retirement, no prosperity fund, no sales tax elimination, no 100,000 jobs, all bullshit, all con, aided and abetted by the VANCOUVER SUN, GLOBAL tv, CTV AND CKNW, we will be lucky iF this LNG industry doesn`t bankrupt public accounts and poison our air....Grant G..)
Thanks Norm MacDonald..
The Straight Goods
Cheers Eyes Wide Open
1 comment:
Thanks for this Grant.
I think the Harper/Cluck BC Liars purposely 'missed the market' on LNG so they could give our precious resources away for free to their corporate campaign donors and to further their huge corrupt incomes. The Liars sure aren't keeping it for BC's use as they should be because it is a non-renewable resource.
Traitors all of them and I hope they all rot in hell.
Jean
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