House Tables LNG & GHG Acts

The House recently introduced two new bills of interest to local governments – the Liquefied Natural Gas Income Tax Act and the Greenhouse Gas Industrial Reporting and Control Act.  

On October 21, 2014, the Liquefied Natural Gas Income Tax Act, or Bill 6, introduced by the Honourable Mike De Jong, Minister of Finance.  The bill sets an income tax on net income derived from liquefaction activities at an LNG facility in B.C.  

The LNG Income Tax rate on net income will be 3.5% for taxation years beginning on or after January 1, 2017 and 5% for taxation years beginning on or after January 1, 2037.

The Province’s tax framework was reviewed in February 2014, and the LNG Income Tax Rate was then announced to be up to 7%.  The Province has noted that the new reduced rate of 3.5% is the result of changes to the LNG market since February 2014.  

On October 20th, the Honourable Mary Polak, Minister of Environment, introduced Bill 2, Greenhouse Gas Industrial Reporting and Control Act.  The draft legislation sets an emissions performance standard for LNG facilities and coal fired electricity generation facilities.  

The draft legislation contains flexible compliance options for meeting the emissions reduction benchmark.  If a facility cannot meet the benchmark through emission reductions on-site, they can purchase emission offsets from B.C. based emission reduction projects, or purchase technology fund units whose proceeds would be invested in clean technology R&D for long-term reductions.

The bill is part of the Province's efforts to have the 'cleanest LNG facilities in the world.'  Under the Greenhouse Gas Reduction Targets Act, B.C.'s greenhouse gas emissions are to be reduced by at least 33% below 2007 levels by 2020.

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