A Malaysian in BC: Part 5

Image: Reuters 

As a sign of how significant LNG and PETRONAS are in the provincial milieu, for a long period in 2015, the Liberal Party of BC website opened with the above image and the banner headline, ‘Promise Kept. Creating Jobs and Opportunity: LNG in BC’. The ‘promise kept’ refers primarily to the tentative deal signed with a proxy of the PETRONAS group of companies. While downplaying the environmental and social consequences that are the possible corollary of this enormous cash injection, the Liberals are touting their anticipated closing of the PETRONAS deal as a promise kept to British Columbians. This is a deal in which, opponents argue, BC’s LNG knuckles have been squeezed to the bone. The deal brings the lowest of tax revenues to the province on terms that bind BC governments, contractually, 25 years into the future. Indeed as Marc Lee has noted the B.C. government is locking in the tax and regulatory regime in such a manner that any changes made by subsequent governments  to the LNG tax, a special tax credit on corporate income tax, the B.C. carbon tax, and anything else that would affect project costs would lead to the payment of compensation to PETRONAS. The current market conditions foe LNG are such that this may in fact be a fair deal. At projected LNG prices, this deal may not be profitable enough for PETRONAS to want to pursue it. The point about the deal, for British Columbians, is that other than political leverage for the BC liberals, there may little benefit from it.