Premier launches ‘Prosperity Fund’
Premier Christy Clark kicked off the pre-election legislature session Tuesday with a pledge to establish a new fund from natural gas exports to support social programs and pay down debt.
The main purpose of the “British Columbia Prosperity Fund” will be to pay down debt, starting in 2017 when the first liquefied natural gas facilities begins to ship LNG for export from the northern coast to Asian markets. It will be funded by a tax on LNG exports, as well as gas producers’ corporate taxes and traditional natural gas royalty revenues.
The new fund is patterned after Alberta’s Heritage Fund, set up in 1976 as a legacy for Alberta’s oil and gas revenues. The B.C. fund would receive an estimated $100 billion from LNG revenues over 30 years, based on an assumption of five LNG production facilities exporting gas from the Kitimat-Prince Rupert region.
The plan was presented in the throne speech delivered Tuesday by Lieutenant Governor Judith Guichon, to open a four-week legislature session leading up to the May 14 provincial election. The key task for the B.C. Liberal government in that session is to pass legislation returning the provincial sales tax to B.C. effective April 1, and the speech hinted at relieving that tax as one use for the new fund.
“Whether it is eliminating the provincial sales tax or making long-term investments in areas like education or vital infrastructure that strengthen communities — these are the kinds of opportunities the B.C. Prosperity Fund can provide,” the speech says.
NDP leader Adrian Dix said the government’s focus on LNG development is at odds with its heavily advertised jobs plan, with little mention of forestry, mining, tourism, film and TV production or high technology. The government missed its natural gas revenue targets in a budget update six months ago, so projecting LNG revenues many years in the future is questionable at best, he said.
The government estimates that if B.C.’s LNG mega-project develops as expected, and all of the fund’s revenues are directed to debt reduction, B.C.’s $56 billion debt could be paid off within a decade. The province currently pays about $2.5 billion a year in interest on the debt.