Provincial legislation governing liquefied natural gas revenue, taxation plans won't be unveiled until fall
VICTORIA—British Columbia Finance Minister Mike de Jong says the budget he will table contains few spending announcements or tax breaks, but it’s balanced and forecasts three years of surpluses—an achievement most other provinces would celebrate.
B.C. and Saskatchewan are the only two provinces in Canada to post balanced budgets this year.
Last week, federal Finance Minister Jim Flaherty said the Conservative government is on track to balance the books next year—an election year—but this year’s budget remains in the red.
De Jong will walk into the budget presentation with a pair of resoled shoes, to represent “a certain amount of frugality. We’re back in balance, but we still have to guard the taxpayers’ money carefully.”
But Opposition New Democrat finance critic Mike Farnworth said he expects the budget to be a document of missed targets, with little to improve B.C.’s stalled job creation numbers or fulfill the government’s dream of liquefied natural gas (LNG) gold.
He said the Liberals are behind schedule with their plan for earning tax dollars from an LNG export industry.
“They said there would be a royalty regime, a revenue regime by the end of the calendar year,” said Farnworth. “That was at the end of 2013. They missed that target, so I’m not expecting much. I’m sure they’ll be selling more of the family silver.”
De Jong has already said the budget will not include revenue estimates from the development of the industry.
Premier Christy Clark has touted LNG as a trillion-dollar economic opportunity for B.C. that could create up to 100,000 jobs.
Last year, she outlined plans for a fund from resource revenues to pay off B.C.’s debt, currently hovering at $60-billion and rising.
Major oil and gas companies including Petronas, Shell, Chevron and British Gas are exploring opportunities to build pipelines from northeastern B.C. to LNG plants and export facilities on the northwest coast.
The liquefied gas would be placed on tankers for Asia, where it is expected to sell at prices up to three times higher than in North America.
Natural Gas Development Minister Rich Coleman said he expects de Jong to lay out the framework of the government’s LNG policy in the budget, though legislation governing revenue and taxation plans won’t be unveiled until the fall.
But Farnworth’s estimates that government is at least a year behind on its LNG roll-out plans are off target, Coleman said.
“The Opposition wouldn’t know LNG if it came up and bit them,” he said. “They are totally uninformed.”
Jordan Bateman, spokesperson for the Canadian Taxpayers’ Federation in B.C., said Clark’s promise of LNG revenues is still just a promise, and until that money appears—if it ever does—the Liberals should continue their tight-wad financial ways.
Provincial debt has been rising steadily and the Liberals should devote 75 per cent of their surplus revenues to paying down that debt, he said.
Last year, the Liberals forecast a $197-million surplus but that was reduced in the fall to $165-million as a result of lower-than-expected tax and natural resources revenues.
The surplus included a $50-million boost from government’s forecast allowance last year.
The forecast allowance serves as a buffer against economic and fiscal risks.
Farnworth said he’s he not expecting the budget to include measures to improve skills training and job creation, even though government fell short of its job-creation targets.
Finance Ministry data revealed a job contraction of 0.1 per cent—totalling 2,600 fewer jobs—last year, prompting de Jong and Clark to say they hope to do better this year.
The Liberal government’s jobs plan aimed to put B.C. among the top two provinces in Canada in job creation, but B.C. finished near the bottom.
NDP eyes will also be on the Liberals plan to deal with a $2-million court judgment against their government over a contract dispute with teachers, as well as a reduction in federal health dollars for 2015.
“I’m not expecting much, but I’m going to be looking closely to see how the province copes with the reductions in the federal health transfers, spending in some key areas British Columbians consider priorities such as health care and education,” Farnworth said.