BC Gas Companies Get Big Breaks On Royalties

Norman Farrell

Feb 26, 2018 - While BC consumers of carbon pay an ever increasing tax — $10 billion since 2009 — carbon producers are enjoying billions of dollars in subsidies.

In the fiscal years 2007 through 2017, natural gas companies quietly received benefit of tax expenditures worth almost $8 billion dollars, 71% of that used to reduce royalties otherwise payable to the province. The balance is accrued, available to reduce or eliminate future royalties.

The credit programs are seldom discussed by government or corporate media and the scale of rewards to gas producers never revealed. Any press release from Victoria avoids mentioning total costs. In fact, typical wording purposely creates false impressions. Here are examples of reporting that deceives by omitting full details:

B.C. to extend royalty credit for natural gas industry

Natural-gas drillers awarded $120-million in provincial tax breaks

Pay attention to this quote from BC Liberal Rich Coleman, taken from the Vancouver Sun:

…the program, which was extended by the province in its 2016-17 budget for three more years, at $120 million per year, extending to the end of 2018, Coleman said in a news release.

This is the reality, lifted from various government publications. Assembling this detail is not straightforward and that is by design. Neither government nor industry want us to know the full story.

Gas Revs 2 480

Gas Revenues 2007 to 2017, the table presented in a pdf version.

The data table shows a serious decline in public revenue over time. Market price of gas is one reason but the volume of gas produced in BC has steadily increased.

Note that in the three fiscal years ended March 2009, provincial earnings from natural gas were $7.9 billion. In three years ended March 2017, the amount was down 96% to a total of $287 million.