CANADA THIRD READING: BRITISH COLUMBIA, CANADA


Liquefied Natural Gas Income Tax Act The Liquefied Natural Gas Income Tax Act sets out an income tax regime for application to the province’s developing liquefied natural gas (LNG) industry, reflecting a February 2014 government commitment and ongoing consultation with industry.


For taxation years that begin on or after 1 January 2017 and before 1 January 2037, tax is imposed at a rate of 3.5% of a taxpayer’s net income. During the period when net operating losses and the capital investment are being deducted, a tax rate of 1.5% will apply, creditable against the 3.5% rate. Beginning on 1 January 2017, the natural gas tax credit under the Bill provides a non-refundable credit based on the cost of natural gas owned by a corporation at the inlet to an LNG facility in British Columbia. The tax credit can be used to reduce the effective British Columbia corporate income tax rate to as low as 8%. In introducing the Bill at Second Reading, BC’s Minister of Finance, Hon. Michael de Jong, emphasized government’s conviction that “the taxation measure contained within Bill 6, including the natural gas tax credit, will serve as an important plank in the overall suite of regulatory and taxation measures that will render us competitive and attractive for those who are seeking to develop this industry in a way that will benefit British Columbians, their families and communities across British Columbia.” In response, Opposition Member Bruce


Ralston referenced the highly technical nature of the Bill, and suggested that recent shifts to the global context within which the framework was developed were perhaps more predictable than government comments would indicate. The Liquefied Natural Gas Income Tax Act received Third Reading, on division, on 27 November 2014.


Greenhouse Gas Industrial Reporting and Control Act


The Greenhouse Gas Industrial Reporting and Control Act repeals the 2008 Greenhouse Gas Reduction (Cap and Trade) Act and enacts a provincial emissions intensity benchmark of 0.16 tonnes of carbon dioxide equivalent per tonne of LNG produced. For coal-fired electricity generation, it sets a benchmark of zero greenhouse gas emissions. The regulatory


scheme authorizes operations to meet emission limits by applying carbon offsets against their greenhouse gas emissions.


While introducing the Bill at Second Reading, BC’s Minister of Environment, Hon. Mary Polak, asserted that the legislation would provide certainty for industry, establishing “a performance benchmark for liquefied natural gas facilities in BC to be the cleanest in the world.” Opposition Member Spencer Chandra


Herbert expressed concern that many of the proposed controls rely upon yet to be established regulations, restricting opportunity for legislative or public oversight of their development; and doubts that given the scope of proposed LNG development in the province, this legislation can facilitate government meeting its stated greenhouse gas reduction commitments. The Greenhouse Gas Industrial Reporting and Control Act received Third Reading on 20 November 2014.


Federal Port Development Act The Federal Port Development Act will extend provincial authority and application of provincial law to LNG-related development on Canadian federal port lands, creating a comprehensive regulatory environment in coordination with 2014 federal government amendments to the Canada Marine Act. This legislation authorizes the Province to enter into agreements with the federal government and a federal port to administer and enforce provincial law on port lands — for example, providing the regulatory framework for Provincial oversight of development and operations of LNG facilities at a federally regulated port.


At First Reading, BC Deputy Premier and Minister of Natural Gas Development Hon. Rich Coleman described the legislation as ensuring consistent regulation for LNG proponents in BC, allowing them to move forward with investments knowing that provincial oversight is clear. Marine traffic and LNG shipping operations are not affected by this bill, and will continue to be led by Transport Canada under the Canada Marine Act. In Committee Stage debate, Independent


Member Andrew Weaver proposed several unsuccessful amendments aimed at clarifying the relationship between federal and provincial


governments and protection measures for species at risk. The Federal Port Development Act passed Committee Stage without amendment on division, and received Third Reading on 5 March 2015.


Nisga’a Final Agreement Amendment Act 2014


When the Nisga’a Final Agreement Act received Royal Assent on 26 April 1999, following more than 20 years of negotiations, the Nisga’a Final Agreement became the first treaty signed in British Columbia since 1899. The tri-partite agreement, between the Nisga’a Nation and governments of Canada and British Columbia, established Nisga’a territorial and natural resource rights over more than 1,900 square kilometres of land in the Upper Nass Valley in north-western British Columbia, and set the terms for wide-ranging powers of self- government, including stipulations around the delivery of health care, education and social services to Nisga’a citizens and area residents. The Act gives effect to the Real Property Tax Co-ordination Agreement between the province and the Nisga’a Nation, which enables the Nisga’a Lisims Government to levy and collect property tax from persons other than Nisga’a citizens, including companies that operate industrial installations.


In the words of the Minister of Aboriginal Relations and Reconciliation, Hon. John Rustad, this agreement “ensures that the Nisga’a Nation receives a direct benefit from property taxation on Nisga’a lands, and particularly with respect to the LNG opportunity.” Amendments in the Bill also provide for the Nisga’a Nation to become a full member of the northwest regional hospital district and for an enhanced relationship with the Kitimat-Stikine regional district, enabling increased Nisga’a autonomy in delivery of health care and social services for its citizens. Opposition Members commended the introduction of this Bill, which brings terms of the Nisga’a Treaty into line with those of more recent treaties reached under the now established BC treaty process. The Bill received Third Reading to resounding applause in the House on 27 November 2014.


The Parliamentarian | 2015: Issue Two | 125


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