On March 5, 2013, the British Columbia provincial budget passed
second reading in the provincial legislature. In connection with
the budget, Premier Christy Clark has recently announced more than
$100 billion worth of new royalties and taxes for British
Columbia's nascent liquefied natural gas industry. In the short
term, the provincial budget is relying on new royalties and rising
gas prices to increase revenue by $138 million in 2013-14, this at
a time when low North American gas prices have producers decreasing
production. Longer term, the government plans to implement a new
Liquefied Natural Gas ("LNG") export tax. The government
has yet to explain how the LNG export tax will be implemented, but
overall, it is anticipated to generate $100 billion over 30 years
for a provincial "prosperity fund" similar to
Alberta's Heritage Savings Fund. This estimate is based on five
LNG plants being built in the province.
