B.C.'s LNG alliance group looking for federal tax breaks, report claims

TORONTO — The liquefied natural gas (LNG) projects in Canada have not been without their challenges. In the past several months, many players in the LNG game have come up against protests and lobbying in the way of municipalities, provincial governments, as well as First Nations groups.  However, according to reports, the major companies behind the liquefied natural gas projects in British Columbia are lobbying Ottawa for tax relief.

The B.C. LNG Developers Alliance is a newly formed group that represents the four largest proponents of LNG exports from the West Coast. It was first reported by the Globe and Mail newspaper that the alliance want their planned multibillion-dollar terminals treated as manufacturing operations to gain tax concessions.

The Globe says the alliance is arguing that it is in the national interest to launch LNG sales to Asia, and reduce Canada's dependence on energy exports to the United States.

In order to plead their case, the alliance sent a letter to the House of Commons Standing Committee on Finance. They hope that when it comes to the next federal budget, which is slated at the end of March, the committee will move on the idea and provide the alliance with the tax concessions they seek.

Currently, under existing Canadian rules, the LNG export plants are viewed as distribution businesses with less favourable tax treatment than manufacturers.

The alliance's four members are Kitimat LNG, the Pacific NorthWest LNG project led by Malaysia's state-owned Petronas, Shell Canada Energy-led LNG Canada and BG Group's Prince Rupert LNG. The Canadian units of Chevron Corp. and Apache Corp. co-own Kitimat LNG, though Apache will be exiting the joint venture, leaving Chevron to find a new partner.