Port Edward seeking fair LNG tax regime

The District of Port Edward and Pacific NorthWest LNG will begin discussions this week about property taxation.

The District of Port Edward and Pacific NorthWest LNG will begin discussions this week about property taxation on the Lelu Island terminal to determine what rate would be fair to both the company and the municipality.

Chief administrative officer Ron Bedard said using the district’s current taxation rate for industry could present an unnecessary burden on the company.

“The feeling is that the normal tax route is not the way to go. For example, if it is a $10 billion project it would mean our community would get $27 million per year in taxes. While I assured Pacific NorthWest LNG we could easily spend it, it seems a bit much … it’s tough to argue for $27 million per year when the whole budget is around $2 million,” he told council, noting a letter received from the province supporting the discussion was the last step to discussions beginning.

“My hands have always been tied because it is the province that sets the regime of how we can tax properties … the province is now willing to work with the proponent and ourselves to potentially would out a taxing regime that is more favourable.”

Pacific NorthWest LNG said the discussions scheduled to take place are among the many that are taking place as the company works toward a final investment decision later this year.

“These discussions build upon the work being undertaken with local, regional and provincial governments to ensure that the tremendous benefits stemming from our project are realized,” said Pacific NorthWest LNG senior corporate affairs advisor Spencer Sproule.

Although the province has given their approval, the legislative power of the government and its determination to see LNG developed is also one of the catalysts for the two parties to work out an agreement that benefits them both.

“If the council of the day digs in their heels and says, ‘no, we’re keeping what we have’, then the province would likely come in and legislate something we may not like … they could say, ‘OK, the mill rate for LNG will be $5 per $1,000 of assessed value’,” Bedard explained.

“This way we have a kick at the can of getting something more favourable to us than something legislated.”

While the City of Prince Rupert will not be involved in the discussions as the terminal falls within Port Edward’s taxing jurisdiction, Bedard noted discussions will likely take place later to ensure both communities benefit should the company make a positive final investment decision.