2015 Legislative Session: Fourth Session, 40th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Tuesday, July 14, 2015

Afternoon Sitting

Volume 27, Number

ISSN 0709-1281 (Print)

ISSN 1499-2175 (Online)

CONTENTS

Page

Orders of the Day

Second Reading of Bills

Bill 30 — Liquefied Natural Gas Project Agreements Act (continued)

Hon. A. Wilkinson

K. Corrigan

L. Throness

D. Eby

R. Sultan

M. Elmore

Hon. P. Fassbender

V. Huntington

J. Thornthwaite

R. Fleming

Moira Stilwell

M. Mungall

M. Hunt

N. Macdonald

[ Page 8949 ]

TUESDAY, JULY 14, 2015

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Orders of the Day

Hon. T. Stone: I call continued second reading debate of Bill 30, intituled the Liquefied Natural Gas Project Agreements Act.

Second Reading of Bills

BILL 30 — LIQUEFIED NATURAL GAS

PROJECT AGREEMENTS ACT

(continued)

Hon. A. Wilkinson: Of course, it’s a great pleasure to have the support of my compatriots on this side of the House, and of course, it’s a great pleasure to stand up and speak in support of this bill, as this is an historical move in the history of British Columbia.

[R. Chouhan in the chair.]

We are developing an entirely new industry with new capital investment; new skills and opportunities; and, of course, new revenue and new employment. This is an opportunity that depends on a few factors coming together. As part of a modern economy, of course, there has to be an underlying economic opportunity. In some fields, that might be writing software, and the opportunity arises in the mind of the writer. In this case the opportunity arises because of very substantial and reliable gas supplies in northeastern British Columbia, the combination of both liquid and methane gas. These are valuable deposits.

These can be developed, even though gas prices are low, through the efficient systems that the private sector has developed in concert with the provincial government. The technology is available to extract gas which is worth very little at the wellhead and move it to tidewater and export it as liquid natural gas.

This is a new and unprecedented opportunity. It has rarely been used in North America. It is widespread in Asia, Australia and, increasingly, in Africa. This is a worldwide market. It is extremely capital-intensive.

It requires large amounts of capital, committed for the long term, to put in the necessary infrastructure to make this opportunity available. It is difficult to assemble this capital and difficult to assemble the necessary technology. That requires certainty. No investor will go into this space unless they are guaranteed a stable playing field for many years to come.

This government, because of its approach — because of its attitude, because of its fiscal record and because of its underlying philosophy — is prepared to provide that certainty through this bill which is before the House today.

[1335]

The Liquefied Natural Gas Project Agreements Act provides exactly the kind of stability that will attract capital into this very capital-intensive industry.

Underlying this, of course, is the need for good government. We have a major advantage in this space in that Canada has a long record of orderly, democratic government — committed to peace, order and good government — and a steady, reliable provincial government under the guidance of Premier Clark and the B.C. Liberals.

The effects of all of this are that British Columbia reaps the financial benefits — royalties, taxation, employment opportunities. And of course, it gives our people the confidence to have exciting, interesting, very-well-paid work into the future and also to be able to develop those skills that are in demand around the world so that British Columbians — like Texans, like Albertans and like British fieldworkers — will be able to work anywhere in the world in related fields and bring that income back to British Columbia as their home base.

A good example of this is in the gas pipeline business. Detractors can say this is a one-off opportunity. In fact, building pipelines is extremely capital-intensive and requires modern technology and extremely well-trained staff at various levels, from engineering right down to the welders. And of course, it provides a whole spinoff category of work in terms of logistics workers, food service workers and so forth.

This comes around to the issue of talent, something that we have in abundance and something that we will continue to cultivate and will continue to build upon and invest in. We believe in our population. We believe that British Columbians have the goals, have the opportunities and have the capacity to make the best of themselves.

That’s why my ministry, Advanced Education, is a very pleasurable place to work. We help British Columbians to maximize themselves, to make the best of themselves, to build their talents and abilities and become successful in the world. This is not only good for their income and good for their self-esteem, but it builds them into bigger and better citizens so that they can have the confidence to take on the world.

In pursuit of these goals, the province is recalibrating its apprenticeship system and re-engineering its education training model to be more responsive to labour markets. This is partly related to liquid natural gas but partly related to this enormous demand for skilled workers that faces this province in the years to come. With nearly one million job openings coming up in the next seven years, two-thirds of which are related to retirement, we have to train a workforce which will be able to pick up the path that we have already laid out before our economy and build it and make it even more successful into the future.

The province is working with industry and labour to

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update occupational forecasts on an ongoing basis for the economy as a whole as well as for the LNG sector. We’re facilitating trades and occupational training in a variety of communities and particularly along Highway 16, which is, of course, the backbone of the natural gas industry. I will actually be in Terrace this Thursday to make a further announcement about training opportunities in Terrace, so that the people in northwestern British Columbia can reap the benefits of this new industry.

More particularly in terms of skills training and the trades, this year we have targeted $13 million to reduce wait-lists in high-demand trades by creating 2,917 additional critical trade seats at 14 of our post-secondary institutions. We’ve invested more than $700,000 in 326 seats in the trades discovery program for young people to explore a career in the trades.

We provided $5 million last fiscal year to 14 public post-secondary institutions to purchase new trades-training equipment, and we’re anticipating that a similar amount or more will be spent this year to make sure that the equipment our tradespeople are training upon is up to date and so that their skills will be directly transferrable into the workplace.

In addition to this, we’ve provided a B.C. access grant for labour market priorities that provides up to $16,400 for eligible students to travel to the place where they can complete their post-secondary education in in-demand trades. We have a completion grant for graduates that helps students reduce their student loan after completing their programs that support these in-demands occupations. In addition to that, we have a B.C. loan forgiveness program that has been expanded to include more occupations.

We are fully committed to training our workforce so that they are ready to take on the future and to build the opportunities that they want to expand their lives and become confident in the world marketplace.

This, of course, is related to the issue of our First Nations relationships. Our post-secondary system has the capacity to absorb basically all applicants, at this state. We have 430,000 students in the system. But a growing and pressing priority is to make sure that our First Nations youth, and many First Nations adults, take advantage of those training opportunities. This is a generational change, where we have a First Nations population that is ready, willing and able to grasp those training opportunities, upgrade their skills and become full economic participants in our society.

[1340]

The liquid natural gas opportunity turbocharges that opportunity because there will be capital inflows in many communities where aboriginal people are undertrained and underemployed. This will be a golden opportunity for those populations, for those people, for those nations, for those youth, for those students to become bigger, better, more prosperous individuals in our society.

My colleague to my left, the Minister of Aboriginal Relations and Reconciliation, has worked hard to reach 16 agreements related to the pipeline out of the 19 First Nations along the proposed route. The companies involved have been delighted to see the level of mature negotiation that occurs with our Ministry of Aboriginal Relations so that these agreements can be completed in a timely fashion.

Of course, the benefits spin out of this in large numbers. These have already been alluded to, but they never will suffer from repetition. Royalty revenue of $3.64 billion; LNG income taxes, nearly $700 million; carbon taxes of $1.16 billion; corporate income tax of $1.2 billion; provincial sales tax of $1.26 billion; motor fuel tax of $462 million; and property tax of $253 million. Let’s not forget that these are recurring. That property tax is paid every year into communities along the pipeline routes.

Most of these revenue sources are ongoing. They provide a boost to the northern populations of British Columbia and, for that matter, to all of British Columbia through general revenue and also through all of the many professions and trades and sources of expertise across the province that will travel to the areas where the work is needed.

One has to wonder why on earth anyone would oppose this opportunity. One has to wonder why the members opposite see fit to try and kibosh this arrangement which will lead to unprecedented opportunities for British Columbians. We have to wonder why the NDP cannot find it in their hearts, find it in their souls, to give opportunity to people who’ve never had it before.

We only have to look at what Dan Miller, the former Premier of this province and a leading member of the NDP, had to say back in January of 2014. This is a reference to some rather unfortunate remarks that were made by the then Premier, Glen Clark. “We’re going to build three aluminum smelters in British Columbia. We’ve got the downstream power coming back. We’ve got cheap power. We’ve got an advantage that nobody else has, and by God, we’re going to get these built.” It was all sham. Nothing ever came of it. That is the record of the NDP in terms of economic development.

Mr. Miller goes on to say: “Now, I think it makes sense to develop the LNG industry. I think it makes a lot of sense.” That’s the story that we are facing today.

This is bringing an opportunity to fruition, not blowing off a pipedream, not dismissing a chance that never came to be, as the NDP did. This is actually crystallizing an opportunity, turning it into jobs, turning it into revenue and turning it into a success.

We will not follow the mantra of the BANANA team: build absolutely nothing anywhere near anybody. We will build this province. We will take advantage of opportunities. We will invest in our people because we believe in the people of this province. We will continue to invest in them through higher education. We will utilize our resources responsibly. We will engage this province in the world economy, because we are not scared of it. We intend to lead it, not to follow.

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We cannot hide from the world. We have the confidence to lead in this world of ours, not to follow, not to hide, because as Franklin Roosevelt said, the only thing to fear is fear itself. In the words of another individual, Wilfrid Laurier, the future is ours.

K. Corrigan: I’m pleased to rise and speak on Bill 30 and the project development agreement that we are dealing with in this bill. Much has been said on the other side of the House suggesting, incorrectly, that we are not supportive of the LNG industry. We are supportive of the LNG industry, but what we have said from the beginning is that if there is going to be LNG in this province, it needs to meet four conditions that benefit British Columbia.

The first condition is that there has to be a fair return.

Deputy Speaker: The member for West Vancouver–Capilano wants to make an introduction.

Leave granted.

[1345]

Introductions by Members

R. Sultan: My apologies for interrupting the learned discourse. I’m looking forward to hearing the balance of it.

I wish to introduce a bright young woman from Victoria named Rachel Sibbald who is entering her third year in economics at McGill University, is working in one of our leading personal injury law firms in Victoria but is intrigued by a friend who is working in the environmental department of the United Nations. So she has some very interesting career choices ahead of her.

Would you please make Sibbald welcome.

Debate Continued

K. Corrigan: I’ll, perhaps, go back to the beginning to some degree.

What we have always said is that we are supportive of the LNG industry, the liquefied natural gas industry, for British Columbia. But we have said since the beginning that this has to be a good deal for British Columbians. There are four conditions that we believe need to be met in order to qualify as a good deal for British Columbians.

The first qualification is that this has to provide a fair return to British Columbians who…. Don’t forget. We own the resource. The second qualification is that there have to be jobs for every British Columbian who is ready to work or be trained. The third qualification that will provide a fair deal for British Columbians is that any deal needs to protect our air, our land and our water. And the fourth qualification. For many this is, perhaps, the most important. This deal has to represent a true partnership with First Nations.

On each of those counts…. Does this provide a fair return to British Columbians? The answer is no. Does this provide jobs for every British Columbian ready to work or be trained? The answer is no. Does this provide adequate protection for our air, land and water? The answer is no. Do this deal and this agreement provide a true partnership with First Nations? Again, the answer is no.

In fact, contrary to the outlandish promises that we had by the Premier and by the government prior to the 2013 election, what we actually have now, in the government’s own words — I believe it was the Premier’s own words — is: this deal is better than nothing. British Columbians deserve better than it’s better than nothing.

What’s the problem? What is the problem that we have here? Why have we been forced into a deal that does not provide a fair return for British Columbians? The reason is that we had a Premier who, prior to the 2013 election, made all sorts of outlandish and outrageous promises in order to get re-elected. She is now — and the government is now — stuck with those promises and has been put in a terrible bargaining position.

What were some of the promises that were made in the run-up to the 2013 election? Here’s one: at least one natural gas export terminal on line by 2015 in Kitimat and at least three in operation by 2020. That was before the election. That was in 2011, in fact, in the jobs plan. The claims got actually more grandiose as we came into the run-up to the election in 2013. In the election year the claim was five new LNG plants in British Columbia before the end of the decade.

We had promises that we were going to have a $1 trillion industry. I’m not sure there are too many British Columbians who can even wrap their heads around that. I believe that a trillion dollars is $1,000 billion, and that’s quite a promise to make.

There was a promise or, at least, an aspiration — a plan to eliminate the debt within 15 years, a plan to eliminate the sales tax, promises that there would be $100 billion of taxes and royalties, 100,000 new jobs. In fact, that was what was slapped on the side of the election bus — that we were going to have a debt-free B.C.

[1350]

Perhaps largely on the basis of that promise, we now have a post-election situation where we have a Premier and a government that have made outlandish promises in order to get elected — quite publicly, obviously — and have staked their political reputations on these promises.

What is the reality? Well, the reality is that here we are in 2015. No proposal has reached final investment decision. That was an election promise broken. The promise in the jobs plan, prior to the election, that we were going to have one plant on line by 2015…. That promise has been broken.

Unfortunately, these promises have been rooted not in reality, not in good planning, but rooted in politics and political expediency. Certainly in the time I have been

[ Page 8952 ]

elected, since 2009, it seems to me, unfortunately, that very little is done by this government rooted in good planning and prudent behaviour but instead is rooted, like almost everything else the Liberals do, in the interests of helping the B.C. Liberals or their friends, their donors, or getting themselves elected.

The Liberals have been increasingly desperate to get a deal. They now say that anything is better than nothing. I think British Columbians deserve better than that.

What kind of a bargaining position is it when the government is desperately bargaining in order to say that we got one deal, better than nothing? I’m not so sure about that when you look at the opportunity costs. What kind of a time is it to be making a deal like this when (1) the proponent knows you’re absolutely desperate to get a deal, and (2) the price of LNG is at historic lows? There is significant competition all over the world.

If you went to a car dealer…. You walked in the door and said: “I guarantee I’m going to buy that car. I want you to know that right from the beginning. I guarantee” — to the dealer — “I’m going to buy that car over there. Let’s start negotiating, and let’s do some really tough negotiating. But by the way, I promise you that when I walk out the door today, I’m going to buy that car.”

When you go into negotiations…. Mr. Speaker, you’ve been in many negotiations before, as I have. When you go into negotiations, one of the things you should have the ability to do is to walk away from those negotiations and say: “This deal isn’t good enough. I’m going to walk away.”

This government has proven to be quite capable of that when it comes to the teachers. They’ll walk away from the bargaining table in all sorts of different circumstances when it suits their political will. But they didn’t have the ability to do that now. The terms of this agreement make that very, very clear.

What are the results of that poor bargaining position? We have a bad deal for British Columbia. We have a valuable resource, but we’re not getting the full value for that resource because of a government whose aim is primarily political and who is not acting in the best interests of British Columbia.

I mentioned a second ago the opportunity costs. It’s not just the terms of the deal. It is: what could we do with that resource? It is our resource. It is in the ground. We should not have to hurry, and hurry for political expediency.

What about job promises? What about the job promises that were made? We were promised there would be 39,000 construction jobs and 75,000 full-time jobs once the industry was in operation. First of all, to date, none of these jobs have been created because no LNG terminals have begun construction.

The real concern about this deal is, in fact, that the government fully intends that a good portion of those jobs will go not to British Columbians or Canadians but rather to temporary foreign workers. The Liberal government pressed the federal government to expand the temporary foreign workers program and signed a memorandum of understanding with China that would allow foreign workers entry to B.C. to expand the LNG industry.

[1355]

Petronas, the proponent we are talking about here, has said that it expects to hire 70 percent of temporary foreign workers during peak construction. That’s a good deal for Petronas. That is not a good deal for British Columbians.

In fact, Petronas has also said, essentially, that wherever cheaper foreign labour can be used, it will be used, and there is nothing in this agreement that stops them from doing that. I will quote here from a Globe and Mail

article by Brent Jang, where Petronas has said it will shift engineering design work to lower-cost centres overseas and also source materials overseas. The quote, from December 4, 2014:

“Engineering firms are expected to revise their plans with a view to greater input from ‘high-value engineering’ offices in countries such as China and India, where labour costs for engineering work are lower than in North America and Europe. Firms wanting to do business with Petronas will be pressed to use their connections with Asian suppliers to get better deals for orders of raw materials.”

I do not fault Petronas for whatever it does. As long as Petronas and the other companies involved are following the law and following the agreement that they have signed with British Columbia, I don’t blame them. That is their job, to get the best deal for them as a corporation — as a publicly owned corporation, I believe, in the case of Petronas, actually. But that doesn’t mean it’s a good deal for British Columbians.

The promise of jobs — the overinflated promise of jobs, by the way, because we now know that we’re only talking about 330 operational long-term jobs, which is a far cry from what the Premier promised on a per-plant basis and, overall, a far cry from what was promised a few years ago in the run-up to the election — 100,000 jobs, is simply not happening under this deal or any other deal.

Of course, another feature of these deals is that whatever template has been set will be the template for future deals — and, in fact, not only that, this agreement says that if another company gets a better deal in some aspect of some future deal, then Petronas gets to have that added better deal as well. They get to have that provision in their deal. So it’s very disappointing from that perspective.

I’ve got to say that in terms of the lack of protections — the lack of environmental protections, the lack of job protections — and the lack of benefits for British Columbia, I’m beginning to feel that this deal is one that puts us in a kind of Third World place. I’m not talking about Third World countries or that we’re going to be in a Third World situation. I’m saying that we are acting with the same kind of desperation and need, it appears, that some countries that are under great financial stress have been put in because they have to give away their resources because they’re desperate for money. Well, we shouldn’t be des-

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perate for money in this province, and we’re not getting nearly what we should as a return anyway.

I noticed that the Minister of Transportation this morning made the statement that the building trades, whose members would and should be doing a large part of the construction if there is a deal…. He said that the building trades are in support. Well, I’d like to just quote what Tom Sigurdson, the executive director of the B.C. Building Trades, said this morning on CKNW. I think the mistake the minister made was that the minister said he supported this deal, this project. And while the B.C. Building Trades, like the B.C.

New Democrats, have been supportive of the industry, what they have now said very clearly is that they are not supportive of this deal as it exists — or if you want to call it support, it’s very, very lukewarm.

He said this morning: “When I take a look at the enabling legislation and the project development agreement that the province has entered into with Petronas, I don’t see sufficient enough support for British Columbian workers in the legislation or in the agreement.”

[1400]

Mr. Sigurdson — Tom — has said essentially that because the province owns the resource, they should see the benefit of those jobs. I think, in fact, he was being nice when he said that. I think he was being polite when he said that, because he wants to work on behalf of his members and try to work with the government. But obviously, he has come to the conclusion, as have the members of the building trades, that that is very difficult to do under these circumstances.

I want to go back to why it is that we, according to Petronas, may well not be able to fill those jobs with British Columbians or Canadians, but particularly British Columbians — up to 70 percent of the jobs during the peak of construction. They say 70 percent temporary foreign workers during the peak.

It’s the history of this government’s behaviour and this government’s actions with regard to training of apprentices and then journeymen and -women. It’s because of their failure and their acts over the last 15 years that the apprenticeship system is in shambles right now.

So there’s another good reason for us to sign an agreement. Over the past 14 years, the government destroyed what was a well-functioning apprenticeship system, took apart the training system and created a system which ended up with completion rates of apprentices of 40 percent. That was under the ITA.

We don’t have the workers. Of course Petronas is thinking they’re going to have to bring 70 percent of the workforce in, in addition to outsourcing whatever they can from engineering, design and possibly building the structures modularly and barging them over here. It’s quite stunning.

A major part of the problem is that we have an apprenticeship system and a training system which has been in shambles. Now we have a government that is saying we’re going to catch up. This is all backwards. This is being done backwards.

We had 14 years that we should have been building on a good apprenticeship system. We should have the people in place, and we simply don’t have that. Neither are there requirements in this project development agreement. There are no requirements that there be apprentices on the job. Once again, the provincial government has failed British Columbians.

It’s not necessarily a concern that we should have in this province or in this country, I guess. But I have concerns what this agreement is going to be doing to public institutions all over the world. Companies like Petronas are going to be saying all over the world: “Look at what we managed to pull off in British Columbia. Look at the great deal we got and how much we ground them down because they were desperate.”

They will then be going to other countries. The negotiating power of the public to provide resources to their citizens around the world is going to be compromised because of the lousy deal that the province made in this case.

I want to go back and say this destruction and dismantling of the apprenticeship system was warned of way back, as far as an Auditor General report of 2008. It said, “The ITA did not sufficiently consult or collaborate with its stakeholders in developing plans and strategy. Given the significance of the changes being introduced and the number of stakeholders involved, this was a large omission” — a guiding theme, I would say, of this government if I ever heard one. Lack of consultation, lack of consideration of what the impacts would be and a very high-handed approach to changes that are being made. I think this is another example of that.

[1405]

Another issue that I want to touch on for just a second is the fact that this deal, astonishingly, locks this province into 25 years of public policy. It’s 25 years that no other government can change many features of the act — 25 years this project development agreement locks us in. Subsequent governments can make changes, but if they do, they have to pay Petronas back for any costs that they incur. Twenty-five years — that’s astounding. It’s intergenerational.

I was just looking at an

interpretation. I actually was looking at the development agreement in addition to the legislation. The

interpretation of the agreement says: “A reference to a party or the proponent includes that party’s or the proponent’s executors, administrator, successors and permitted assigns, including persons taking by way of novation.” I mean, that, to me, reflects…. If you’re starting to talk about successors and administrators, we’re talking intergenerational here. Of course, that’s necessary in the agreement, because the government has signed an agreement that locks us in for 25 years.

I would describe that as a stunning privatization of the public resources of British Columbia — a stunning

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privatization. We are locked into…. If there are changes to the LNG tax or if there are changes to the special tax credit on corporate income tax or if there are changes to the B.C. carbon tax and other things that would affect the project costs, essentially, what this agreement says is that we, as British Columbian taxpayers, are going to have to pay compensation to Petronas. Now, it is understandable why the company would seek to get that kind of deal in what is, admittedly, a low-margin industry, but it is, nevertheless, astounding that they have agreed to that.

I mentioned earlier that this is at a time when the price of gas is so low. It’s a terrible time to be negotiating a deal like this. It costs about…. Now, this is an analysis done by Marc Lee at the Canadian Centre for Policy Alternatives. I know sometimes the members on the other side don’t appreciate those reports. But you know what’s interesting about the CCPA, as many on the other side would want to criticize those reports, I’ve never heard anybody come up with any credible opposition to the facts and the analysis that they do.

According to Marc Lee’s analysis, it costs about $10 per 1,000 cubic feet to land LNG in Asia due to the high costs of liquefaction and shipping,

whereas current prices in Japan, Korea and China are $7.45 to $7.85. Any company exporting B.C. LNG in the current market would be losing lots of money. It may be — he goes on to point out — that Petronas is willing to sign this deal anyways because of the assurance that they’re going to have this deal for 25 years.

That does not point to anything the matter with Petronas. What it points to is how ridiculous it is for us to be signing an agreement under current conditions. Essentially, what we’re saying is that even though it costs more to get the gas to Asia than what we can get for it, than what will be paid for it, there is enough in this deal for Petronas that they are willing to take that chance.

Because the deal is 25 years long, we are in the position that this deal could be sold. It is something that has happened with P3s in this province. The moment the P3s are signed, they are such a good deal for the companies, and they provide such a good deal: a long-term commitment to money from the taxpayers of British Columbia, even though they are terrible comparative deals to doing it publicly — that suddenly there’s a whole new market in selling off those companies.

[1410]

So the deal that we’re making with Petronas today may be sold. We’ll see. I would suspect that the sooner…. If we see this deal sold to somebody else, we’ll know that they got a really good deal. We’ll see. I’m not sure. There may be something in the agreement that at some point in the future will limit that. I didn’t see it in my reading of it.

We already agreed, reluctantly, to a reduction of the taxes associated, because we thought we wanted to support that, in the fall. But now, when you add all of these other commitments, when you add the fact that we are not protecting the environment…. That’s another whole area that I haven’t talked about, the fact that 70 percent of the upstream emissions are not covered by this agreement. If there are any environmentally impactful changes, we have to compensate the proponent for it. We have not protected the environment with this agreement.

Overall — I see that my time is coming to an end — this is not a deal that I can support. This is not a deal that provides the jobs that were promised. This is not a deal that provides the environmental protections that British Columbians deserve. This is not a deal that in any way provides a fair return to British Columbians, who own the resource. This is not a deal that provides a guarantee of the jobs for British Columbians ready to work or be trained. It does not provide the protection for our air, water and land.

It certainly doesn’t provide the true partnership with First Nations. One would have thought that that work would have been done in advance and that there would have been a true partnership. Instead, First Nations are being relegated to a back

chapter in the agreement under a title of “Other matters.”

I cannot support this agreement. I’m very disappointed in it. I’m very disappointed that it will pass. We’ll see whether or not the agreement is signed.

I think it’s interesting that one of the provisions of the agreement is that Petronas…. It all has to be in place — oh, what a coincidence — just before the next election. Once again, decisions are being based not on the basis of what’s in the public interest, but decisions are being made on the basis of what is politically expedient for the B.C. Liberals.

We are being sold out by this deal. We are not being protected. The jobs are not there. The B.C. Liberals have demonstrated once again that their priorities are not to protect the public interests of British Columbia.

L. Throness: It’s a great pleasure to arise in the House today to speak to Bill 30, the LNG Project Agreements Act.

Let me take a moment before I begin to welcome a new constituency assistant. Dagmar Lucak began in my office a couple of months ago, and she’s doing a great job. She’s solving problems left and right. I really appreciate her heartfelt commitment to the welfare of my constituents.

It gives me great pleasure to rise in the middle of summer, where we’re all working hard too, in this extraordinary session of the Legislature. It’s very unusual for the Legislature to sit at this time of year. We’re sitting in the middle of summer because it’s an extraordinary circumstance. B.C. is on the cusp of an economic boom that has never before been seen in the history of our province. So timing is important. It’s not a done deal yet. That’s why we’re here.

We’re here to fulfil our end of the bargain, to pass the legislation before the summer ends, and then there will be only one or two more hurdles to cross before this fantastic deal can be done in B.C. We’re doing everything

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we can to bring Pacific NorthWest LNG to a final investment decision this fall.

Today we’re considering a long-term commitment of the government to a consortium of companies, to Pacific NorthWest LNG. It’s a 25-year commitment. From time to time we make personal commitments that are long term, but rarely is it 25 years. It might be more of a four-year commitment to university or a car loan or an employment contract for a few years. Only on occasion, in extraordinary circumstances, do we commit for longer periods of time. I think, for example, of a mortgage.

[1415]

We commit ourselves to a mortgage because the benefit of owning a home is really great, but we can’t afford to pay for the house up front. So we get a mortgage. We commit to the bank to take on that mortgage. We try to lock in a low interest rate for as long as we can because we want the security of the principal as well as a low interest rate in return for our commitment to keep on paying to the bank. Whether we take on a mortgage or not depends on the magnitude of the interests that are at stake and the benefits that we will get from it.

Well, what is at stake? What are the benefits that might accrue from this extraordinary 25-year arrangement? Allow me to place this in context. Pacific NorthWest LNG is prepared to invest $36 billion in U.S. funds to construct and operate its LNG facilities. That’s equivalent in today’s dollars to $46 billion Canadian. It’s a massive amount of money. That’s more than our annual provincial budget. It’s an enormous amount of money.

Until now the largest private sector investment in B.C.’s history was in Kitimat. It began in 2011. It was just completed. It was the Rio Tinto Alcan aluminum smelter modernization project. It was worth $4.8 billion U.S. In today’s currency that’s $6.1 billion. That’s a lot of money. That was the largest private sector investment ever in B.C.’s history. But the Pacific NorthWest LNG investment will amount to $46 billion Canadian. That’s over seven times bigger than the largest-ever private investment in B.C. in just one project.

The size of this one project will dwarf every other private sector investment in over 100 years of B.C.’s history. That’s amazing. When a company is going to invest this massive amount of money, when it’s a project of this scope and size, can we blame it if it wants to fix its costs as much as possible over the long term?

There are many uncertainties in a project of this magnitude. For instance, it has to borrow to complete the project, so the company has to deal with interest rates that might vary, prices for natural gas that might vary, business partners that may have varying levels of success, competition in the marketplace, technical problems encountered during construction, politics in other less stable countries than B.C., a climate and geography that can be difficult in B.C.’s north, technological change, unforeseen environmental risks and many other uncertainties.

It’s natural for it to want to seek certainty from a major partner that it can trust, and that’s our government. We are a partner that companies can trust. So we’re helping to bring Pacific NorthWest LNG to the table by reducing their uncertainty. That’s a natural thing to do.

We’ve addressed construction and operation costs as the first great $46 billion Canadian benefit. As the second great benefit to British Columbians as part of this deal, allow me to talk for a moment about revenue. In addition to construction and operation, there will be a stream of revenue made up of taxes and royalties over the next 15 years right through to 2030. We can estimate how much that will be. Officials have projected it, and the amount is $8.6 billion over that period of time.

That amount alone would pay off a quarter of our taxpayer-supported debt. That’s a massive amount of revenue. Taken year over year, it would be about $575 million per year. It’s approaching the amount we take in from forestry every year and much more than we take in from mining, for instance, or natural gas revenues every year.

It would be my preference, of course, in the future that we reduce public debt with the majority of that money. But think of the immense and wonderful things that we could do with that kind of revenue right through to 2030.

A third most important benefit to British Columbians will be jobs. Construction alone at its height will employ about 4,500 people. Those people will be sourced, of course, from Canada first and regionally first. They’ll be buying things. They’ll be paying taxes. There will be all sorts of positive spinoff benefits.

After construction is complete, there will be 300 direct, permanent, well-paying jobs and 300 indirect, permanent, well-paying jobs. These jobs are going to help to build a highly skilled workforce that will be able to compete for other jobs, other projects, so there will be long-term spinoff effects from these jobs that will be created. That’s the third biggest benefit.

Another benefit to our province will be the momentum that this massive deal will create. Development begets more development. Optimism creates optimism. There will be synergies possible that weren’t possible before that will allow new entrants to reduce their own costs.

[1420]

Arrangements between companies could be made to benefit from another’s power source, others’ pipelines, others’ supply chains, workforce, port facilities, and so on.

There are now 19 other consortiums waiting in the wings who’ve expressed interest. None of them have backed out yet. Some are on the verge of making a final investment decision. The final investment decision by NorthWest LNG will be yet one more reason for others to say yes to more investment, more jobs, more prosperity in this province.

I just want to underline that $36 billion in investment and $9 billion in revenue is just from one of 20 possible consortiums. That is an amazing possibility, something

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that could never have been matched by an NDP government.

Allow me to answer objections. Of course, there are objections, as are inevitable. The NDP, for instance, says that there are not enough jobs in this agreement. But it is what it is. That’s how many jobs it takes to build this project. I guess we could hire people to sweep the floor and so on, but that wouldn’t be very efficient.

I honestly think that if the NDP had their way, there would be no deal and no jobs, because the NDP would never have seen — or if they would have seen, they would not have seized — the opportunity of LNG in the first place, because it is too internally divisive for that party.

Some don’t like fracking. Others don’t like fossils fuels — period. Others don’t like the possibility of foreign workers. There may be other objections. The deal would have been picked apart before it started, or possibly after it began.

The papers noted today that the very fact that they oppose giving 25 years of security to Pacific NorthWest LNG suggests that they would reopen the contract in midstream, and they never would have been able to strike a deal on that basis.

Another objection. One of my constituents accused the government of signing a sweetheart deal with Pacific NorthWest LNG. What’s a sweetheart deal? A sweetheart deal is a one-sided agreement where a preferred company is given a special favour they wouldn’t otherwise get for some political or personal, non-business, non-economic reason. But this is not a one-sided agreement.

We are giving long-term certainty to a company, but we are getting an enormous commitment in return; $46 billion and $9 billion in revenue could never be called a sweetheart deal by anyone.

This is a hugely expensive outlay by a consortium of world-class companies. Nor is this a preferential deal for any one company or group of companies. The legislation before us will apply to all LNG consortiums that want to invest in B.C. over the next ten years.

Some say that we’re tying a future government’s hands. Though it’s true that we’re trying to make sure that Pacific NorthWest LNG and other LNG consortiums don’t experience tax increases that specifically target their industry, we are not tying any hands of a future government on general tax policy.

If a future governments wants to raise the corporate tax or raise the carbon tax or institute some new general tax for the whole province, it will apply to LNG companies as well. But if a government wants to discriminate specifically against LNG companies, then the provisions of this legislation will kick in to indemnify the companies against this kind of discriminatory tax behaviour.

Really, I think that we’re simply putting into legislation what a good government would do in practice anyway. We’re not a banana republic. Our word is our bond. Our government can be trusted to make a long-term deal and that it will stick.

We would not intend to change the agreement after we’ve signed it, anyway, so it costs us nothing extra to give greater certainty to these international companies, which often have bad experiences in other countries. And that may be why they want that kind of security with us — to indemnify them against midstream changes in the rules.

We’ve been accused, even today, of providing fewer job guarantees than the Australians in their already well-developed LNG industry. But allow me to quote from the Australian Barrow Island Act, passed by the government of Western Australia in 2003. Let me give you some provisions of these so-called ironclad job guarantees: “except in those cases where the Joint Venturers can demonstrate it is not reasonable and economically practicable to do so, use labour available within Western Australia….”

Or how about this one: “as far as it is reasonable and economically practicable to do so, use the services of engineers, surveyors, architects and other professional consultants…within Western Australia….” I could go on. This document is full of caveats, full of where-possible clauses. There are no ironclad job guarantees in Australian LNG agreements.

[1425]

Someone else has asked: “If these benefits are not realized, you’ll be gone as a government, and future governments will have to deal with it.” What if that happens? What if the consortium goes bankrupt and walks away halfway through construction?

The answer is that we will gain less, but we will have lost nothing because we’ve invested and we’ve risked virtually nothing. If we only gain, say, $10 billion and not $36 billion in construction, we will still have gained $10 billion in construction. Because we have little or no investment in this proposal, there’s no risk to the people of B.C. There’s only an upside. They’re going to win from this proposal.

Another person said: “You will live to regret this deal.” Is that possible? Is there some unforeseen devil in the details that will cause us to regret this deal in the future? I suppose there could be. In every initiative there is some kind of risk. We have to weigh this possibility of regret against the probability of regret over doing nothing, over neglecting to capture this amazing opportunity.

So what if we did nothing and suddenly realized that we could have had a stream of benefits of over $45 billion and thousands of jobs but that we let it slip through our hands and, as a result, all British Columbians will have to live, over the next 25 years, with a lower standard of living? I think the likelihood of regret over doing nothing is far greater than regret over doing the deal.

In the end, if I have to choose our regrets, I would rather choose regret in plenty rather than regret in want. Regrets are far easier to bear on a full stomach. Doing this deal will allow us to have plenty.

I want to say a word about the NDP opposition to this bill, which I can hardly fathom. I spent eight long years in opposition in Ottawa as a researcher for the official op-

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position. I know what it’s like to be in opposition — to write endless questions for question period, to pour your heart and soul into being a good opposition member and then be rebuked by the voters for it. That’s happened to me a number of times.

The opposition has a job to do. It’s a legitimate job to highlight the problems that exist and provide the opposing perspective, but it doesn’t mean that they have to vote against a bill. In fact, I’ve often been in this chamber when the NDP have voted for a bill. Why aren’t they voting for this one? I think, as I said before, that the NDP are trying to preserve party unity in opposing this bill. There are internal divisions over different aspects of the LNG industry. Probably some MLAs on the opposite side would support it. Those MLAs who depend more on union support, perhaps, might like to support this bill.

But there are some who don’t like fracking, on principle. There are others who are philosophically opposed to the use of fossil fuels in any way. Others might reject the use of foreign workers. Some may not like development — period. They might like to, rather, leave the land alone. Or they oppose the use of ships to carry LNG.

We can answer these objections. We all know that there has never been a contamination of water through 50 years of fracking and that 75 percent of water used in fracking is now recovered and used again, that fracking is safe and becoming more safe and more efficient all the time. We could point out that in developing LNG, we’re making the world a cleaner place, because China will substitute natural gas for coal.

We could say that LNG ships have been carrying LNG for 50 years. In fact, they’ve completed 77,000 trips without incident. I can understand these principled objections, but they can be answered.

If the idea of the NDP is to preserve their own party unity over the best interests of our province, that is another thing. It could be a fatal mistake to make — to vote against a larger good of the province in order to try to satisfy all the elements within the party. I think that the NDP will have to answer for that in the next election. So I would encourage the leadership of the party to look at the big picture, to look at the broad benefits of this new clean industry in B.C. and to support this legislation. It’s not too late.

I want to close by talking about one final benefit, and that is northern development. Let’s remember something down here in southern B.C. — in Victoria and Vancouver and the Lower Mainland. We can become very Vancouver-centric. It’s very easy for the people from Vancouver, where the economy is humming — because of the Port of Vancouver and high housing prices and lots of construction — and where most of the population of B.C. lives. There’s oodles of investment, people moving in from all over the world. We’re close to the American border, and trade with the U.S. is booming because of the low dollar.

[1430]

It’s easy for us to discount the north, represented by fewer MLAs, where the population is low and there’s a lot of wilderness. It’s easy to forget them, easy for some to pass up the LNG opportunity in B.C.’s north in a knee-jerk reaction.

I spent all of my elementary school years in Fort St. John in the ’60s. At that time it was a small, tough, muddy northern town. Things have always been tougher in northern B.C. It’s very beautiful country, but it’s a harsher climate. The northern economy has always been more subject to the ebb and flow of international prices for natural resources.

Now Fort St. John, Dawson Creek, Prince George, Prince Rupert, Kitimat and many other places will have the chance to make it big. B.C.’s north deserves the chance to thrive and to grow — not just Vancouver and the Lower Mainland. Let’s not be stingy with the north just because we in the south have it good.

I note here that even the member for Skeena, a member who represents a vast riding in the north, will not stand up for the north. He represents Prince Rupert and Kitimat, some of the cities that will benefit most from the agreement. He doesn’t even represent the interests of his own riding, and I think certainly not his own political interests. To me, it is positively stunning.

Now on this side of the House we’ve made our choice. We will not so easily rain on someone else’s parade or shut down another’s opportunity. We’re standing for northern development. We are here to seize this opportunity on behalf of the people of northern B.C., to say yes to development, yes to long-term economic certainty, yes for all British Columbians to everything we enjoy here in the Lower Mainland.

I will be happy to support this bill. I also look forward to supporting it in the election to come, where in less than two years the voters will have their say. They’ll be able to make their judgment on the decision we are taking here. I look forward to that day, because I believe that British Columbians will want to say yes — yes to LNG and no to NDP.

D. Eby: I’m going to read some partisan rhetoric. I’m sure it’ll be….

This is “a bad deal for B.C.”

“The fine print of that deal will commit our province to a course that is environmentally reckless, fiscally foolhardy and socially irresponsible….

“We should not accept this deal that would enshrine an unprecedented 25-year tax giveaway to state oil companies from Malaysia, China, India and Brunei and also to Japex. We should not accept this deal that effectively obliges all B.C. taxpayers to underwrite those companies’ risks as it also pads their profits.

“We should not be content to let the government sell out British Columbia’s long-term capacity to appropriately manage, tax and regulate our most valuable non-renewable resource or to properly price and minimize the massive greenhouse gas emissions that will result from LNG exports. Nor should we accept that the price for attracting any LNG project is a deal that amounts to a wholesale sellout of our provincial sovereignty.

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“Yet the Pacific NorthWest LNG project development agreement with Petronas and its partners would do all of this and more. In its totality, it is a deal that played our government decision-makers” — and I apologize, Mr. Speaker, but I’m quoting — “for suckers….

“Under no circumstances should we effectively consign away our ability to set LNG-specific carbon taxes or to impose new environmental regulations aimed at curbing greenhouse gas emissions that will skyrocket because of that industry. Taxpayers should not have to foot the bill for strengthening such industry-specific measures and subsidizing companies’ profits.

“There was a time not long ago when the B.C. Liberal government said it opposed business subsidies. This deal enshrines the worst type of subsidy. It would entrench a guaranteed 25-year tax expenditure that exposes B.C. taxpayers to unknown future unfunded liabilities that may flow from future needs to strengthen environmental protection. What is the value of that expenditure? We will not know until it becomes our cross to bear….

“The last thing we should be doing is putting in place long-term guarantees that freeze the rules and costs for pollution and negative environmental impacts in perpetuity. Yet that will be a hard, practical consequence of the Pacific NorthWest LNG project development agreement.”

[1435]

Where does that come from? It comes from Martyn Brown. Who was Martyn Brown? Who was that person? Who was Martyn Brown? He was former B.C. Premier Gordon Campbell’s….

Interjections.

Deputy Speaker: Members.

D. Eby: I know why this is uncomfortable for the other side. I know why they don’t want to hear this.

Interjections.

Deputy Speaker: Order, please. Order.

Member, continue.

D. Eby: Martyn Brown was former B.C. Premier Gordon Campbell’s long-serving chief of staff. He was the top strategic adviser to not one, not two, but three provincial party leaders, and he was a former deputy minister of trade and investment in British Columbia. He was a proud B.C. Liberal.

When someone like Martyn Brown comes out and, in this strong language, sets out the problems with this deal, clearly the issues go far beyond the simple story that the other side is telling. For some reason they are unwilling to listen to these concerns about enshrining this sweetheart deal into a 25-year agreement.

I had the opportunity recently to hear a speech from the President of the Panamanian congress. I think in Panama and South America there’s still a poetry around politics that we haven’t seen here for a while. During his speech he said….

Interjections.

D. Eby: Remarkably disrespectful comments about the Panamanian people.

In any event, during his speech he set out the guiding principle by which he governs all his decisions as a legislator. He said: “I want to represent my country in a way that I will be my son’s hero.” That’s a remarkable quote, and it’s not just poetic. I think that they’re inspirational, certainly to me as a new father. I know for many people in this place with grandchildren and children and nieces and nephews, they’re thinking about the next generation when we sit in this place and our role as being heroes to them, that we are setting them up for success in the future.

I think we can all agree there’s a considerable natural gas resource in our province. Petronas, at least, according to the government and that gas company’s math, is considering investing $36 billion U.S. dollars to access that resource. It’s valuable. It has worth. It belongs to every citizen in British Columbia. And developing it brings with it very real challenges — environmental challenges, economic challenges, development challenges.

If we put this deal that’s being presented to us today against the test that was set out by that very poetic legislator, would our children look at this deal and say: “Yes, this is a deal that makes you a hero to us because you put our interests, the interests of the next generation forward, ahead of your own”? I think it’s very hard to make the case that it does.

From an environmental perspective, we’ve abandoned measurement of 70 percent of the emissions of this proposed project. Right now we’re seeing record temperatures, wildfires, ocean acidification. What will the world look like for our children as we abandon these regulations — the existing regulations, not even the tough regulations that are coming by international agreement?

Beyond that, how will we explain to them that we will need to use public money intended for schools, for hospitals and other public services to subsidize an oil and gas company, to subsidize them for regulations we would put in place to control carbon pollution, to control climate change? Does that sound heroic?

We are handing over as much as 18 million tonnes of LNG per year for export and perhaps an additional 25 percent burned for processing. What will we get in return?

From a jobs perspective, where we have more young people out of work and school than any other province in Canada, this deal presents absolutely no job guarantees for British Columbians. These are basic guarantees that other countries were able to negotiate in their deals. When we hand over a public resource of this size, the least we could do is ensure employment for British Columbians.

Even before this deal was presented in the House, Petronas was in the media saying: “Finding enough qualified Canadians won’t be easy.” The Globe and Mail reported that they were pressuring suppliers to use every-

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thing from engineering services to legal services to raw materials sourced from low-cost jurisdictions — in other words, not British Columbia. Could we be any further from heroic at this stage?

[1440]

We know how we got here. The Premier made absurd promises about the LNG industry that she could not deliver, and she couldn’t go back to electors without something in hand. She put our province in a terrible negotiating position.

When Petronas threatened to walk away, what happened? Well, the Minister of Natural Gas and the Premier cut the LNG income tax in half. They introduced a new natural gas tax credit to reduce the corporate tax.

Interjections.

D. Eby: This is very difficult news for the other side, I know. You can tell when we’re getting close here, because the other side gets louder. They can’t wait for their turn. They can’t wait for their turn to respond.

They reduced environmental regulations, restricting greenhouse gas emissions, and they presented an unprecedented 25-year guaranteed royalty deal, negotiated at a time when natural gas is at a historic low price. That is what this government is presenting for us to say yes to. Astounding.

Handing over a public resource for electoral advantage to cover up for promises made that could never be delivered on is a long way from heroic. I believe we should be governing in a way that our children will see us as heroes for stepping up and ensuring that their generation will be better off than our own, even if that involves temporary sacrifice for ourselves.

What are we being asked to vote on? A deal that sells out the next generation with a locked-in agreement for 25 years at the lowest price for LNG and promises to repay a foreign government Crown corporation if we ask them to comply with future environmental standards. A deal imposed over the objections of First Nations. A deal that hands over a massive public resource without job guarantees for British Columbians.

What do we get back? Well, so far a talking point for when the B.C. Liberal Premier is asked about her unsustainable election promises.

I will not be voting for this deal, because I wish to represent my community in a way that I will be a hero to my son and to the next generation, and this deal is the complete opposite of that principle.

R. Sultan: Bill 30, the Liquefied Natural Gas Project Agreements Act, will provide an additional measure of certainty to agreements the government has entered into with LNG project investors in B.C. Today certain levels of tax and regulation — carbon taxes, greenhouse gas regulations, LNG taxes and natural gas tax credits — are important elements of the 140-page agreement this government has entered into with LNG investors. However, future governments might have different ideas.

Accordingly, Bill 30 will indemnify investors with respect to additional taxes they might be asked to pay in the event laws are changed in the future, or with respect to additional costs which might be incurred through changes in greenhouse gas regulatory regimes specific to this particular industry. It should be noted, however, that such indemnification does not apply to possible future changes in provincial sales tax, corporate tax or other revenue measures generally.

Such legal assurances have been necessitated by the doubts and criticisms, if not hostility, which members opposite have articulated and which do not build investor confidence. The legal assurances are further justified by the unprecedented magnitude of the forthcoming private LNG investment and the corresponding risks. We are talking a totality of $36 billion U.S., which today translates into $45 billion Canadian.

For comparison, the building of the Canadian Pacific Railway in the latter 19th century would be priced at a mere $5 billion to $6 billion, inflated to dollars of today. The St. Lawrence Seaway of the 1950s would today carry a similar price tag. The original Mackenzie River pipeline — which I happened to work on — billed as the megaproject of the century, was estimated to cost a mere $4 billion. We thought those were mind-boggling numbers at the time, in the late ’70s, which translate into about $18 billion today.

[1445]

We are today debating an LNG project whose dollar magnitude dwarfs the building of the railway connecting British Columbia to the rest of Canada, the seaway connecting the Great Lakes to the Atlantic or the original proposal to tap into the Arctic natural gas.

So we are talking about a big chunk of money, and it is not taxpayer money. It’s not even, in the main, Canadian money. It’s money from abroad.

Who are these people? The lead investor of Pacific Northwest LNG is Progress Energy Canada Ltd., wholly owned by Petronas, an oil and gas company wholly owned by the government of Malaysia and the 75th largest company in the world.

The Financial Times has identified Petronas as one of the new Seven Sisters, as they call it, the most influential and mainly state-owned national oil and gas companies from countries outside the OECD. We’re not dealing here with a bunch of Calgary wildcat drillers.

Petronas has attracted several partners: PNW LNG Marketing Sendirian Berhad, a Malay subsidiary of the project; JAPEX Montney Ltd., a company of Japan Petroleum Exploration Co. Ltd.; Petroleum Brunei Montney Holdings Ltd., wholly owned by the Sultan of Brunei — no relative; IndOil Montney Ltd., the wholly owned affiliate of Indian Oil Corp. Ltd. based in New

[ Page 8960 ]

Delhi; Sinopec Huadian Montney Limited Partnership, a subsidiary of China Petroleum and Chemical Corp., Asia’s biggest refiner, based in Beijing; Sinopec Huadian Canada, part of Sinopec Canada, another subsidiary of China Petroleum and Chemical; as well as Sinopec Daylight Energy and Huadian Canada LNG.

So what we are dealing with here is a partnership consisting of a cross

section of the oil and gas organizations of Malaysia, Japan, Brunei, India, and China — representing, in terms of their countries of origin, almost 30 percent of the world’s population. We are fortunate to have investors such as these. Most private investors shelve their investment plans during the lean years. These sorts of investors choose not to. It is perhaps why they are in fact supremely profitable organizations.

There is much talk today about Canada signing on to the Trans-Pacific Partnership, TPP, a proposed trade agreement among the major Pacific countries on a variety of matters. While Ottawa has been spending years developing TPP, British Columbia, led by our Premier, has in a much shorter span of time, through pushing and prodding all of her ministries, chasing some of them back and forth around the Pacific Rim, set the stage for a significant investment agreement among many of the same parties.

My colleagues, this agreement is a very big deal, entered into with some very significant global players. It’s a deal which will change the economic profile of Canada, and it comes along at an opportune moment in our economic history when conventional oil and the oil sands are stumbling a bit and dragging down our numbers.

Of course, the opposition party doesn’t see it this way. They ask — and they should: “What’s in it for British Columbia?” They describe the whole affair as a “political mess” created by overly grandiose political promises and — to cite further, one prominent front bencher on the other side — as simply “better than nothing” and “a giveaway.”

Is the whole enterprise as ill-conceived as members opposite say it is? Let’s see what McKinsey and Co. have to say. I’m sure most of you know McKinsey, a very respected American strategic consulting organization of considerable reputation. They considered LNG in their journal of July 2014, so what I’m going to quote from them saying is one year old.

[1450]

It’s an

article with a headline: “Capturing Value in Global Gas: Prepare Now for an Uncertain Future.” Their point is really summarized in their lead subheading. “There is huge uncertainty about how global gas markets will evolve, but the extent of the value at stake makes it imperative for liquefied natural gas suppliers and buyers to act now.” Let me quote, quickly, three or four paragraphs.

“Unforeseen events have disrupted the gas market in the last eight years but paradoxically lent it a degree of stability, for the time being, at least. The shale gas boom in the United States, rapidly increasing Asian demand and the European economic crisis have driven huge price discrepancies among regional markets. The influence of these three disruptions is not likely to wane before the turn of the decade. But then what?

“Enormous value is at stake. Depending on how factors such as Asian demand, oil prices or North American exports play out, our analysis suggests that value creation in the global gas industry in 2030 could be anywhere between $310 billion and $725 billion, compared with $340 billion in 2011. This $415 billion difference in potential outcomes in a single year suggests very different prospects, not only for the industry as a whole but also for different participants, as the value gains will by no means be evenly spread.

“LNG, while only accounting for 10 percent of the global gas market currently, will be a key determinant of gas market prices generally and eventual value creation, as it is the only supply source mobile enough to plug supply-and-demand gaps in international markets. At the moment” — and this was a year ago — “it is in short supply. But because uncertainty about future prices has made buyers reluctant to sign new long-term contracts under traditional terms that link gas prices to oil prices, developers of gas reserves outside North America have been hesitant to sanction new LNG facilities, particularly as LNG project costs are rising rapidly.

“This may seem prudent in the face of so much uncertainty.”

Here’s the punchline.

“But by doing nothing, LNG developers risk forgoing future profitable supply opportunities, and LNG buyers risk extending the current supply shortage. While there is no denying the challenges that uncertainty poses in the industry, those most likely to prosper will be the participants that understand the uncertainties, anticipate market developments and build robust strategies capable of adapting to what the future holds.”

If that isn’t a McKinsey and Co. endorsement of what the Petronas partnership and British Columbia has entered into, I don’t know what is. But so much for the business case. Let’s turn now to the public policy issues, and they are big ones. Many of them have been raised in this House — jobs, government revenue. I’d throw in also balance of payments.

On the jobs front, this investment sets the stage for well over 8,000 construction jobs on the pipeline phase. Upstream drill rig activity with several hundred workers will be ongoing to ensure natural gas keeps flowing to the plant throughout its lifetime. Construction of the facility on Lelu Island itself is estimated to account for about 4,500 jobs.

Once operational, the system will employ, in my opinion, about 1,000 persons, including induced employment in local communities. So much for jobs.

On the balance of payments front, exports of natural gas may contribute at least in the range of $10 billion to $20 billion annually. It could be lower, significantly lower, or it could be significantly higher, which is the point of what McKinsey’s own value forecast indicates. But these will, regardless, help our balance of payments and be a significant lift to our GDP.

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Finally, consider the government revenues. It’s estimated that the province could see almost $8.6 billion in total royalty and tax revenues by 2030, or an average of between $500 million and $600 million per year. This is projected to be made up of royalties, LNG income tax,

[ Page 8961 ]

carbon tax, corporate income tax, PST, motor fuel taxes and property taxes over 15 years.

In comparison to the $500 million or $600 million a year in government revenues which are generated by this project…. Just to put that into context, we can cite forest industry revenues of $700 million actually received in 2014, $562 million in 2013, $474 million in 2012 and $437 million in 2011. So forestry revenues jumped around quite a bit too. But what we can say is that government revenue from this one LNG project will be in the same ballpark, if not exceed, as all of the royalties we receive from the forestry industry each year. Golly, we are creating another forest industry here, with one project.

Let’s deal with some of the other criticisms which have been levied. We hear members of the opposition, even their leader, say: “Why are they doing it? Their timing is all wrong. The market has disappeared. They don’t know what they’re doing.” Well, I find that an interesting point of view.

Here’s a group of international companies which, on a combined basis, probably have a GDP approaching that of British Columbia, and our critics on the left modestly assume they know more about how to run a successful global oil and gas business than they do. So they’re now going to save them from their own bad judgment by cautioning them that they don’t know what they’re doing. I find my vocabulary inadequate to come up with polite phrases to describe this.

Another set of the declaration says: “It’s a fairy tale, a pipedream.” Well, I have a certain tolerance for this point of view since, I must confess, I myself thought the LNG strategy was bold, unprecedented and not without its risks, which is a polite way to describe it. However, my caution turns out to have been unwarranted. It is not a fairy tale. It is not a pipedream. It’s not something dreamed up in the communications shop. Billions have already been invested in proving up the necessary gas reserves in B.C.’s northeast — billions of dollars, serious money. That’s a fact. It’s not a speculation. It’s not a forecast.

Another interesting observation we have heard from across the aisle is: “It’s a sellout. It’s a giveaway.” Translated, this is saying: “Okay. You guys in government got a deal, but it’s a lousy deal. You gave away the family farm.” Now, this point is made by the same folks who say in the next breath: “You guys, the investors, are doing a dumb deal. The market has gone south. It’s not coming back. Your timing is all wrong. You’re making a big mistake.” I would say critics opposite cannot have it both ways. We cannot be exploited and exploiter simultaneously.

Certainly, in today’s uncertain world there’s no lack of reasons to proceed carefully, whether one is on the buy side or the sell side. We all understand that. If in our political opponent’s view there are substantial reasons backing up either position — and, indeed, there are — that may be a pretty good clue that a fair deal has in fact been struck.

Unless, of course, the opposition’s true position and true advice is to do nothing — exactly what McKinsey warned us against, as a matter of fact. I do not believe that’s what is expected of us sitting here as legislators. We have families to feed, government services to finance and investments to be made. To do simply nothing is not why the voters put us into this Legislature. When the opposition has followed such strategy themselves, they’ve either not been elected or, once in office, eventually get tossed out.

To sum up, this project has, in spite of the critics, proceeded to a very tangible and quantified agreement stage. We await the federal government’s environmental review decision. Given the relatively benign nature of liquefied natural gas, I’d be surprised if final environmental approval is not forthcoming.

One final note. Only 30 minutes ago a retired World Bank analyst friend who I respect a great deal — and he knows a great deal about energy and LNG projects around the world — sent me an e-mail. He surprised me, because he’s a confirmed skeptic about almost everything.

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Here’s what he said: “We have an opportunity to add a brand-new industry to B.C.’s portfolio, involving high tech and a lower-hydrocarbon-content fuel to a province with a triple-A rating, an industry which is a step to the future, as McKinsey says, all in a time of global economic recession. Value: priceless.”

Congratulations, government, for a tough, complicated job well done.

[D. Horne in the chair.]

M. Elmore: I’m very pleased to rise and join in the debate on Bill 30, the Liquefied Natural Gas Project Agreements Act, and I’m pleased to give my comments and analysis and also criticism in terms of what I view as the shortcomings of the act. I’ll be voting in opposition to Bill 30 for a number of reasons, which I will lay out.

I’d like to preface my remarks, before I get into the main points of my criticism, with the comment that in terms of our liquefied natural gas sector, myself and also the NDP, the opposition, are in favour of the industry. We’re certainly in favour of the LNG industry and have always said that it has been an important part of our economy for many years. Certainly, within the last number of years, with improvements and technological advancements, it’s proven to be a bigger and more potential part of our energy sector — certainly recognizing that.

But our perspective and my perspective is that in terms of natural resource development, it’s not development at all costs. Our natural resources, which British Columbia is blessed and very fortunate to share…. Certainly, it’s played an important role in our historical development of the province and the country, in terms of the development of our forestry, our mining sector, our fisheries and

[ Page 8962 ]

other natural resources. They have all played a key role and have had an important place in terms of not only our economy but providing jobs that have supported families and that have built our province and are an integral part of our economy and our society.

Certainly, we recognize on the opposition side that the LNG industry also has that role to play but in context of the appropriate stewardship and also leadership on the development of our natural resources.

It’s with the responsibility of not only a kind of blanket, all-or-nothing development, but with the expectation…. I think British Columbians also share this. British Columbians share the value that we have for our natural resources. There’s that collective sense, I think, in terms of recognizing that our natural resources, number one, are a shared resource and the expectation that when it’s developed it should also benefit British Columbians in a number of different areas that traditionally, through successive governments, have been employed.

Some of those expectations we have set out, the official opposition, in terms of the LNG industry. We support the industry but with the expectation that it needs to meet four basic conditions: that there needs to be a fair return to British Columbians, who collectively own the resource; that there should be jobs for every British Columbian who is ready to work or be trained; that there should be protection for air, land and water; and that there should be a true partnership with First Nations.

[1505]

Certainly, it’s a comprehensive view in terms of moving forward for economic development of natural resources. I’d argue that we’ve seen that when we look at the development of our forestry, our mining, our high tech, other sectors, our agricultural sectors. It’s important to have those components integrated in those sectors, in those industries.

Certainly, my criticisms and, I think, the shortfalls and shortcoming of Bill 30…. It does not meet those requirements. It falls far short, and it’s put British Columbians in a position which the government and previous speakers have characterized as: “Well, take it or leave it.”

We have to be prepared to basically agree to Bill 30, where we have seen, I think, the Premier negotiate quite well on behalf of the foreign-owned corporation in a number of different areas. But British Columbians think they are being shortchanged in terms of seeing the full benefits of the development of this industry.

When we look back in terms of how we got to the place where we are today, here in the Legislature summer session debating Bill 30 in terms of the contents of the bill, well, we can look at…. I think it’s important to have an idea of what the context is in terms of where we find ourselves — the bargaining context and the framework for Bill 30.

I think we should look back and appreciate what some of the campaign promises were that the current Premier made in the heat of the previous election as really setting the stage for negotiating this agreement and also putting us, collectively in British Columbia, in a weak bargaining and a weak negotiating position with international companies — and certainly with this current company, for Bill 30.

We heard in the previous election campaign a promise that we would have at least one natural gas export terminal on line by 2015, in Kitimat, and at least three operations by 2020. It’s currently midway through 2015, and I think it’s safe to say that we’re not going to see a terminal up and running. Certainly, that has fallen by the wayside.

We also heard during the election that we’d have five new LNG plants in British Columbia before the end of the decade. We have not seen that.

We have heard quotes from the Premier that the goal and the great promise for development of the industry is that it would create a debt-free B.C. There is the intention to reach that goal of being debt-free in 15 years. That was from 2013. As well, there were promises that development in natural gas would stimulate up to a trillion dollars in new economic activity across the province, with 100,000 new jobs, $100 billion over 30 years and the creation of a prosperity fund.

Those certainly were grand and quite wild promises to have been made. That has created the condition and the circumstances that, I would characterize, did not put us as a province in a strong bargaining or negotiating position given that there was a very clear political investment by the Premier and by the B.C. Liberals to deliver on these promises and to move forward in terms of signing agreements.

That was the backdrop in terms of how we’ve come to this place today. We’ve missed the timelines in terms of delivering on actually having plants up and running. We have not seen the creation of a prosperity fund, and certainly we’ve seen a backtrack from many of those promises in terms of jobs or opportunities coming forward from the industry.

[1510]

The shortfalls and the disappointments that I have in terms of Bill 30 — I’m going to outline them — fall far short of myself, of the opposition and, I would also characterize, of British Columbians in terms of expectations of benefits to be accrued from the development of the potential from a liquefied natural gas industry.

When we look at Bill 30, it certainly can be characterized as a good deal for Petronas but not necessarily for British Columbians. When we look at what has been negotiated in Bill 30, you can sum it up that British Columbians may come to the conclusion that our Premier was negotiating on behalf of the corporations and not necessarily for British Columbians.

We look at the pages and pages of protections for, on the one hand, foreign multinational corporations that lock us into low tax and royalty rates for 25 years — un-

[ Page 8963 ]

precedented. On the other hand, the Premier has required zero job or training guarantees for local British Columbians and also no requirements around local sourcing, which is an important component of supporting our local economy.

British Columbians value our resources and environment, and there’s the expectation that governments should protect the environment, negotiate a fair return for our resources and for future generations and fight for jobs for British Columbians. There’s also the expectation to see First Nations included as partners.

This deal does not appear to reach even a very basic benchmark or a very low standard for approaching expectations on those fronts. In terms of bringing forward Bill 30, it looks like it’s a good deal certainly for the corporation but not necessarily for British Columbians.

One of the disappointments of Bill 30 is that it locks in tax rates for 25 years. It’s being characterized as 25 years, but it’s actually longer than 25 years. The project development agreement, the PDA, provides tax protections that will compensate the proponent dollar-for-dollar for any changes, including the LNG income tax, the natural gas tax credit or the carbon tax, specifically on LNG.

These tax rates are locked in and protected from future increases for 25-plus years. It’s 25 years, but from the period after the company has reached its commercial operations date, which is after the first LNG cargo has been shipped. So the deal is actually longer than 25 years because it will most likely take another five years before the project is built and begins shipping LNG.

It’s certainly unprecedented in British Columbia and also unprecedented in terms of other agreements that were reached in the liquefied natural gas sector in other jurisdictions and in other countries.

We’ve heard that the Premier has quoted — and also the Natural Gas Minister said in the Legislature — that if you’re looking to do it right, you go and look at similar economies. Australia has a similar economy. They just developed an LNG industry. They used project development agreements to help that industry. But if we look at the LNG agreements in Australia as a comparison — if it’s being touted both by the Premier and the minister as a good example to follow — then we see that British Columbia loses out on four main areas.

The agreements in Australia, for example, guarantee local jobs. Our agreement in B.C. does not. Agreements like the Australian Gorgon LNG project contain clauses that guarantee jobs for Australians, saying the proponent must use labour available within Australia. Australia’s North West Shelf LNG agreement has the same provisions. We do not, in contrast, have a single reference to guaranteeing jobs for British Columbians.

[1515]

I’ve heard speeches from my colleagues across the way claiming that there’ll be jobs available for British Columbians. Certainly, jobs will be needed, and workers will be needed to do that work of construction. But the difference is that there’s no requirement for the company to hire local hires, and it has already been indicated that it could use up to 70 percent of workers from overseas.

We look at the record of the B.C. Liberals in terms of their open-door policy for temporary foreign workers coming into British Columbia with no legislative oversight — certainly, pretty much hands-off to having them come in and a lack of accountability and a lack of leadership for governing temporary foreign workers. I think British Columbians do not feel that they are encouraged by the promises from the government that these jobs will be filled by British Columbians. That has not been the record, and it is not set out in the agreement.

British Columbians have the expectation that the B.C. government signing agreements will ensure that British Columbians benefit. There’s been a promise by the Premier and by many colleagues across the way that jobs will be available for British Columbians. But the shortfall is that it has not been put into the agreement, and it has not been assured. And there are no mechanisms to enforce that. So when we look at….

What are we asking for? The government is asking us to take them at their word and to believe their promises that British Columbians are going to benefit and that there’ll be jobs for British Columbians. Well, that has not been the record of the government, and it is also a shortcoming of this bill that jobs for British Columbians are not ensured, that training opportunities are also not ensured and that it’s an open door — leave it to the proponent, up to 70 percent — to bring in cheaper workers from abroad.

That is one of the shortfalls and one of the very clear reasons why I’ll be voting against Bill 30. In addition, when we look at a comparison between the agreements that have been signed in Australia, for example, we see that B.C. loses out in terms of ensuring that local labour is hired. So we miss out there. British Columbia loses, thanks to the very weak negotiating of the Premier and of this government.

When we look at the use of local services….

Interjections.

Deputy Speaker: Members. Members. The member for Vancouver-Kensington has the floor, please.

M. Elmore: We look at what are some other opportunities that the government has and the expectations that British Columbians have for the government to advocate and to negotiate on behalf of British Columbians and really see benefits to British Columbians. For example, when we compare with Australia the use of local services, buying local, local procurement, that’s another area in project development agreements that can be written in and that can be required for foreign companies.

[ Page 8964 ]

Again, we see that British Columbia and British Columbians are missing out and sold out by this Bill 30. We are seeing British Columbians not seeing the benefits from Bill 30, of ensuring that British Columbians are assured that they have access to jobs. We’re seeing the lost opportunity for local procurement and the use of local services and buying local for our local businesses. And we’ve heard that the proponent may also negotiate and be bringing in offshore consulting and engineering firms for their project.

[1520]

So, certainly, many areas that…. Given that British Columbia has an internationally renowned consulting and engineering industry, that’s certainly an area that has not been represented in Bill 30 or advocated on behalf of.

In addition, we see that in Australia, for example, conservation was included and funded, that the agreements contained environmental benefits, and Bill 30 in British Columbia does not. In the Gorgon LNG deal in Australia, there’s a clause where the proponent must pay tens of millions of dollars for ongoing programs that provide net conservation benefits, and Bill 30 contains zero clauses that benefit or protect the environment.

It’s bad enough that we do not have any clauses that protect the environment. To make matters worse, it protects the company from increased costs if B.C. moves to improve environmental regulations on the LNG industry for 25 years. Not only have we not met a minimum bar in terms of protecting the environment, but we are actually dropping that standard that other jurisdictions have signed. Very disappointing.

We are seeing that on a number of fronts this deal does not only not meet minimum expectations, but it can also be argued that it drops the minimum standards. We don’t even meet minimum standards that have been reached in other jurisdictions in terms of project development agreements signed in other countries.

We’re seeing that we are tied in for 25-plus years in terms of tax rates. We are seeing that environmental regulations are also tied in for 25-plus years, and we have no job guarantees or apprenticeship quotas for British Columbians. And that’s a real shame.

When we look at previous governments, different governments, when there are significant investments in project development, that is one area where governments have the opportunity to ensure and support British Columbians — not only in terms of having jobs but gaining skills, important skills — and that is around ensuring that there’s a negotiation around apprenticeships that industry has to sponsor.

That’s a real opportunity that we’ve seen in previous project development agreements. It’s a real shame, and it is just a real…. I would characterize it as a disappointing lack of respect for British Columbians and a lack of opportunities.

When we talk about the opportunity of developing this natural resource, we should ensure that British Columbians are able to share in that and not only have jobs but really gain skills to develop their expertise, develop careers in the industry and also be able to transfer those. It’s just a real shame that the government — shortsighted, and because they’re so desperate to sign an agreement — did not assert that there should be apprenticeship positions included in the construction. That’s a real missed opportunity.

We have no environment protections. We have this agreement that ties the hands of future governments, so there’s no specific revisitation clause or opt-out clause for future governments on the one hand. However, we see that the proponent has an opt-out clause that merely requires them to give 90-days’ notice, so that’s a real….

[1525]

It’s just so lopsided, in terms of when we have this resource, liquefied natural gas — and it’s in the ground and belongs to British Columbians — and the opportunity to develop it, that we, at every mark….

When we look at, really, the standards, in terms of how other jurisdictions have developed their industry, and when we look at industrial development even in other sectors, it’s a real missed opportunity, in terms of ensuring that we see advantages and we see opportunities for British Columbians.

We have, as well, the me-too clause. The PDA includes a most-favoured-nation protection provision, which says that for a period of ten years after the deal is signed, if a different LNG proponent comes along and gets a better deal, then the proponent will retroactively get the same benefits and the PDA will be renegotiated to address the more favourable position. This means the deal could get even worse for British Columbians down the road, and this provision could have huge unforeseen costs in the future.

It wasn’t enough that this government had to negotiate this substandard deal, which is laid out in Bill 30, but they also had to include the me-too clause, the most-favoured-nation protection, that ensures that we may potentially be seeing worsening conditions and decreasing benefits from an already substandard agreement in the future.

We see, when we evaluate this bill on those many areas…. I outlined it in the beginning of my remarks in terms of, I think, what set the context. It’s the bargaining, negotiating framework really lending to this weakened position for British Columbia — to not benefit on many different areas really being laid out because of the promises by the Premier and the Premier’s political timelines being the driving force and driving factor, and not on behalf of benefiting British Columbians.

It’s a deal at any cost, and it’s a deal that just really, when you look at, makes you shake your head. It also doesn’t meet the expectation…. Certainly, we’re seeing not only the view that First Nations should be included as true partners but also that it’s a legal requirement with the recent decision in the Supreme Court.

[ Page 8965 ]

We see that the deal is signed between the province and Petronas, but First Nations are not included as true partners. They’re only mentioned in the appendix under “Other matters,” and that’s no small matter. It’s quite significant.

We have significant opposition from First Nations in the area, which is also a shame. That will be an area where I project the bill — and also the development of the project — will have difficulty, as not meeting that. We have a lack of respect, I would characterize, with the failure to include First Nations as true partners.

As well as outlining the many other shortfalls in the bill, we’re seeing — and it’s my view — that this bill currently does not meet expectations and it’s a bad deal for British Columbians. I would sum it up by saying that this is a deal that benefits foreign-owned corporations and not British Columbians. We’re seeing the province bend over backwards in terms of ensuring that rates and tax breaks are given to a foreign corporation on the one hand, contrasted to British Columbian families paying more with the recent budget.

[1530]

We also see that we have zero job or training guarantees, zero requirements for local sourcing. We see that the government has failed to protect the environment and failed to negotiate a fair return for our resources and our future generations. As well, First Nations have not been included as true partners.

For these reasons, I will be voting against Bill 30 and advocating for the government to take…. Hopefully my arguments will be persuasive with the government to take these seriously and to negotiate a deal for British Columbians.

Hon. P. Fassbender: I rise in support, as I’m sure everyone in this House is well aware, of Bill 30, the LNG project development agreement enabling act, 2015. I’ve sat in the House in the last couple of days and listened to the opposition waxing on, as they often do, without any real substance to their arguments. It’s obvious that they have no economic policy. They have no vision for the province of British Columbia. They’ve proven that time and again.

I’m delighted to see that in the last day and a bit they’ve developed four criteria that they would like to see. Of course, the Leader of the Opposition, when he first talked about this particular act, said that he was very, very well aware of their responsibility to vote against this particular piece of legislation, and he hadn’t even read it. What is obvious to me is that the members opposite, when they get up to speak to the bill, have not read the bill, are not aware of the implications, have not really seen what the potential of this is.

The bottom line to this is that the NDP proves time and time again to the people of British Columbia that their motto is: “No development, no progress, no opportunity for job growth.” That’s what they stand on. Again with this act, they are proving that same philosophy.

They talk about Australia and ironclad guarantees. Well, I’ll tell you, you could drive a whole mob of kangaroos through that particular language, because it is not specific. It does not offer any guarantees when they use language of “except in those cases where…it is not reasonable and economically practical to do so”; “using all reasonable endeavours”; “as far as it is reasonable and economically practical to do, use the services” of Australian professionals; base specifications, tenders and contracts on Australian standards and codes “except where it is impractical to do so.”

Interjections.

Hon. P. Fassbender: I appreciate that the members opposite don’t want to hear the facts. I appreciate that they don’t want to know the reality of what is going on in the rest of the world.

Let me say this. The members opposite speak of the last election and promises made. I can tell you that the Premier of this province and the members of this government cast a vision for the people of British Columbia for economic growth, for job growth, for educational advancement, for ensuring that we give the best opportunities to our citizens that we can by casting a clear and decisive vision for the future of British Columbia.

[1535]

Liquefied natural gas is an important and generational opportunity for the young people of this province for generations to come. To miss that opportunity would be a travesty.

In the last session of the House, when we were debating the tax act around liquefied natural gas, the members opposite suggested that we should just delay another six months and work out more of the details at that time. That is typical of not wanting to make a decision, about delay tactics which would destroy the opportunity that is clearly before us in British Columbia as a result of the liquefied natural gas proponents that are working with us.

I want to say this. I am proud to be a member of a government who has a Premier, a Minister of Natural Gas, a Minister of Jobs and a Minister of Aboriginal Relations and Reconciliation who have worked very, very hard to lay the foundation for an agreement that is going to benefit every single British Columbian today, tomorrow and into the future.

The suggestion that we have not engaged the First Nations is so false that it drives me absolutely crazy. I have sat with the minister responsible, and I have watched how hard he has worked in meeting with First Nations — along with the Minister of Natural Gas, along with the Premier — sitting down and talking about the generational opportunity for First Nations and aboriginal youth as a result of what this opportunity provides.

[ Page 8966 ]

Have those discussions been easy? No, they haven’t. But we have had a number of agreements with First Nations along the pipelines, dozens of those agreements. Yes, there are still some that have more questions. But we’re committed to continuing to work with those First Nations and aboriginal communities to make sure we give them that future that we have promised them.

We talk about the benefits of this particular project. Pacific NorthWest LNG represents a total investment that has been said time and time again…. I believe the people of British Columbia need to understand this. When we talk about billions of dollars, that is a number that most people can’t relate to. But the reality is that the investment of $36 billion U.S., $45 billion Canadian, is the largest single investment in the province of British Columbia, if not Canada, and that benefits every single citizen, as I have said, now and into the future.

The other benefits in terms of direct jobs — 330 direct, operational, long-term jobs for one project. And this isn’t going to be the only project. This is the beginning of the future for British Columbia when it comes to liquefied natural gas. There are also 300 local spinoff jobs that come off of that. There are up to 4,500 jobs at peak construction period. People that are in apprenticeship programs today will be given the opportunity to have meaningful employment, put their skills to work and show that they can have a future for themselves and for their families.

Under the tax and royalty framework that we’ve talked about here, by 2030 on this project alone the province could see almost $8.6 billion in total royalty and tax revenues: royalty revenues of $3.64 billion; LNG income tax of over $697 million; corporate income tax of $1.2 billion; PST of $1.26 billion; motor fuel tax of $462 million; and property tax to local government of $253 million.

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Now, when the Minister of Finance got up and spoke to this bill, he said he was probably as excited as he’s ever been in his time in this House over this particular initiative and the legislation that is before us. It is a generational opportunity. This government has shown — not only with this, but with the Site C decision, with other decisions that we’ve had to build the economy, the hard work we’ve done with educational institutions to provide the educational outcomes that our young people need — we are on the road to success because of it.

But you know, again, the opposition, without really understanding economics — and they don’t…. The PDA does not provide the proponent any assurance on the laws of general application, such as changes to provincial sales tax, carbon taxes or corporate income tax. The government can alter these taxes generally but not specifically in the LNG sector. Why is that? That is to ensure the future of this industry in a very competitive and volatile world stage.

I heard previously from members across the way: “Well, this is a pipe dream. It’s not going to happen. It’s never going to come to fruition. Look what Russia just did with China. The market is going to dry up.” If you look at the economists’ reports on the future of liquefied natural gas in the world, it is a growing sector. The demand far exceeds any of the supply that is in the pipeline now or projected in the future. That is why British Columbia needs to be at the forefront in North America in leading the charge on making this industry a reality.

From my perspective, I look at it, and I look at what we tried to do in my ministry alone, with education. There is a pivotal role for my ministry in the LNG as well. We’re at the start of a path that leads to lifelong careers in the LNG industry for young people. In the language of the industry, you can say we are the upstream of that industry. I know that the Minister of Jobs and the Premier and the Minister of Natural Gas, when they met with the proponents, made the commitment that we are re-engineering our education system in the K to 12 and the post-secondary to meet the needs of the future, but not just for that industry.

Those young people that will be involved in working on the construction of the LNG pipelines…. Once they are finished that, because our economy is going to continue to grow, those skills will be able to be used in other sectors of our economy, and they will benefit, as will their families.

We know that the spinoffs from this will not only affect just that industry. There will be more accounting jobs. There will be more nursing jobs. There will be more marketing jobs. There will be more office managers that are required. There will be more software and technology jobs. All of these are in part going to be fuelled by the LNG industry as one of the major pivotal industries of this province.

It has been made very clear by the Premier, by the Minister of Finance, by the Minister of Jobs, that we recognize we have other industries in this province, but they will all also benefit from growth in the LNG industry. That is why British Columbia is seen as a preferred destination for companies to come and invest their significant resources in the future of their companies and the people that they’re going to employ.

There is no doubt in my mind that the province is going to work with the proponent to develop the roads, the public services and the utilities infrastructure that are not only relevant to the project but will also benefit the communities around them.

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We have also initiated the northwest community readiness study to ensure that communities and provincial service providers are prepared to meet those needs, which will also mean additional jobs and growth and will ensure the safety and social service demands that are coming from the growth in our province. This bill is the beginning of another phase of a tremendous future in this province.

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Again, the members opposite…. I remember when the first balanced budget was being brought into the House for debate. They said it was not a balanced budget. It was not real. Well, we’ve had the third balanced budget in this province. Why is that? Because we have a vision for the province. We will go after that vision. We will encourage it. We will partner with those people who have the foresight to invest in this province.

The No Development Party across the way can continue to try and put fear into the hearts of British Columbians, but they know that we have a vision for the future, and that vision is for their prosperity and the prosperity of their families.

V. Huntington: We are called to session this summer to pass Bill 30, the Liquefied Natural Gas Project Agreements Act, on behalf of the Pacific NorthWest LNG project.

The government hope is that we’ll have some photo ops with shovels in the ground before the year is out or, perhaps, since the long stop date is two years from now, at least before the next election.

I supported the LNG Income Tax Act last year. I have indicated a number of times that I support an LNG industry that is built upon environmentally responsible extraction and transport with a more than fair return to British Columbia and its citizens.

When the LNG Income Tax Act was passed, it was already becoming clear that B.C. was not going to get what the Premier had originally declared, given the ultimate tax rate was half of what had been touted. But still, I supported that tax act, because the extraction infrastructure exists in B.C., because the revenues would benefit the province and because I do think there is the potential to assist with the worldwide transition to a cleaner fuel.

Of course, that transition comes with consequences, huge consequences, in terms of the emissions associated with the extraction and processing of natural gas. Our government has, as it develops this new industry, a moral responsibility to protect the people and the environment of this province to the greatest degree possible. Thus, I did not support the government’s LNG emissions legislation or the spring amendments that set the stage for long-term royalty agreements.

At the time, I said that British Columbians don’t want this industry at any cost. They don’t want to support LNG at an embarrassing loss. I still believe that’s true. They don’t want LNG at any environmental cost. They don’t want to support LNG without guarantees that the jobs really are for our own citizens — or wondering whether training can happen quickly enough at this point to ensure British Columbians can be expert enough to qualify for the latter stages of construction.

I’m forced to say that I believe the PDA before us and the future project agreements that are supported by this legislation represent a potential loss to the people of B.C. that will be unacceptable as time goes by.

The government mantra is certainty and fairness. Certainty for business I can understand. Stability for international investors I can understand. But a 25-year agreement that is limited solely to a financial guarantee for business and a much reduced financial benefit to British Columbia is difficult to swallow. That is nothing but a certain giveaway. That is not fairness for our province.

Is Bill 30 ensuring, guaranteeing any of the value-add we have a right to expect from such a massive project, a project that the government loves to say stands alone in its investment magnitude? I don’t think it does. In fact, I think it may be a future liability of crippling proportion.

The PDA is a 25-year agreement. This bill says these LNG development agreements can’t be longer than 25 years. I expect that’s going to be the standard our government has now set for the development of this new industry.

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If circumstances changed, just as they have changed in the world market for oil, if prices rise and Pacific NorthWest LNG sees profits beyond their wildest dreams, there is no meaningful chance that our government can ensure that British Columbians also reap those rewards.

This agreement prevents government from re-examining the fiscal environment, even in a windfall circumstance. How can that be “ensuring British Columbians get their fair share of the resources that belong to them”? That is a quote from the Premier herself, as she outlined one of her three expectations yesterday.

Another expectation the Premier has is: “Fairness. Ensuring business has certainty.” But where is the fairness to British Columbians? Lower returns than originally promised. No guarantees for a transition to domestic labour. No ability to react to fiscal environments. A loss of sovereignty in the very area that makes government, government: the ability to tax.

Yes, we will have a new tax that will contribute, over 25 years, a purported $9 billion to the provincial budget. Of course, the tax regime is so complicated that it needs a chart to understand the expected annual revenues, and it may be some time before we pass the period of capital cost allowance and actually see the revenues anticipated. Ten years perhaps?

Of course, B.C. could alter the LNG taxes at the cost of millions of dollars in compensation should the financial consequences to the companies exceed a certain threshold. It’s nice to see that the compensation thresholds, at least, aren’t set in stone in this bill, although they are in the Pacific NorthWest LNG agreement. Perhaps one could be led to believe the government might raise the threshold for future project agreements and give itself more flexibility. That, I suspect, would not be agreeable to any new proponent, who certainly won’t want less favourable terms than Pacific NorthWest LNG.

The PDA is an agreement that locks in our climate policy by limiting the ability of future governments to bring in additional specific controls on LNG GHG emis-

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sions. This is particularly troubling because it involves an industry that has the potential to make our climate targets effectively meaningless. To prevent a response to the demands of climate change over a 25-year period in an industry that will make our provincial targets meaningless is simply and utterly not in the public interest.

Government has to be able to respond to a specific industry. How can it tie its own hands behind its back in the face of pending global unrest? Does it really believe that extraordinary change in our environmental circumstance is a long way off? What if we need the Peace to grow our food, to feed the country or the continent? How do we stop the impact this industry has and will continue to have on our land? What if we need the water more than the power? How will we stop the impact this industry has and will continue to exact on our northern water supplies?

How can we turn our backs on a global demand for carbon emissions control? Yes, LNG is better than burning coal or burning oil. Yes, it is a cleaner fuel. That doesn’t mean the government should just lie back and think of England.

Our government has a sworn obligation to maintain its ability to govern in a sovereign manner, independently and always in the best interests of the province. That is its sworn duty. That is the expectation that people have when they go to the polls, yet Bill 30 also ensures that future agreements include protections from changes to the government’s own LNG environmental incentive program. That’s the program where proponents are subsidized to meet the government’s bare minimum emission standards. Why are we subsidizing proponents if they try to meet our minimum emissions requirements? Why are we protecting them in law from changes to those standards?

If the government wants to say it has the cleanest LNG in the world, then it should legislate tough standards, tough fines and tough enforcement — not set unrealistic, uncompetitive standards that we end up paying a proponent to meet. The standards set by the government do nothing more than let it say over and over that we “will have the cleanest industry in the world.”

It is a fraud. Petronas has obviously convinced the government that the industry couldn’t be competitive with the cleanest standards, so the pretence was created. British Columbia will pay industry to use new technology that will lead us to the promised land of cleanest. How utterly irresponsible is that?

Best practice should be standard practice — period. It should be the cost of doing business in an industry that has such significant impact on our environment. The subsidy is bass-ackwards. We should be subsidizing producers who want to drop below the minimum standard, not subsidizing them to reach the minimum standard.

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A lot of the government support for this bill is around the word “certainty.” Do the bill and the PDA provide certainty? I suppose so. Certainty for the proponent and certainty for the price it exacts from British Columbia — unless the proponent decides it wants out and gives the province 90 days’ notice.

This spring, while debating the Miscellaneous Statutes Amendment Act, I lamented the secrecy around these agreements. It is still unfortunate that according to this bill, the substance of the negotiations will not be known until after the project agreements are ratified. They’ll eventually be public via order-in-council, but if the government negotiates a bad deal for B.C., we won’t know about it until it’s too late — public after the fact.

That’s what’s so laughable about the statements from the Minister of Finance about openness and how responsive the government is being to accusations of secrecy. “Here, in this most public of places,” he said, “is the agreement for all to see and for all to comment, debate and criticize.” But we all know that the reality of Parliament in this province is an autocratic approach to decision-making. It doesn’t matter what we say. It’s all after the fact.

We are not influencing the form and content of this agreement. There is no committee examining this generational opportunity. We are called to session in order to watch government use its majority to undermine the sovereignty of this province. It isn’t democracy at work. It is arrogance at its worst.

This project comes with a significant amount of baggage. On that note, I would like to speak, as many of my colleagues have in this House, to the issue of the “Other Matters” contained in the project development agreement and the absence of anything addressing the other matters in this bill.

When I was briefed on the PDA last week by Ministry of Finance staff — and as most of us have said, I am grateful to those officials for taking such a significant amount of time to brief us on the bill — I had a number of questions about labour, the environment and aboriginal relations, all questions that existed outside the Finance Ministry’s responsibility. I continue to have a number of outstanding questions about how the other matters — big pieces like air quality and GHGs, First Nation interests and property tax regimes — will be addressed.

In the PDA link to this bill neither party has liability for these other matters. I think it an embarrassing abrogation of responsibility when we know it is absolutely possible to include firm requirements for jobs and the environment within a PDA. There is even an “other matters” clause in this bill.

Section 2(4) allows the minister to include “any other terms, conditions or limitations that the minister considers necessary or advisable.”

He can even limit the indemnities under that clause if he sees fit. And, of course, if he wanted to, he could negotiate binding requirements for B.C. jobs and the environment — if he wanted to — but they would likely have been costs to the proponent and as compensation from the province.

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If the government does get around to including real job requirements in its future PDAs, wouldn’t it be nice if it could come back around to fix its earlier agreements? Unfortunately, it won’t be able to, since the revisitation clause only opens up when an early proponent wants in on a sweeter deal that a later proponent is able to squeeze out of government.

Future companies will look to this PDA and say: “Why should we have to guarantee jobs for British Columbians when Pacific NorthWest LNG didn’t?” And the government will say they’re right, of course, and we’ll be saddled with equally vague PDAs.

Actually, the Pacific NorthWest PDA does have a little to say about skills training — five paragraphs that talk about a working group and activities the province has been doing to update our labour force. My goodness, there’s even a reference, however vague, to jobs for British Columbians: “The province has signed the Canada-B.C. MOU on a strong resource economy, an agreement to work jointly on labour market information and programming to ensure British Columbians are first in line for jobs in resource industries.”

It’s a B.C.-Canada MOU, not an MOU with the proponent, for heaven’s sake, and the MOU is over a year old. It talks about a lot of monitoring and work that needs to be done. While it’s mostly generalities, it does get a little more specific than the PDA, even. For example, the MOU says: “Canadians and permanent residents should always have the first chance at available jobs. However, in cases where employers can clearly demonstrate that domestic workers are unavailable” — it sounds like Australia — “employers may seek to hire temporary foreign workers but will need to have a plan in place to transition to a domestic workforce.”

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Where is that transition plan? Why isn’t it part of the PDA, part of Bill 30? There hasn’t been any talk of trying to transition to a domestic workforce. In fact, they made it sound like their intention was the exact opposite when it came to hiring specialists in the latter stage of construction. They are already demonstrating that they believe domestic workers are unavailable, and certainly the president of Petronas made it quite clear that construction costs — read labour costs — are a problem. Those statements were released months after the Canada-B.C. MOU came out last year.

Pacific NorthWest LNG has said that Canadians would make up 70 percent of the construction workforce for the first three years before transitioning to only 30 percent of the construction workforce for the final two years of construction. That is some transition plan to a domest