Premier Christy Clark's Liberal government says future revenues from liquefied natural gas export could eliminate the province's debt and the provincial sales tax.
The government's throne speech delivered Tuesday — less than three months before the start of an election campaign — said LNG export possibilities represent a possible $1-trillion boost to B.C.'s gross domestic product over the next 30 years.
But opposition politicians said that the government is fantasizing about future revenues and has lost the trust of the electorate when it comes to concrete policy issues.
"It's too far down the road for it to hold any water as far as I'm concerned," said Kathy Kendall, NDP nominee for Kamloops-North Thompson. "At this stage in the game, it's fantasy for the future. It's not doing anything about the problems of today."
Clark announced a new B.C. Prosperity Fund that could accumulate between $100 billion and $260 billion in revenues from LNG royalties and business taxes, enough to wipe out the province's current debt of $56 billion by 2028.
"Future revenues will be designated to this fund, ensuring British Columbia families can benefit from the prosperity created by natural gas in our province," said Lt.-Gov. Judy Guichon, who read the government's intentions signalled in the throne speech.
But the government also emphasized that the fund can't be used as a type of slush fund.
"Your government is resolute that the Prosperity Fund cannot become a backstop or excuse for poor fiscal management of government."
The main focus of the fund will be to cut the provincial debt, which costs the province $2.4 billion annually in debt-servicing costs, said Guichon.
The prospect of hundreds of billions of unrealized revenues is more than a pipe dream, said Kamloops-North Thompson MLA Terry Lake. He recently visited Prince Rupert and had a closer look at an industry in development.
"We are on the cusp of something, I think, really unique and a huge opportunity for British Columbia," said MLA Terry Lake. "Here is a way to pay down the provincial debt. We spend a couple billion dollars a year paying down debt."
The fund would allow the province to ensure that the financial benefits of LNG export would be redistributed evenly through social spending.
"It really is within grasp," he said. "It is happening, and we're in a bit of a foot race with other jurisdictions, such as Australia, to make sure it's there by 2020."
Todd Stone, Liberal nominee for Kamloops-South Thompson, said the plan for a fund focused on debt reduction is an exciting one.
"I'm also excited that we're going to launch a conversation with British Columbians about exactly what they would use the fund for," Stone said. Planning for the revenue stream needs to begin now, he added.
"We can sit back and say no to LNG and everything that pops up, or we can say this what I'm for," Stone said.
Kendall said the speech bears no mention of major B.C. industries such as forestry and tourism.
"It seems to require a tremendous leap of faith to think that the throne speech has brought anything new to the debate," she said.
Tom Friedman, Kendall's NDP counterpart in Kamloops-South Thompson, said the speech makes no mention of the film industry, which is faced with possible collapse. He could see no new ideas for addressing labour and skills shortages.
As for visions of future prosperity, deferred accounts of B.C. Hydro's debt threaten to handcuff the province fiscally for years to come, he said.
"I think there's a real lack of trust in what this government has said it would do over the years and has not followed through with," Friedman said.
Lake said details on items mentioned in the throne speech — improvements for urban and rural patients as well as a senior's advocate — will come in next week's budget speech.
"I think it's a recognition that health care in rural areas is challenging. We need to turn our attention to how we can support smaller communities in the delivery of rural health care."
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Recent estimates of the impact of LNG development in B.C.’s north includes the creation of 39,000 jobs over the nine-year construction period and 75,000 new full-time jobs if the five facilities reach full production.
The Liberal government promised in its September 2011 jobs plan the development of three LNG plants in northwest B.C. by 2020. That figure has since been upgraded to five plants, but the completion dates are not as firm, and the companies have yet to make their final investment decisions.
But since last year, major oil and gas companies including Chevron and Shell have invested $6 billion in B.C. LNG projects, including preparing export sites in the Kitimat area.
The LNG projects involve building pipelines from northeast B.C.’s natural gas fields to LNG terminals near Kitimat, where the product will be shipped to Asian markets. LNG is natural gas that is cooled to a liquid form where it can be loaded onto tankers. /CP