B.C. grants $1.2 billion in deep well subsidies to fracking companies in two years: new report

Although the amount of natural gas fracked in the northeast corner of the province has increased by 70 per cent over the last decade, British Columbia is increasingly out of pocket when it comes to collecting on this industry’s resource royalties, according to newly released data

Fracking Farmington B.C.
Fracking operations near Farmington. B.C. Photo: Garth Lenz / The Narwhal

As deep well credits are used to reduce the amount of royalties companies pay to the province when the production process has ended, that means B.C. is increasingly out of pocket even though the amount of gas produced in B.C. has risen more than 70 per cent over the last decade.

The total in the deep well credit account now amounts to $2.2 billion.

Last year, natural gas royalties flowing into the provincial treasury amounted to $102 million compared to $1.3 billion a decade earlier and, although the decline is partially due to falling market prices for gas, the deep well credits are partially responsible for the shrinking revenues, says Ben Parfitt, CCPA resource policy analyst.

“And, with a combined $2.62 billion in credits sitting in the credit account, thanks to the credit program’s 17-year duration, those anemic revenues will be a fixture for years to come,” Parfitt, who is also a contributor to The Narwhal, said.

Oil and Gas Development. Farmington Area.Gas development near Farmington, B.C. Photo: Garth Lenz / The Narwhal

“That’s a huge sum of money and it’s getting bigger each year. It’s high time the province explained why such subsidies are necessary or, if they are not, why they continue,” he said.

The ongoing loss of revenue means less available funds for healthcare, education and other public services, said Parfitt, who spearheaded a battle to force the provincial government to release the data, which was being kept a closely guarded secret.

From grain country to gas land

Deep well credit data withheld for two years

The CCPA made a Freedom of Information request for the figures two years ago, but the Finance Ministry fought release of the documents claiming that the information could not be made public because it constituted sensitive tax information.

That argument was successfully appealed by the CCPA, but last year, the government argued that publicizing such figures would harm the interests of “third parties.”

That was also successfully challenged by the CCPA and — finally — the figures were released.

The figures show that 26 companies received credits and the top three recipients last year, receiving almost half the credits, were the Cutbank consortium, led by Encana, Painted Petroleum and Tourmaline Oil. Between 2005 and 2017 Encana donated $1.2 million to the provincial Liberals and $113,000 to the NDP.

Also on the list of recipients is Petronas Energy Canada Ltd., one of the principal partners in the planned LNG Canada export facility at Kitimat, which is also benefittng from discounted electricity prices, exemptions from carbon tax increases, corporate income tax breaks and deferral of provincial sales tax on construction.

6 awkward realities behind B.C.’s big LNG giveaway

“If you see a pattern here, you are not alone,” Parfitt said.

Continuing the secrecy trend, the Finance Ministry is now fighting CCPA efforts to obtain figures on what each of the companies receiving credits pays the government in royalty fees. The ministry is again claiming the information would be harmful to undisclosed third-party interests, Parfitt said.

“We think it is shocking that we have to appeal such a decision to the Office of Freedom of Information and Privacy,” Parfitt said.

“Royalty payments are a form of rent and are made in recognition that resources like natural gas belong to the people of B.C. There is no reasonable justification for withholding such basic information,” he said.

‘Resources practically given away’

The aim in obtaining the information is to allow the public, for the first time, to compare credits to revenues and ask some necessary questions, Parfitt said.

“Is the government lowering royalty fees and effectively propping up fossil fuel extraction that would otherwise be unprofitable and, if so, at what cost?” Parfitt asked.

Pipeline construction near Farmington

A gas pipeline is laid across farmer Rod Strasky’s land in Farmington, B.C. Photo: Garth Lenz / The Narwhal

The obvious comparison, Parfitt points out, is that, for decades, the public has had access to details of what logging companies pay the provincial government for trees cut on private lands.

“If the dollars paid by Canfor for the trees it logs are part of the public record, then the dollars that Encana pays for the natural gas it extracts from the ground should be part of the public record too,” he said.

“By withholding such information, the public is quite naturally left with the impression that its resources are practically being given away to private business interests with the government’s active and very generous support.”

The deep well credit program, which started in 2003, was initially supposed to cover some of the costs fossil fuel companies incurred when drilling deep or horizontal wells, but such practices are now common, meaning most companies are eligible for the credits.

The subsidies have also raised the ire of Green Party of B.C. leader Andrew Weaver who, speaking in the legislature earlier this year, said that, since the program started in 2003, the program has reduced existing and future royalty liability by nearly $6 billion.

“Why is there not a standard public disclosure of these credits and royalties that are received,” he asked in the House. “There is, for example, for stumpage fees in the province, under the harvest billing system. Why are we not making public the royalty credits that are being claimed here?”

 Weaver, in his blog, said the B.C. Greens are deeply troubled “by the generational sellout embodied in B.C. NDP corporate welfare aimed at trying to attract LNG to B.C.” SOURCE


BC’s Drilling and Fracking Credits a $1.2 Billion Subsidy in Recent Years, Researcher Finds

Tax Fairness Now!

Image result for the monitor: tax fairness now

Taxes are the foundation of a healthy democracy. They fund the public services we depend on every day: roads, schools, community and social services, health care, justice, environmental protection and much more. But over two decades now, governments have undermined the progressivity of our tax system by cutting corporate and top income tax rates and letting tax loopholes proliferate. The top 1% of Canadians by income now pay a lower overall rate than all other income groups, including the poorest 10%.

Emerging from its 43rd federal election, Canada faces no shortage of urgent domestic and global challenges. We can afford to fund solutions to crises like poverty, housing and climate change, but substantial progress will require more funding and that should come from making our tax system fairer. This special edition of the Monitor explores how we can do that.

Here’s a sample of what you’ll find in the issue.

We can’t do this without you! Please consider donating to the CCPA to get the Monitor delivered to your home or workplace.

Cover illustration by Michael Haddad.



Poll shows whopping concern among Canadians about climate change—82 percent say it’s a serious problem

Vancouver public intellectual Seth Klein commissioned the poll by Abacus Data because he felt that opinion research was overly focused on the carbon tax and actions that individuals can take to address climate change.
Vancouver public intellectual Seth Klein commissioned the poll by Abacus Data because he felt that opinion research was overly focused on the carbon tax and actions that individuals can take to address climate change.

People across the country are waking up to the risks of rising greenhouse gas emissions.

In a new poll by Abacus Data, 82 percent of respondents said that climate change is a serious problem.

Nearly half, 47 percent, described it as an “extremely serious” problem.

More than four in 10 described climate change as an emergency.

Only 12 percent felt that climate change was not something that people should be concerned about.

The poll also demonstrated a high level of anxiety across the country over this issue.

One in four Canadians told Abacus that they often think about climate change and it makes them really anxious.

Nearly double that percentage stated that they think about it sometimes and that they’re increasingly worried about its impact.

Residents of Quebec were the most anxious whereas Albertans were the least anxious.

However, Abacus Data reported that even in Alberta, 58 percent of respondents said they “are either anxious and thinking about it all the time or think about it sometimes but becoming increasingly worried about the impact it will have”.

The poll was commissioned by Vancouver resident Seth Klein, the brother of author Naomi Klein and an adjunct professor with SFU’s urban studies program.

In a policy note on the Canadian Centre for Policy Alternatives website, Klein stated that he commissioned the poll because “far too much of the political oxygen and polling on climate change has been consumed by the carbon tax/pricing debate”.

“While carbon pricing is an important tool, it alone is not going to get us where we need to go, and the topic has distracted us from the scale of action needed,” he wrote. “Additionally, too often polling questions individualize the challenge and solutions, rather than focusing on collective and governmental actions.”

Seth Klein@SethDKlein

What did my polling find? Three-quarters of Cdns say they are worried about climate change.
25% “think about climate change often and are getting really anxious about it”
49% “think about it sometimes and are getting increasingly worried”

Seth Klein@SethDKlein

Stunningly, 42% believe climate change is now “an emergency”, while a further 20% believe it will likely be an emergency within the next few years, for a combined total of 62%.

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Only 14 percent of respondents in the poll said that they had definitely heard of the “Green New Deal”, which is being advanced by progressives on both sides of the border to bring about a rapid, climate-friendly retooling of the economy.

Another 19 percent thought they had heard of it.

When the Green New Deal was explained to respondents, 72 percent stated they were either strongly or somewhat supportive. MORE


When it comes to climate action, the public is ahead of our politics: Analysis of national climate poll