The District of Kitimat is proposing a bylaw establishing a Revitalization Tax Exemption Program for the proposed LNG Canada (LNGC) project. The bylaw received three readings at the May 28, 2018 Special Meeting of Council, will be advertised for two weeks, and will be considered for adoption at its Regular Council Meeting scheduled for 7:30 pm, June 18, 2018.

If LNGC proceeds, the facility would be another secure, large-scale industry establishing in Kitimat, and the bylaw provides LNGC with a positive piece of cost certainty to help in getting the project to Final Investment Decision.

The proposed bylaw would provide flat amounts for property taxes during construction and the first five years’ operations – the bylaw will be in effect from 2019 to 2028.

Taxes during the construction period: The bylaw provides for the following taxes annually during the five-year construction period: $1,620,000 in year one, $3,230,000 in year two, $4,850,000 in year three, $6,470,000 in year 4, and $8,080,000 in year five.

Taxes during first five years’ operations: If LNGC makes a positive Final Investment Decision to build an LNG facility in Kitimat, the amount of annual flat property tax is proposed at: $9,700,000 annually once the plant commences operation (scheduled for year 6 of the bylaw term) and that years 7, 8, 9 and 10 be increased annually by the Consumer Price Index for British Columbia.

Haisla Bridge Replacement: The Haisla Bridge requires upgrading or replacement relatively soon and the bylaw also seeks to encourage funding of the replacement of the Haisla Bridge. If full funding for the Haisla Bridge replacement is secured from other sources and no municipal revenues are required the bylaw provides a reduction in property taxes paid by LNGC.

Provincial legislation allows revitalization tax exemption programs “for the purpose of encouraging revitalization in the municipality, provide tax exemptions for land or improvements, or both”. The District has previously enacted a bylaw establishing a revitalization tax exemption program in commercial zones, with both Microtel and MStar Hotels utilizing the program.

Other financial benefits of the LNGC project: In addition to property taxes, LNGC’s project will provide significant other revenues through building permits and a sizable contribution towards the District’s affordable housing fund.

LNG Canada is required, under the Community Level Infrastructure Management Plan approved by the Provincial Government, to mitigate social impacts relating to the project. LNG Canada has also committed to continue to support community agencies as part of their ongoing Social Investment programs.

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