Some Shocking Facts about the Liquified Natural Gas Project Agreement Act

Andre Carrel
By Andre Carrel
August 13th, 2015

Our provincial government is holding up the 25-year liquefied natural gas (LNG) deal recently approved as an achievement which will serve our long-term economic interests.  It is a done deal, but it nonetheless merits closer examination.  We need to reflect on it even though we do not have the power to do anything about it.  The LNG deal is an example of what elections are all about.  Elections give those we elect the capacity to enact laws undreamt-of at the time of the election.

The Liquefied Natural Gas Project Agreements Act (LNGPAA) is an unassuming piece of legislation comprised of just 10 sections, including definitions.  What should be of most interest to citizens about that legislation is a commitment to exempt LNG projects from critical regulation, and the absence of any reference to employment.   

Are the laws under which businesses are established and operated in this province not adequate to facilitate a liquefied natural gas project?  During the last election LNG was promoted as a great job creator for citizens, not as a safe investment opportunity for shareholders. If we are going to provide legal protection from tax and other cost increases for shareholders, why not provide equal protection for citizens?

The LNGPAA allows the government to enter into agreements to “provide to a person an indemnity respecting the amount of additional tax paid by the person in the event of a tax law change, and the person’s direct costs of complying with a greenhouse gas regulatory change” (sec. 2).  The reference to “a person” includes corporations which are recognized in law as persons.  Any amount due to a corporation pursuant to this section “must be paid out of the consolidated revenue fund” (sec. 6).  The consolidated revenue fund consist of what politicians like to refer to as “taxpayers’ dollars”  when debating a benefit for flesh-and-blood persons.  If citizens in their capacity as taxpayers are to provide financial guarantees to a corporation, would it not be reasonable for that corporation to provide employment and wage guarantees in exchange?

A provision of greater long-term consequences than the LNGPAA’s 25-year provision is sec. 4 which exempts any LNG project from parts of section 72 of the Financial Administration Act.  Subsection 3 provides that an indemnity or guarantee given under “any other Act by or on behalf of the government”  must comply with all government regulations.  Agreements negotiated under the authority of the LNGPAA are exempt from this obligation.  Subsection 8 provides that the Minister of Finance must, after the beginning of each fiscal year, present  “a report respecting the guarantees and indemnities” approved by the government to the Legislative Assembly.  LNPGAA agreements are exempt from this obligation as well.  In other words, however much “taxpayers’ dollars” future governments may have to pay to an LNG corporation during the terms of an agreement, this is none of your (or my) business.

Twenty years ago James Laxer, a political science professor at York University, published In Search of a New Left: Canadian Politics after the Neoconservative Assault. He cautioned readers that  “[t]he unprecedented separation of capital from the control of the nation-state is a cornerstone of the harsh new capitalism of our era.”  He went on to note that “[a]ll specific questions in our politics – globalization, competitiveness, the deficit, unemployment, taxation and the welfare state – are really debates about equality versus inequality.”

The LNGPAA is an example of what Laxer was writing about a generation ago.  This LNGPAA is an example of how easily, in the harsh new capitalism of our era, a political promise of  “Jobs, Jobs, Jobs!” can emerge post-election as a financial guarantee of  “taxpayers’ dollars”  payable to global corporate interests.  We would do well in future elections to reflect on the difference between ideology and philosophy before marking our ballot.

Categories: EducationOp/Ed

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