June 1, 2017
For Immediate Release

Did the Liberals Saddle Taxpayers with the Burden of Paying Husky’s Carbon Tax on the West White Rose Extension?

Keith Hutchings, Natural Resources Critic for the Official Opposition, is asking, “Who will pay the carbon tax on Husky’s West White Rose Extension project?” In the House of Assembly on May 29, Hutchings asked Premier Ball, “The minister referenced before $3 billion in royalties, but through this process there were no discussions about a mandated carbon tax by the federal government for this industry and who’s going to pay it and how it affects the royalties for this province.”

Beginning in 2019, Ottawa will demand a carbon tax from new developers to offset the carbon footprint they create. But the Premier’s answer suggests the carbon tax may not have been factored into the decision to sanction the project. So do we conclude that the Ball Liberals made an agreement with Husky to saddle Newfoundland and Labrador’s taxpayers with the burden of paying Husky’s carbon tax on the West White Rose Extension project?

“Oil companies always require certainty on the costs associated and payed for during a projects life and are not receptive to a new tax once a new production field is up and operating. Any carbon tax regime would be on a general application tax across the board and would have no reason to exempt the project. There are 2 possibilities: the liberal government insulated Husky somehow in the future or the liberal government never even dealt with it, both being unacceptable. Like everyone else, they know the carbon tax is coming in 2019, and they would certainly have raised it at the negotiating table. What did the province agree to do with respect to their carbon tax obligations? Who will pay? And how much will it amount to? Tens of millions? Hundreds of millions? West White Rose is expected to produce 115 million barrels of oil, which suggests an enormous magnitude for the dollar figure we’re talking about in terms of carbon taxation. What precedent has this set for future producing fields?”

“The Premier and the Natural Resources Minister have an obligation to come clean with the people of the province about the terms of the agreement. When asked what work would be completed out of Province the Liberals refused to give details, so a real understanding of the benefits to the province could be weighed. Lay the facts on the table, including work done here and outside of province for the total project, and the estimated cost for a carbon tax on the life span of this project and who and how it will be paid.

“The secrecy from the government on this is appalling. This will be the first new offshore project to fall under the federal carbon tax regulations. It will set a precedent for future projects. How can the Liberal government deny people the information they require to judge the merits of the arrangement the Liberals have settled for and the huge implications for our vast offshore oil and gas reserves?” said Hutchings.

-30-

Media Contact: Heather MacLean, Director of Operations and Communications
Office of the Official Opposition (709) 729 6105, heathermaclean@gov.nl.ca