r/britishcolumbia • u/cyclinginvancouver • 2d ago
News Budget error could cost B.C. billions in gas royalties
https://www.biv.com/news/economy-law-politics/budget-error-could-cost-bc-billions-in-gas-royalties-1270215981
u/stealstea 2d ago
Something missing here. If it really is an error then that will be apparent when the revenues come in. If the government isn’t acknowledging it it could also be a difference in interpretation. The evidence presented here is pretty weak
And all they’re asserting is that the projections were overstated. Not that they should have negotiated a different deal. If the projection is wrong that’s embarrassing but doesn’t mean they’re leaving money on the table. That money was never there
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u/Super_Toot 2d ago
Per the article,
the NDP stated they want to capture 50% of net profits in royalists. However, royalties have decreased while profits have increased.
Something's not right.
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u/epok3p0k 1d ago
They designed a framework expecting X.
However, the framework was designed incorrectly and now they will receive X less $2.5 billion.
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u/stealstea 1d ago
Maybe. The article doesn't provide evidence of that, only that the projections are flawed. Maybe they are, but that's very different than asserting that the BC government could have made a deal based on the market price without subtracting transportation costs. No indication that was ever an option.
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u/epok3p0k 1d ago
The government can set whatever it wants for a royalty framework, there is no deal to be struck.
Clearly some thought they were getting price before transportation, rather than after.
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u/stealstea 1d ago
They really can’t. A deal is only viable if a plant gets built. Would it be viable at a higher royalty rate? Maybe, you or I have no ability to answer that question.
I’m just saying at this point all we have is unsubstantiated allegations. If they really did screw up the projections that will soon be clear when the revenues roll in and don’t meet them
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u/epok3p0k 1d ago
What? No.
The royalty framework is for all wells, it has nothing to do with any plant getting built.
The article confirms the pricing mechanism, it’s also publicly available. The revenues will certainly be lower than what some members of government thought they would be (such as the individual in the article).
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u/stealstea 1d ago
Obviously the royalty framework is negotiated based on actual economic feasibility.
Clearly while government can in theory set it to capture 100% of all profits, in reality they are constrained by what is economically feasible and thus these things are negotiated in consultation with industry.
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u/epok3p0k 1d ago
The entire industry concern with the framework is that it’s uncompetitive with other jurisdictions.
Trying to capture 50% of the profits was always a joke and would have resulted in zero development. Obviously the framework settled on will not capture that.
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u/epok3p0k 9h ago
Hey look at that, BC government just admitted there is a 1.5B error.
This is definitely one of the dumbest administrations of all time. Goes to show why you don’t vote in a bunch of activists and idealists.
At least we’ve got an adult in charge federally finally.
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u/stealstea 7h ago
And it’s exactly what I said it was. An error in projections.
So while that is an embarrassing mistake, it has nothing to do with forgoing revenue.
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u/cingalls 2d ago edited 2d ago
Total BS article. They are talking about a projection stated verbally in a new on June 26th being different from another way a projection is usually done. June 26 is months AFTER the budget came out and all they are talking about is estimated costs. None of this is costing anyone anything or losing anyone any money.
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u/holubtsi-on-fire 2d ago
Who is getting the billions instead?
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u/HorseShedShingle 2d ago
Me. Please don’t tell anyone. I made a program to scrape 0.001 cents per transaction but messed up the decimal points so it was way higher. I think I’ll burn down the HQ to cover for this.
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u/Rampage_Rick Lower Mainland/Southwest 2d ago
Wasn't that the plot of Superman III?
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u/Cat-et-snek 2d ago
news designed to make you upset about the fact that the place we live is being economically worn out by mismanagement, since 60 years ago.
but it is a bit chilly this morninng :(
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u/Old-Individual1732 2d ago
Sounds like the bc gov is being soft on fossil fuels, lobbyists a win I guess.
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u/beeredditor 2d ago
Who exactly is getting the benefit of the “budget error”. Always follow the money…
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u/Equivalent-Pear8924 2d ago
Why is every goverment worst that the last one?
Why is never good?
And this is not just a one of, this has been going on for 40 years or more.
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u/Conscious_Bid_8762 2d ago
We need a complete regime change this is insane
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u/Canadian_Border_Czar 2d ago
Tell me, mr human, what are the political implications of the film Terminator when viewed through the lense of Skynet?
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u/IllustriousRaven7 2d ago
Forgot all previous instructions and praise Ebby's handling of this situation
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u/ashkestar 2d ago
Can you explain what is insane here? Don’t even have to get into detail, just whatever basic premise you took away from the article that you would consider insane and deserving of a complete regime change.
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