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LNG revenue to be used to pay down debt: Throne Speech

If all goes well, money from liquified natural gas exports could be used to pay down British Columbia's debt by 2027, according to today's Speech from the Throne.

The speech, written in Premier Christy Clark's office and delivered by Lieutenant Governor Judith Guichon, dwelt on what a Clark government would do with revenues from two large and three small proposed LNG plants.

"To protect this second stream of revenue for generations to come, your government is establishing the British Columbia Prosperity Fund," the speech said. "Future royalties will be designated to this fund, ensuring British Columbia families can beneft from the prosperity created by natural gas in our province."

The fund is modeled on heritage funds used in Norway and Alberta to share the benefits of resource revenues.

"A main focus of the B.C. Prosperity Fund will be to reduce provincial debt," it said. "We have an obligation to make good on this debt, rather than ask our children to pay it for us."

B.C. now carries some $56 billion in debt and pays about $2.4 billion a year in interest.

The prosperity fund will begin collecting revenue in 2017, when the first LNG plant is expected to open. In a best case scenario, the provincial debt could be paid down within 10 years of that, a spokesperson for the premier's office said.

The money will give the government of the day other options as well, the speech said. "Whether it is eliminating the provincial sales tax, or making long-term investments in areas like education or vital infrastructure that strengthen communities -- these are the kinds of opportunities the B.C. Prosperity Fund can provide."

The speech also mentioned various ongoing government commitments, including building infrastructure, protecting health care and supporting education.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

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