Canada’s National Observer, Local Journalism Initiative Reporter
The BC government’s $200-million subsidy to electrify the Cedar LNG project is drawing sharp criticism as a fossil fuel handout and an unwise investment that also opens up potential legal risks after a new International Court of Justice ruling.
Premier David Eby and Energy Minister Adrian Dix said the public funding will go to the electrification of the Cedar LNG terminal, a floating liquefied natural gas facility co-owned by the Haisla Nation and Pembina Pipeline Corporation near Kitimat that is expected to come online in 2028.
The money will support the building of a new 287-kilovolt transmission line, substation, distribution lines and nearshore electrification so the facility won’t be powered by natural gas — an original condition for getting provincial approval for the project.
Powering the plant with clean electricity will bolster the economy at risk from “reckless decisions in the White House,” Eby said in a July 29 statement, adding the project would create jobs, generate revenue and emit less carbon pollution than other similar projects.
Up to 500 jobs will be created at the peak of Cedar LNG’s construction and 100 people will have full-time jobs when it’s up and running, according to the province.
Elected Chief Maureen Nyce of the Haisla Nation said the provincial funding allows the Nation to meet its goal of delivering a project with “the lowest possible carbon footprint” while advancing prosperity and development “on our own terms and in accordance with our values.”
“When Indigenous communities lead projects as owners, as is the case with Cedar LNG, we are able to ensure that these projects are developed in the most environmentally responsible manner, while generating revenues that enable us to protect our way of life and build long-term prosperity,” Nyce said.
But this isn’t the first time the project has received government support and critics question whether it will be the last.
BC’s investment in Cedar LNG follows another $200 million gifted to Cedar LNG by Prime Minister Mark Carney’s government just prior to the election.
Kathryn Harrison, a political science professor at the University of BC who specializes in climate policy, categorized the funding as a fossil fuel subsidy that will accelerate the climate crisis — given that most carbon pollution from the export project will be generated when the gas is burned in other countries.
The province has framed the funding as a commitment to Indigenous economic reconciliation and has suggested Cedar’s “clean LNG” will replace dirtier global alternatives. However, Harrison questioned whether the more costly Cedar LNG will be competitive in a global market that is already saturated with natural gas.When markets are oversupplied, prices drop — and high-cost producers like BC are disadvantaged, she added.
“My worry is this may be just the first in a series of subsidies needed to keep all LNG projects afloat,” she said.
Harrison questioned why Cedar LNG, with backers that had already promised to electrify and finance the project, would need public funding unless it wasn’t viable without government support.
“There are reasons to question the long-term competitiveness of any new LNG investments, not just in Canada, but elsewhere,” Harrison said, noting the most recent International Energy Agency forecast predicts a global LNG glut likely to continue into the 2030s — which will fuel lower prices and increased financial risks for newer projects.
“We need to be choosing investments and approving projects even without taxpayer investments that are the most viable for the long-term,” she said. Using public funds to establish LNG projects is a slippery slope with the risk they will need to continually be propped up by tax dollars.
By continuing investment in new LNG projects and supporting increased oil and gas, the provincial and federal government may also find they’ll have to pay billions of dollars in compensation to other countries bearing the brunt of change, according to a recent landmark ruling by the International Court of Justice.
Rich, oil-producing states like Canada or jurisdictions like BC that don’t act to curb climate pollution and continue to subsidize, licence and boost production will be vulnerable to legal claims around climate harms in the future, said Jens Wieting, senior policy and climate advisor with Sierra Club BC.
“We have the poorest track record among the G7 countries when it comes to reducing pollution and meeting climate targets,” he said.
“I would expect that jurisdictions like Canada and BC are particularly at risk of becoming liable.”
BC’s parallel electrification efforts for heat pumps and transportation — alongside support for large fossil fuel infrastructure — create a conflict over limited clean energy resources, Wieting added.
“We need to prioritize electricity for solutions, not pollution.”