More than $500 million in tax breaks for tech firms in BC deal

The provincial government and BC Hydro have agreed to a $500-million deal that would make the province’s technology sector more competitive with its provincial counterparts.

The deal, signed Friday in Victoria, allows BC Hydro to pay an annual dividend of $20 million to its shareholders in the form of an upfront payment that will increase to $50 million each year through 2023.

BC Hydro also will receive a share of Hydro One’s $1.5-billion capital infusion for its PowerStream solar and wind projects, as well as the provincial government’s $2.2-billion investment in the new TransLink rail network.

The new deal, which will take effect immediately, is worth about $250 million more than the previous deal signed with Hydro One.

“BC Hydro has been able to deliver this much more competitive package, and it’s an important milestone for the industry,” BC Hydro CEO John Deere said in a statement.

A spokeswoman for Hydro One said the company had no immediate comment.

Under the new deal BC Hydro would get $1 billion in upfront payments in 2019, with $500,000 a year in dividend payments, up from $250,000.

The dividend payments would be split equally between BC Hydro and BC Utilities, with a 10 per cent portion going to BC Hydro.

By 2023 BC Hydro’s annual dividend would increase to about $2,200 per share, up significantly from $1,900.

The deal also includes a $1-billion “incentive” for the province to expand its wind and solar projects, which have already received government grants and tax credits, and would be eligible for a tax credit of up to $4,000 per megawatt hour.

As well as getting the province back on track, the new agreement also would allow BC Hydro customers to sell power to other BC Hydro users in exchange for a dividend.

In addition, the deal will see the province receive a 10-year royalty agreement with a rate of 5.8 cents per kilowatt hour from 2019 to 2023, up to a maximum of 10 per year.

At the end of 2019, BC Hydro expects to have about 20 million customers.