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Clark meets with northern leaders about LNG revenue sharing

Revenue sharing deal discussed involving LNG development in the north.


VANCOUVER — Municipal politicians in BC’s North are facing the exact opposite problem that beset them only a few years ago, as the forestry industry declined. Instead of worrying about sluggish economic growth and a fleeing tax base, they are now concerned about overcrowded hospitals, not enough schools and old, over-stretched infrastructure as a new gold rush of liquefied natural gas development promises a population explosion.

BC Premier Christy Clark gathered several northern municipal leaders into a meeting room at the Union of BC Municipalities convention this week to discuss their worries, and promise a revenue-sharing deal between the province and the region that includes the communities of Terrace, Kitimat and Prince Rupert.

Skeena NDP MLA Robin Austin, who attended the meeting, said a decade ago the northwest was considered an economically depressed area, with some of the highest jobless and vacancy rates in Canada.

Kitimat was ranked by Census Canada in March 2007 as the community with the greatest population decline in Canada, posting a rental vacancy rate of 44.5%.

“Generally speaking, now there’s tonnes and tonnes of industrial development taking place in the northwest, and it is a region of the province that has been really hard done-by historically and is in a huge deficit in terms of infrastructure,” said Austin, the NDP’s natural gas critic.

The Haisla bridge over the Kitimat River that links the community to an industrial area where work is underway on a Rio Tinto aluminum smelter upgrade and the site of proposed LNG plants is in need of a refit because there are concerns it cannot withstand the weight of constant truck crossings, he said.

“There’s a lot of work to be done, but it has to be done quickly because we are already feeling the incredible effects of all of this activity,” said Austin.

“There is a huge demand on services, but we have very limited hospital services in the northwest. We have very limited school services. We have very limited transportation. Right now, everything is being stretched and we’re not even close to a final investment decision on an LNG plant.”

Clark’s Liberals say LNG development in northern BC could translate into a trillion-dollar economic opportunity that generates 100,000 jobs. The government is currently drafting tax laws to earn revenues from the proposed developments.

Prior to the May election, Clark announced the creation of a prosperity fund the government plans to develop from oil and gas revenues. She said the fund has the potential to help wipe out the province’s debt within 15 years.

BC debt is currently more than $62 billion.

Austin said he and members of the Terrace council and the Terrace-Stikine Regional District met with Clark and discussed a revenue-sharing proposal she announced during the campaign. Austin said the municipal leaders and the province are looking at an area-wide agreement similar to provincial revenue-sharing deals in place for the oil and gas sector in the northeast and the Columbia Basin Trust in the Kootenays.

“The (municipal leaders) want to be part of the conversation on this agreement around revenue sharing,” he said. “They don’t want something that’s just worked out down in Victoria and then imposed.”

Austin said local leaders want their communities to be better prepared for what appears to be an oncoming surge of new residents.

Northwest politicians are already feeling population growth pressures and they “don’t want to end up with a Fort McMurray, where we hear stories about what happened with the boom there and the community wasn’t ready and it got overrun.

“We don’t want that to happen.”

© 2013 The Canadian Press