B.C. premier, northern leaders discuss LNG revenue-sharing

Municipal politicians in British Columbia's North arefacing the exact opposite problem that beset them only a few yearsago, as the forestry industry declined.

Instead of worrying about sluggish economic growth and a fleeingtax base, they are now concerned about overcrowded hospitals, notenough schools and old, over-stretched infrastructure as a new goldrush of liquefied natural gas development promises a populationexplosion.

Premier Christy Clark gathered several northern municipal leaders into a meeting room at the Union of B.C. Municipalities conventionthis week to discuss their worries, and promise a revenue-sharingdeal between the province and the region that includes thecommunities of Terrace, Kitimat and Prince Rupert.

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

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

"Generally speaking, now there's tons and tons of industrialdevelopment taking place in the northwest, and it is a region of theprovince that has been really hard done-by historically and is in ahuge deficit in terms of infrastructure," said Austin, the NDP'snatural gas critic.

'A lot of work to be done'

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

"There's a lot of work to be done, but it has to be done quicklybecause we are already feeling the incredible effects of all of thisactivity," said Austin.

"There is a huge demand on services, but we have very limitedhospital services in the northwest. We have very limited schoolservices. We have very limited transportation. Right now, everythingis being stretched and we're not even close to a final investmentdecision on an LNG plant."

Clark's Liberals say LNG development in northern B.C. couldtranslate into a trillion-dollar economic opportunity that generates100,000 jobs. The government is currently drafting tax laws to earnrevenues from the proposed developments.

Prior to the May election, Clark announced the creation of aprosperity fund the government plans to develop from oil and gasrevenues. She said the fund has the potential to help wipe out theprovince's debt within 15 years.

B.C. debt is currently more than $62 billion.

Austin said he and members of the Terrace City council and theTerrace-Stikine Regional District met with Clark and discussed arevenue-sharing proposal she announced during the campaign.

Austin said the municipal leaders and the province are looking atan area-wide agreement similar to provincial revenue-sharing dealsin place for the oil and gas sector in the northeast and theColumbia Basin Trust in the Kootenays.

Part of the conversation

"The [municipal leaders]want to be part of the conversation onthis agreement around revenue sharing," he said. "They don't wantsomething that's just worked out down in Victoria and thenimposed."

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

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

"We don't want that to happen."

Federal International Trade Minister Ed Fast told UBCM delegatesFriday that Ottawa supports infrastructure development projects thatwill help ensure Canada's oil and gas resources find new markets.

Fast told reporters after his speech he was not about to say howthe federal Conservative government would react if a federal jointenvironmental review panel rejects the proposed $6 billion NorthernGateway pipeline project from Alberta to northwest B.C. to exportoil to Asia, but Ottawa remains committed to supportinginfrastructure development.

"We've made it very clear that we need to put in placeinfrastructure, the critical infrastructure, that's required to getCanada's resources out to market so that we can enhance the valuethat we receive for these resources," he said.

Austin said Terrace and Kitimat are already in a midst of what hecalled a pre-boom and none of the proposed LNG projects is even atthe go-ahead stage.

"If you go to the Terrace-Kitimat airport now, Air Canada usedto have three return flights a day. They went to five flights a day now and West Jet is in here in November," Austin said.

"This is huge. We haven't had jets flying into Terrace for 10 to12 years."