Supporting Canada's Responsible Resource Development

Year: 
2016

B.C. and Canada’s resource development projects, and associated infrastructure, are an economic enabler for its economy, allowing value added sectors to develop, create jobs, and compete.

Safe, well-regulated and responsible natural resource development is one of the defining features of the British Columbia economy. The wealth created by natural resources enables B.C. to serve as a net contributor to Canada’s national economy in support of vital services such as health care and education.

B.C. also contributes to Canada’s natural resource prosperity through its historic role as the nation’s transportation link to the Asia Pacific region. Producers of oil, coal, lumber, copper and grains rely on B.C. ports to connect them with Asia Pacific. Infrastructure investments such as the South Fraser Perimeter Road reflect the Province’s recognition of the importance of Pacific Gateway.

If British Columbians and other Canadians are to prosper in the decades ahead, however, the province should also take steps to support private sector investments in responsible resource development and transportation.

An example of the risk to our ability to efficiently prosper from our natural resource sector is the controversy around Northern Gateway Pipeline and Trans Mountain Expansion Projects. The Trans Mountain project is a timely, shovel-ready opportunity to show international investors B.C. is open to multi-billion-dollar business investments that satisfy Canadian’s high expectations for environmental sensitivity, regulatory compliance and safe, responsible operation.

Despite this, the public debate threatens to overtake the regulatory process. Criticism of any project should be part of a healthy review process. But much of the criticism of both Northern Gateway and Trans Mountain Expansion Project is driven by a conviction that the project should not proceed regardless of the proponent’s ability to meet regulatory requirements for responsible development.

The original Trans Mountain Pipeline has been in operation for more than 60 years. Trans Mountain proposes to nearly triple the capacity of its existing 1,150-kilometre oil transmission pipeline between Edmonton and Burnaby and expanded shipping capacity at its Westridge Marine Terminal in Burrard Inlet.

A $6.8 billion private sector investment, the expansion project it creates thousands of jobs for both the short and long term, and provides billions of dollars in new revenue for all levels of government. Small business operators, individuals and communities are among those who will gain from this project.

B.C. would gain the equivalent of 9,500 jobs per year for 20 years. In communities along the proposed pipeline corridor, annual property tax payments to at least 20 local governments and 24 Aboriginal communities would more than double to $52.4 million from $25.9 million per year. There would be 1,100 jobs created through expanded Westridge operations, and an additional $2.5 billion injected into the Metro Vancouver economy over 20 years.

Trans Mountain Expansion Project is one of many resource-related infrastructure projects that create tremendous opportunity, prosperity and job opportunities for British Columbians in both the short and long terms.

In addition to an estimated $81 billion in tax revenues and a $270 billion in national GDP uplift over 30 years, construction of the Northern Gateway Pipelines project will benefit communities throughout the country. In total, the project will generate 558,000 person years of employment yielding $48 billion in labour income and will provide $28 billion of value to industry in the first 10 years alone. Over 1,177 km of pipeline with pump stations, and the marine terminal, will provide 1,400 person years of direct construction employment in Alberta and 4,100 person years in B.C. Including indirect and induced employment, a total of 62,000 person years across Canada will boost labour income by $4.3 billion.

The $8.3 billion Site C hydroelectric project in northeast B.C. creates 10,000 person years of direct construction jobs and 33,0000 person years of total employment over nine years — and provides a legacy of low-cost electricity production for more than 100 years.

The $1.3 billion KGHM Ajax Mining copper-gold project near Kamloops could provide 1,800 jobs in a 2.5-year construction phase, 500 full-time positions, $500 million in estimated tax revenue and $60 million in annual payroll.

Liquefied natural gas plants under active consideration in B.C. are generational opportunities that add wealth, lower taxes and thereby make it more affordable for B.C. families to live in high-priced regions such as Metro Vancouver.

A decision on the $40 billion LNG Canada project in Kitimat could be announced in 2016. The first phase of Pacific NorthWest LNG, an $11 billion commitment, could also come this year.

Close to Metro Vancouver, the $1.8 billion Woodfibre LNG plant would create 650–plus jobs during construction and 100 full time jobs during operations. It would pay $83.7 million in tax revenue to all levels of government during construction and $86 million a year during operations.

Meanwhile, the forest industry remains a mainstay of the provincial economy and the principal economic driver for 40 per cent of the communities in which it operates. B.C. is the largest producer of softwood lumber in Canada and North America’s largest producer of bioenergy. It annually contributes $13 billion to provincial GDP, supports 146,000 direct jobs and each year sends $2.5 billion in revenue to all three levels of government.

Among proposed resource projects, Trans Mountain is a leader — it could be shovel-ready before year’s end if the federal government elects to let it proceed. The Chamber is very supportive of the project and believes that the Trans Mountain initiative is of national importance with the potential to significantly expand market access for the good of all Canada.

Western Canadian oil producers will not thrive without greater access to global markets. Their only export customers at present are in the United States Midwest, where a supply glut has pushed the market price for Canadian oil below its potential value to refiners in other markets.

For Canada, there is no better time to allow the private sector to take the initiative as a long-term creator of jobs and government revenue. Each additional dollar earned on the sale of a barrel of Canadian oil keeps people working and brings more tax dollars for government with no additional investment of public money.

Regulatory review of resource and infrastructure projects addresses a broad range of environmental, health and safety, socio-economic, community, and Aboriginal issues to ensure that the concerns of all interested stakeholders are taken into account. Potential environmental effects of a proposed project are identified and evaluated, providing the opportunity for the proposed project to be modified, if appropriate, before detailed design and construction starts.

Through the regulatory review process, potential projects are endorsed, modified or rejected depending upon whether significant adverse effects, following planned mitigation measures, are predicted.

The Chamber believes that it is critical that B.C. maintains its reputation as a jurisdiction open to investment and take actions that sustain and expand the ability of the Pacific Gateway to generate prosperity for B.C. and Canada.

Inefficient and unpredictable processes are turning away potential investors and prevent businesses from being able to make informed location and logistic decisions. For example, the World Economic Forum has cited “inefficient government bureaucracy” as one of the biggest impediments to improving Canada’s economic competitiveness.

The Chamber welcomes changes to improve the efficiency of the regulatory review process for major infrastructure projects — whether it’s a pipeline expansion, an LNG export facility or a new mine.

We encourage all levels of government to continue to build on these improvements to ensure that Canada develops a world-class regulatory system that effectively supports economic competitiveness while protecting Canadians and the environment. This system must remain stable and consistent.

THE CHAMBER RECOMMENDS:

That the Provincial Government works with the Federal Government to promote western access for natural resource products. The Province should:

  1. Work with the federal government to identify opportunities, training, education, joint ventures, etc., that would ensure First Nations communities can fully participate and benefit from all natural resource development opportunities;

  2. Take a more proactive role in communicating facts about the provincially and federally regulated pipeline industry as well as B.C. and Canada’s safety record for shipping heavy oil;

  3. Continue to support establishment of a world-class marine tanker safety regime with enhanced marine spill response capability, and a world-class terrestrial safety system;

  4. Engage Chambers and other organizations in project pipeline construction communities to maximize opportunities for local businesses during construction and operation of all major projects, including increased opportunities for First Nations participation;

  5. Provide greater clarity and specificity on B.C.’s provincial interest, commonly known as the “five conditions,” in order to provide certainty, predictability, and stability that encourage capital investment; and

  6. Confirm that a proposed heavy oil pipeline meeting B.C.’s five conditions has the full support and confidence of the provincial government, and should proceed.

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