CALGARY - An economist says one of the simplest ways British Columbia can get its fair share of oil pipeline revenues is by imposing higher property taxes on those projects.
"In fact, they have a special classification for pipelines and they can really bump up that property tax on pipelines if they want to get more revenue," Jack Mintz, with the University of Calgary's School of Public Policy, said Thursday.
Under that scenario, the higher tax costs would be passed along to the producers that would use Enbridge Inc.'s $6-billion Northern Gateway line or Kinder Morgan's $4.1-billion Trans Mountain expansion to ship crude from Alberta to the West Coast for export to Asia.
"Of course what happens is the industry starts getting squeezed," said Mintz.
However, Mintz said he'd rather see a more conciliatory approach to figuring out how the benefits and risks of West-Coast oil pipelines ought to split up between Alberta and B.C.
"I do think that B.C. right now has instruments that they can use that would be appropriate and they should then think about doing that if they want to go in that direction," he said.
"I think it would be better for all concerned, including both Alberta and B.C. and the industry, if there's kind of a deal made."
Another option, which Mintz does not endorse, is imposing "transit fees" on oil moving between provinces. Such a move raises all sorts of constitutional issues and would set a bad precedent, he said.
"Then the next thing you can do is have a tax on highway trucks going across provinces or putting a tax on railways going across provinces and we certainly don't want to start doing this with the United States, where we have all sorts of pipelines going down to the United States," he said.
B.C. Premier Christy Clark says five conditions must be met before her province will allow projects like Northern Gateway or Kinder Morgan's Trans Mountain line to be built.
Three have to do with the environment, one relates to First Nations issues and the last — the most contentious — is that B.C. must get a slice of the pipelines' economic benefit that reflects the environmental risk it would be bearing.
Alberta Premier Alison Redford, who met with Clark in Calgary on Monday, has flatly dismissed the idea of sharing royalties with B.C. as a "non-starter" and said she was disappointed Clark hasn't taken that notion off the table.
Speaking to students at the School of Public Policy earlier in the week, Clark said the ball is in the pipeline proponents' court when it comes to working out a revenue-sharing deal.
Clark added that it wasn't her job to champion the project, and that "those champions are unlikely to come from British Columbia."
Clark has said B.C. Hydro, the Crown corporation that would provide power to the pipeline, could be a potential lever and that the province also has the power to withhold 60 permits.
So far, Clark hasn't specified what a fair economic share would be worth.
Clark said she feels like the repairman in old Maytag commercials, waiting for the phone to ring with a proposal from pipeline proponents she can accept.
Also on HuffPost:
Northern Gateway President John Carruthers
(Sept. 4) - Northern Gateway president John Carruthers argues the pipeline is just as important to Canada as the St. Lawrence Seaway and the Canadian Pacific Railway..."when constructed, [they] laid the foundation for significant benefits for generations of Canadians. Our project is no different."
Robert Mansell, U of C School of Public Policy
(Sept. 4) - Robert Mansell, academic director of the University of Calgary School of Public Policy, argued the benefits the pipeline could have for Canada. "Just imagine a situation where, if not for Northern Gateway, you had shut in 525,000 barrels per day for one year. That loss works out to $40-million a day, or $14.4-billion per year," he said.
Leanne Chahley, lawyer for the Alta. Federation of Labour
(Sept. 4) - Leanne Chahley, a lawyer for the Alberta Federation of Labour, questioned the estimated economic gains. "It's still a social science that you're involved in, economics. How much degree of certainty should we give it?"
Gil McGowan, Alta. Federation of Labour President
(Sept. 4 ) - Albert a Federation of Labour argues the $6-billion line would mean 5% less refinery in Alberta and the loss of 8,000 jobs. "China is in the midst of a building boom in terms of refineries and refining capacity, so our fear is that if our policymakers allow this pipeline to be built we'll end up in a situation where our own homegrown refineries are no longer economic and they'll close down," federation president Gil McGowan said. "We'll end up in a situation where we're sending our raw bitumen oil to China and then buying back the refined product."
John Carruthers, Northern Gateway President
(Sept. 4) - Northern Gateway president John Carruthers on the Enbridge's committment to environmental responsibility: "It involves assessing, in the same objective fashion, and according to the same standards, the information or evidence that has been presented by those who are opposed to the development of our project. And it culminates in approving the project under a framework of conditions that will promote reconciliation over division, and fact over rhetoric."
John Risdale, B.C. First Nations Chief
(May 2012) - B.C. First Nations leaders travel to the step of the Alberta Legislature to voice their concerns on the environmental damage. "The pipeline route that they have proposed is following the most major river system that we have and when the river is ruined, the people are ruined, the land is ruined," said Hereditary Chief John Ridsdale of the Wet'suwet'en First Nation.
Terry Lake, B.C. Environment Minister
(Sept. 4) - B.C. Environment Minister Terry Lake on how Enbridge plans to exceed world standards in spill prevention. "We certainly want to clarify with Enbridge some of the comments made over $500-million more of safety improvements and what exactly will that mean," Lake says. "In terms of monitoring, in terms of response capability, how can we ensure that any proponent would have to live up to what we consider world class response and mitigation measures."
Economist Robert Mansell, U Of C School Of Public Policy
(Sept. 5) - <strong>On the chance that the proposed Nothern Gateway pipeline would have a negative effect on central Canada's manufacturing sector</strong>: "It is not credible that one could argue this would cause Dutch disease." "Would it do, as has been alleged -- cause the rate of inflation to go up and then force the monetary authorities to tighten the money supply and thereby shrink the economy? The answer is no. "Monetary policy is based on what's called the Core Inflation Rate, which excludes the price of food and energy."
Texas-Based Energy Consultant Muse Stancil
(Sept. 5) - <strong>In a report submitted to the hearing, Texas-based energy consultant Muse Stancil said the Northern Gateway will have an effect on oil pricing in North America:</strong> "It can be expected to have a material effect on the distribution patterns and pricing dynamics for Western Canadian crude, as crude producers for the first time will have a high-volume alternative to their historical markets within North America," said the Muse Stancil report. "Northern Gateway allows the Canadian crude producers to both stop selling to their least attractive refiner clients (from a pricing prospective) and reduces their need to ship heavy crude via comparatively expensive rail transport."
Richard Johnston, UBC Political Scientist
Sept. 5 - <strong>On the chance the federtal Tories could lose ground in B.C. due to unfriendly policies such as support of pipelines to the west coast:</strong> "Among the risks to their base, I would put Northern Gateway highest," Johnston said. "The risk/benefit ratio (for B.C.) is massively unfavourable in itself and if the government were to force the issue pre-emptively, they would add an additional dimension to the debate, singling out one province for ill-treatment, rather like the NEP and Alberta. I expect Conservative MPs are worrying about this aloud."
Elisabeth Graff, B.C. government lawyer
(Sept. 7) - "Are you willing to acknowledge this is a complex organizational structure that limits the liability of a corporate giant that definitely would have sufficient funds?" she asked. "What we're left with is an entity which you tell us has the financial resources necessary to cover any type of spill, but we're still doubting whether that is possible." "No, I just fundamentally can't accept that," replied Mr. Carruthers. "Because of the investment, everyone would want to make sure there's proper funding available in case of a spill," he said.
Janet Holder, Enbridge senior executive
(Sept. 7) - "We're doing everything in our power to mitigate against a spill." "Believe me, Enbridge doesn't want a spill. It's not what we're in the business for. We're in the business of moving very safely, environmentally sound and in a sustainable way, product from one spot to another."
Geoff Plant, B.C.'s head lawyer for the hearings
(Sept. 7) - "The question [is] whether Enbridge is actually capable of getting the kind of insurance to ensure against the risk of liability," on whether the insurance is there should an oil spill happen.
Barry Robinson, lawyer for three environmental organizations
(Sept. 8) - "If free market economies aren't at play, where's the economic benefit?" asked Robinson about the economic effects of the hypothetical possibility of Chinese interests buying control of the Northern Gateway pipeline.
Kelowna resident James MacGregor
(Spet. 6) - The Avaaz petition <a href="http://www.avaaz.org/en/petition/Stop_Enbridges_Northern_Gateway_pipeline/?whtizcb" target="_hplink">"No Enbridge Tankers/Pipeline in BC Great Bear Rainforest"</a> was started by James MacGregor and has since passed 10,000 signatures. "BC's entire Great Bear Rainforest, its wildlife and the livelihoods of coastal First Nations are all at great risk if Enbridge's Northern Gateway pipeline is approved," he said. "I know I'm not the only one out there speaking up about the pipeline, but I felt like I couldn't sit back and do nothing." (Source: <a href="http://www.vancouverobserver.com/blogs/earthmatters/petition-opposing-northern-gateway-pipeline-clears-10000-signatures" target="_hplink">Vancouver Observer</a>)
Hana Boye, lawyer for Haisla First Nation
(Sept. 17) - On who could end up with ownership stakes: "If we don't know who these investors are, we're not able to determine if they're financially viable, if they're market-force driven or if it's in the interest of Canadians," she said.
Crystal Lake pipeline
Chris Peters, Engineer
(Sept. 17)- Peters argues that an approval of the pipeline might mean a setback to Canada's national climate change policy aims to reduce such emissions to by 2020. That cost "should be recorded as a negative and a cost to the planet," said Peters.
Crystal Lake pipeline
Crystal Lake pipeline
trenton falls pipeline
Terry Lake, B.C. Environment Minister
(Sept. 17) - In the worry that in the event of a spill, Enbridge won't have tge insurance to cover the clean-up costs: "Enbridge and Northern Gateway are very aware of that concern now, so we'll look to their response. But we've made it clear that taxpayers will not be left on the hook," Lake said. "I think that the company would argue they have the resources necessary. What British Columbians want to see is an ironclad guarantee that they do have the resources necessary, that the structure and the insurance in place will protect British Columbians from the cost of any adverse event," he added.