09/20/2013 04:00 EDT | Updated 11/19/2013 05:12 EST

Christy Clark: LNG Revenue-Sharing Deal Promised To B.C.'s North


VANCOUVER - Municipal politicians in British Columbia'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.

Premier Christy Clark gathered several northern municipal leaders into a meeting room at the Union of B.C. Municipalities convention this week to discuss their worries, and to 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 per cent.

"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."

At the UBCM on Friday, Clark said the government will fund grants totalling $150,000 to northwest communities to perform needs assessments to study the impacts that LNG developments could have on community water and sewer systems, roads, health, safety and social systems.

Prince Rupert, Kitimat, Terrace, Port Edward and the Kitimat-Stikine and Skeena-Queen Charlotte regional districts are eligible to apply for the grants under a community, sport and cultural development ministry infrastructure planning program, said Clark.

"We're going to work with you to assess your needs for housing, water, sewer, health, education and justice," Clark told UBCM delegates. "This is just the first step in this process. We need to continue to work together so that communities can meet the challenges of growth."

Clark's Liberals say LNG development in northern B.C. 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.

B.C. 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."

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

Fast told reporters after his speech to delegates he was not about to say how the federal Conservative government will react if a federal joint environmental review panel rejects the proposed $6 billion Northern Gateway pipeline project from Alberta to northwest B.C. to export oil to Asia, but Ottawa remains committed to supporting infrastructure development.

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

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

"If you go to the Terrace-Kitimat airport now, Air Canada used to 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 to 12 years."

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