City of Terrace writes LNG impact shopping list

A new hospital, another elevated crossing over CN tracks, housing, and new roads all appeared on council’s priority list as it met with provincial cabinet minister Bill Bennett Feb. 5 to talk about the expected impacts should billions of dollars worth of liquefied natural gas (LNG)  industrial projects take place in the region.

Bennett assured council members the city would receive a portion of increased tax revenues that would flow to the province but warned there would be some lag time.

“There will be a period of time, and we’re at the front end of it now, prior to when those LNG terminals are up and running where there will be pressure on community infrastructure and community services, and no royalties to share,” said Bennett. “Clearly we’re going to have to have a plan to deal with the interim. Fort Nelson is faced with exactly the same thing and we have some experience with developing an agreement with them that we’ll probably utilize in working with Terrace, Kitimat, and Prince Rupert.”

Bennett said there’s opportunity to reap benefits from exporting LNG to Asian countries who are prepared to pay more than North Americans for the product.

“We’re sitting here now in 2013 with several basins in B.C. that have enough gas in them to provide gas to North America and the world for a very, very long time,” he said.

“The opportunity for us provincially, and for you in the northwest, is to take the actions that are required to make sure we don’t waste this opportunity and to plan ahead.”

“It’s going to happen,” said Bennett, of the region’s LNG development. “You’re going to have a large growth in population in the northwest, it means you’re going to have more stress and strain on your social services, you’re probably going to need more school rooms ... you’re going to need additional health services, you may need water and sewer infrastructure. These are all positive challenges, challenges you only have when you have a growing economy.”

Councillor Brian Downie raised the issue of lead time.

“Given the long timelines that hospitals take, it would seem that this would be somewhat of a high priority that the government could help advance along,” said Downie. “You have to invest early in order to see results by 2018 when you’re looking at the [extra demand].”

Bennett agreed with this assessment, noting that “if the health authority and the province wait to build this hospital until this LNG thing is starting to really go, construction costs, access to labour, wages, all of that, it’s going to cost the taxpayer a lot more to build a hospital five to seven years from now than it would to build it now.”

And as much as Bennett and council spoke about infrastructure requirements, councillor Stacey Tyers raised the issue of skills training.

“What’s really going to grow our community is to focus on the people who actually live here, and not just the people flying in and out to camp jobs,” she said.

The provincial government is anticipating tax revenues from extracting natural gas as well as from processing it for export.

How that money is  divided will form the core of discussions with local governments.

“I’m hoping that fundamental to this proposal for revenue sharing will be a commitment to redistributing across all of the affected areas,” said councillor Bruce Bidgood. “It would be really sad if the additional revenues only went to the towns where those plants were located instead of the communities all across the board.”

Bennett took his point, noting that there are a number of precedents for revenue sharing agreements across B.C., while acknowledging that agreeing on that model is not going to be easy.

“I’m sure it’ll be a direct negotiation and discussion between the province and the communities involved, that’s what we’ve done in the northeast,” he said. “The Fair Share model in the northeast seems to work really well for the municipalities that participate.”

Mayor Dave Pernarowski told Bennett the city is already working on a plan for the lag time and a share model.


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