Boom towns could tax resources: municipalities – by Jeff Lee (Vancouver Sun/Canadian Press – September 19, 2013)

While the federal and B.C. governments are pushing hard to open up Canada’s liquefied natural gas reserves for export to Asia, local municipalities are raising concerns about the impacts the dramatically rapid developments will have on them.

Whether it is the pressure on local policing, health care and community resources that pop-up boom towns will have on neighbouring cities to the impact on infrastructure such as roads and sewers, municipalities in the northern half of B.C. are tepidly raising a caution flag at this week’s Union of B.C. Municipalities Convention.

“We’re not saying we don’t want the economic investments. We do,” said Oliver Ray, executive director of the North Central Local Government Association. “But with investment in LNG will come some heavy pressures on our municipalities, and we’re worried about the impact that can have on us.”

A third of the association’s 30 resolutions to the UBCM deal with concerns over the impacts caused by rapid resource development. The association represents all local governments in the northern half of B.C., including more than 400,000 residents.

One of the largest impacts so far is “shadow populations” of mining and oil and gas camps situated just outside municipal taxing boundaries. Ray said towns like the developments but want to be able to tax them to help pay for services their workers use.

The association’s concerns come as Jim Prentice, a CIBC executive and former Conservative cabinet minister, said there is nothing more urgent right now for Canada than to get into the liquefied natural gas export game.

And Rich Coleman, B.C.’s energy and mines minister, said while the province will make sure local governments are adequately compensated for the added pressures, it is determined to protect its competitiveness in the global LNG market.

“LNG growth is unfolding in real time, all around the world. The lion’s share of investment is up for grabs. The biggest winners are far from being determined,” Prentice said in prepared remarks to the Canada LNG Export Forum in Calgary. “For Canada, nothing is more urgent right now than getting in the game.”

Coleman said with more than $100 billion in potential LNG investments on the line, B.C. is facing a “generational opportunity for the entire province” that could bring upwards of 75,000 permanent and temporary jobs. “This will fundamentally alter our province.”

Northeastern B.C. has more than seven trillion cubic feet of natural gas available to export annually to new Asian markets, in addition to the 1.8 trillion cubic feet it already supplies to the United States, Coleman said.

A number of multibillion-dollar projects are in the works to chill natural gas from B.C. into a liquid state and ship it across the Pacific to energy-hungry countries such as China, Japan and South Korea. Coleman said at least five companies are exploring the potential for building gas plants, and three companies are looking to build pipelines. Most of the companies are expected to come to a final investment decision by late 2014, Coleman said. He expects as many as five gas plants, each worth upwards of $11 billion, could be built over the next five to 10 years.

With that much riding on the line and with other regions around the Pacific Rim also courting Asia’s LNG buyers, municipalities can’t be the tail that wags the dog, he said.

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