City Looks to Develop Plan to Get a Piece of Resource Revenue Pie
Tuesday, October 8, 2013 @ 3:58 AM
Prince George, B.C. – The City of Prince George is looking to find a way to get a piece of the natural resource boom in Northern B.C.
This week, the City’s Finance and Audit Committee threw it’s weight behind a plan to develop a proposal for a “Northern Natural Resource Sharing Agreement” that would be up for discussion with the Province, northern communities and other stakeholders.
Right now, communities in the Peace Region and the Northern Rockies, are benefiting from revenue generated in the oil and gas resource sectors. Those regions are getting a piece of the revenue pie because they are impacted by the resource activity, even though the actual work is not happening within their specific boundaries.
The Provincial Government made a commitment to sharing resource revenue with local governments, saying it would like to “commence revenue sharing discussions with rural resource communities, especially those in Northwest B.C. to help them prepare for future growth.”
The agreement the City of Prince George is looking to develop would seek some of the tax revenues from LNG, mining and forestry sectors shifted to a special fund to benefit all northern municipalities. Staff suggest the dollars could be used for things like transportation, infrastructure, water supply, firehalls, and non-market housing.
While the Prince George plan would like to see an agreement that would benefit all northern communities, the suggestion the flow of dollars should be linked to population would clearly benefit Prince George, even though smaller communities, such as Terrace, Vanderhoof, Fort St James and Mackenzie may be feeling most of the pressure from projects in their specific areas.
Still, Mayor Shari Green supports the intent of the proposal saying the Province may not be keen to work on individual proposals, and this approach would be “A more robust, cohesive conversation that might lead to a strategy that works across the north.”
Comments
A robust conversation.
“I know that you believe you understand what you think I said, but Iâm not sure you realize that what you heard is not what I meant.â â Robert McCloskey
“the suggestion the flow of dollars should be linked to population would clearly benefit Prince George”
If existing population, yes.
If growth from a current or end of the year population as a benchmark, then it would be fairer to all. Even then, a growth of 5,000 in Terrace would be a major impact, I would think, while a similar growth of 5,000 would not impact PG as greatly.
For instance, we may still have some empty schools left to accommodate those with young families while Terrace would not have the same number, if any at all.
BTW, this has been said brought up before. I assume we will not get to see a better overview of the plan since they want to negotiate behind closed doors with the province.
Perhaps it would be helpful to include that kind of information before some of us will go looking for it.
It might be interesting to keep a list of things which are dealt with behind closed doors so that we can start developing a sense of how much is transparent and how much is opaque.
Gus you make a good point and it would lead you to think the province isn’t going to shake the money tree for PG as this City is well positioned to handle lots of growth with all the available property, empty schools, stable economy, large public sector, major industrial tax base, etc.
The same can’t be said for Kitimat, Fort Nelson and lots of other small communities that have no ability and no capacity to handle the projected massive growth so those small communities need far more help than Prince George.
At least it is now clear that this mayor and council just want to spend more rather than cut costs.
What happened to the 10% reduction anyway? It is now just a distant campaign promise that most will forget come the election next year.
The LNG pipelines and LNG plants, plus the drilling for gas, and oil etc; all the mines, etc; all bypass Prince George. None of this industrial expansion has much to do with us. Therefore one can see why PG would want to get the benefits, even though they make little contribution to these industries.
Kitimat, Pr Rupert, Terrace, Ft St James, Vanderhoof, and the Northern Cities are long overdue for some Government money for infrastructure etc; Prince George basically is overbuilt and has everything except good infrastructure, which they would have had, if they had been good stewards of tax dollars, as opposed to being big time spenders of tax dollars.
What happened to the 10% reduction is that it morphed into a 10% increase. I for one will not forget the promise come the next election.
“Right now, communities in the Peace Region and the Northern Rockies, are benefiting from revenue generated in the oil and gas resource sectors. Those regions are getting a piece of the revenue pie because they are impacted by the resource activity, even though the actual work is not happening within their specific boundaries.”
The piece of revenue pie that northern communities get should be proportional to the amount of revenue generated in their areas. The larger the revenue / impact, the larger the piece of the revenue pie.
Revenue sharing, such as this, has been requested by impoverished First Nations in Canada for decades, might want to include them as well. Attawapiskat First Nation is impoverished, while the neighbouring DeBeers Diamond mine extracts billions of dollars.
I would be inclined to suggest that the smaller resource based communities should benefit most from this initiative and that they use the money to try and diversify their economies and/or for infrastructure projects that they could not otherwise take on because of the fact that they don’t have the size or critical mass to do it.
Let’s not forget that PG already gets a HUGE inflow of Provincial and Federal dollars simply because they are the regional service centre and it makes sense for those resources to flow there. As a result of that position, PG has been able to diversify and stabilize its economy reasonably well.
I think a healthier Fort St. James, Vanderhoof, Burns Lake and Mackenzie will lead to a healthier PG. I’m not so sure that a healthier PG will have the same impact on those other communities.
They shouldn’t lose sight of what the main intent of this initiative is. IMHO, PG shouldn’t be in the business of looking out for itself above everyone else. As the largest city in the region by far, I think PG should be in the business of helping to grow the entire area. There is a strong leadership role for them to play here and if they do it right, they will benefit in the long run. No need to be short sighted here, the entire region is in this together.
NMG, as opposed to the entrenched political practice of spending money where the most votes are?
I like your idea, applying that on a provincial scale would mean more money for the rest of BC and less to the lower mainland.
Hey People#1,
I don’t necessarily subscribe to the view that money should flow to areas where resources are physically located, instead, I think the model has to make sense for the entire Province.
We simply can’t ignore the fact that the LML is a HUGE economic driver for the Province of BC, even though raw materials aren’t physically extracted from there. When you look at the Province of BC’s total revenue streams for 2012/2013 (in millions), they amount to $42,451. Revenues from natural resources amount to $2,502 or roughly only 6% of the total. The vast majority of the other streams rely on “people” (income taxes, consumption taxes, fuel taxes, MSP premiums, etc.) and without that huge population cluster in the LML, one could make an argument that the Province of BC is basically an Atlantic Province. I think people severely underestimate the spinoff that such a large urban centre has on the fortunes of the entire Province. Said another way, I don’t think it’s coincidence that BC, Alberta, Ontario and Quebec are still the powerhouses when it comes to driving the Canadian economy. Investment and growth will flow to where people live.
Now all of that aside, yes, I think there is an opportunity to “spread the wealth” a bit and to try and develop communities outside of the major urban centres. I also don’t think it needs a huge influx of resources. I mean let’s face it, a couple of million dollars invested into Smithers probably goes ALLOT further than a couple million dollars invested into Abbotsford.
At the end of the day, I think it is about balance and trying to ensure that the Province is full of viable communities. Every city doesn’t need to grow to 10,000, 30,000 or 70,000 people, because they can’t. That said, it’s also bad to have the situation where cities can literally die if the primary industry takes a turn for the worse. I think this is a very real possibility for many rural communities in the years ahead given the state of forestry.
There will always be a need for mega projects and huge investments into the LML, because keeping that engine going and growing is a HUGE benefit to the entire Province and beyond.
I don’t think pandering for votes is the answer, I think making sound investment decisions is.
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