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Harcourt Wades In On Kitimat -Alcan Case

By 250 News

Tuesday, April 03, 2007 03:59 AM

Former Premier Mike Harcourt says in order to solve the impasse over Kitimat, the two combatants will have to quit "staring at one another over the bear cage".

"It is troubling indeed for me" says the former B.C. Premier  " I’d hate to see them (Alcan) pull the plug and just sell power, and you never can get everything that you want. Both sides have to realize this."

Harcourt was the Premier who pulled the plug on the Kemano completion project, arguing that the Nechako and Fraser salmon fishery would be destroyed if it went ahead.

Harcourt says he is puzzled with the court action and the position taken by both sides. 

The  court action tried to tie Alcan to  producing power for the smelting of aluminum.  The court ruled Alcan's power production was not bound to the 1950 agreement which said the power could  only be used "in the vicinity of the works".

"We have to find some way to save face not only for the people of the region but also the company.  I am more puzzled as to why we can’t do something like the Columbia power treaty in which the region got $500 million dollars while the power generated from the Columbia system was turned over to Powerex who then resold it to the USA for 8 Billion dollars. The result has been that the communities in that region have re invented themselves and this is the direction that I believe we will have to go in the Pacific Northwest. "

Harcourt says the province must find another solution  other than "my way or the highway".   Harcourt says "There is a deal in it for all of us, and then go find it."

Harcourt says the Pacific Northwest needs diversification,  "I fear that things would have also been much worse for Terrace who have enjoyed huge benefits from the Nisgaa land claims treaty and the money that has flowed from it.   The Pacific Northwest needs some help and it doesn’t matter what government is in power, we need to act to diversify the economy of that region, in return for Alcan receiving the power that they have at good prices, they need to give something back to those communities".

   
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Comments

NDP always willing to sell off the province.

BC Hydro should drill a new shaft to tap into the public water and produce power. Or set up some generators at Kenney Dam and produce power. Alcan no longer can show a need for the water. BC Hydro should be able to tap into what Alcan is now calling surplus water.
If you have ever been to the Cheslatta Falls you wonder why BC Hydro doesn't have a generator there.
"NDP always willing to sell off the province."

What a really strange comment to make. The article points out that it was Harcourt who pulled the plug on Alcan when they were in danger of destroying the Nechako River - how is that a sell off?

He is suggesting the parties talk to each other and reach some sort of compromise so all parties beneft - how is that a sell off?

It is Gordon Campbell who wants to give Alcan the right to charge exorbitant prices for the electricity generated from our water and last I looked he still hated the NDP - so how is the NDP guilty of a sell off?

I know! It doesn't matter what happens or who caused it - blame the GD NDP!
Alcan has been given the right to generate electricity from our water, for a certain length of time, as long as the contract is in force, legally.

If political dissent and ideological differences are perceived by you as *hate* you do have a big problem, in my opinion.
I would suggest that Campbell's attitude towards the NDP, and the way he behaved towards their two MLAs during his first term is a clear indication that his interaction with the NDP is based on far more than "political dissent" and "ideological differences". It is clear that he has a personal antipathy towards those who oppose him, and his behavior towards them was clearly vindictive, as so many people noted while it was going on, and a significant factor explaining why so many NDP MLAs were elected this last time, in my opinion.

It is notable that you did not comment on the other points in my post. Does silence show agreement?

Very well said ammonra! I couldn't agree more.
Ok, ammonra, you asked me to comment.

Well, I respect your opinion even though I don't entirely agree with it. The two NDP MLAs didn't exactly behave in a moderate or polite fashion either, in fact when it comes to being antagonistic and vindictive I think that they probably emerged as the clear winners. Tit for tat; now history.

I applaud Mr. Harcourt's efforts and I think of him very highly. His suggestions about diversification are in line with what I have been promoting (even on this site, with comments) as far as the Kitimat and Alcan issue goes.

The fact that Alcan is a primary metals producer of cast ingots and extrusion ingots is a great asset for Kitimat as the next logical step would be to promote a large employment intensive secondary aluminum industry for the city.

Secondary meaning: casting of alloy wheels for the emerging China, Korea and India automobile manufacturers (each vehicle requires at least 4 wheels), fabrication of aluminum extrusions such as you would find in door and window frames, rolling of aluminum foils and sheets etc.

With the completion of the Rupert port facilities and the desire to utilize the port of Kitimat more fully there are new opportunities too numerous to mention.

The government, the company and the city of Kitimat ought to bury all their respective hatchets and sit down together to discuss how to create a win-win-win outcome for everyone concerned.

If Mr. Harcourt could be persuaded to accept an appointment of facilitator in such an effort - all the better for it!

He has a likable personality (in my opinion) and a reputation of integrity and respect for others.

By the way, you may one of these days decide to at least acknowledge the fact that even though one may not fully agree with the outcome of a certain legally binding contract in the long run, one must still respect the legality of it and stop making suggestions to the contrary, that it is not so.
A much more informative posting.

I acknowledge that the courts have said Alcan may sell whatever "surplus" electricity they want to, even if they make it surplus by closing the smelter. I think the Judge did not assign enough weight to the BC government's obvious intent to promote industry with the electricity produced and that intent was the primary motivation for signing the agreement, however. My reference to Mr. Campbell was about the rates he was willing to endorse that were turned down by BCUC.

I do agree with Harcourt that it is better to come to some agreement as to how best to use the electricity for the benefit of the whole province. Agreed resolutions are almost always more effective than court or government imposed ones and far preferable.

Just selling the electricity to the USA may make us good neighbors, but it does nothing to increase employment levels in BC when we have an increasing population needing an income. Like you, I wish there could be some industrial activity in the area to use that power.
A much more informative posting.

I acknowledge that the courts have said Alcan may sell whatever "surplus" electricity they want to, even if they make it surplus by closing the smelter. I think the Judge did not assign enough weight to the BC government's obvious intent to promote industry with the electricity produced and that intent was the primary motivation for signing the agreement, however. My reference to Mr. Campbell was about the rates he was willing to endorse that were turned down by BCUC.

I do agree with Harcourt that it is better to come to some agreement as to how best to use the electricity for the benefit of the whole province. Agreed resolutions are almost always more effective than court or government imposed ones and far preferable.

Just selling the electricity to the USA may make us good neighbors, but it does nothing to increase employment levels in BC when we have an increasing population needing an income. Like you, I wish there could be some industrial activity in the area to use that power.
"The fact that Alcan is a primary metals producer of cast ingots and extrusion ingots is a great asset for Kitimat as the next logical step would be to promote a large employment intensive secondary aluminum industry for the city."

While it would be great if that were the case, I do not believe it is a logical from a market diven point of view at all.

Other than aluminum in sheet forms such as foil, or woven forms such as screens, or solid extruded bar forms, the typical aluminum product is a more complex structural shape which has a lot of space associated with it to push the aluminum to the outer edges of the shape in order to increase the structural capacity per unit weight.

While sending aluminum hubs, window sections, etc around the world does not increase the weight shipped, it does increase the bulk considerably. Transportation cost is becoming a major factor in the world manufacturing scene. In addition, we have the double whammy of having a high wage rate in this country, as with most western countries which also works against us. On top of that, Kitimat is a small community and thus suffers from poor access to a continual flow of labour resources.

The turnkey developer/builder I used to work for in Toronto worked with Reynolds aluminum in those days to manufacture window and sliding patio door sections specific to the 20+ storey apartments we designed, built, managed, and sold. That is 200 to 300 suites per building with about 500+ windows and 200+ patio window/door combinations. For very little additional money we were able to get special sections made for our need. The dies were kept for our buildings and special orders were placed. We could see the dies, see the trial extrusions and sign off on them all within a very short period of time. The same factory was making standard screen doors for the general market as well railings, rails, ladders, etc.

That factory was located within a 200 mile transportation radius to Canadian users of 25% of the population of Canada and a 200 mile radius of a USA/Canada population virtually the size of Canada.

It makes more sense for Alcan to set up shop in another country near a large population base, send the ingots there and add value there at a lower transportation cost to the masses, lower labour cost, and send back any small quantities to Canada if there are no local manufacturers.

The only reason Alcan is in Kitimat is because it has cheap electricity and is on the marine highway to bring in bauxite and deliver ingots. The only reason it is in Australia is because they have the bauxite.

About 45,000 of its 70,000 or so employees throughout the world are located in Europe which is still managing to hold on to a considerable amount of manufacturing capacity, especially in high end products which often use metals such as aluminum..

While it makes more sense for Alcan, it may not make more sense for this country and where it is heading down the road when this keeps on being the situation. The US is facing the same situation with respect to loss of manufacturing capacity. I think about 3 million manufacturing jobs have been lost in the last 6 or so years.
"On top of that, Kitimat is a small community and thus suffers from poor access to a continual flow of labour resources."

It is small because Alcan is basically the last big employer and people are leaving the community when they are young as there are no jobs for them there. Now another 500 jobs may be gone - so it is going to get even smaller.

Like Alberta, create the industry and the requirement for employees and they will come from as far away as Newfoundland!

I have met several young people here in Prince George who where born in Kitimat and left Kitimat only because they did not see any jobs or future there.

Alcan does have secondary industry in Canada and has had for many years.

Well, all your other points are peripheral and interesting. What is needed here is a leap of imagination and co-operation and at least a bit of positive thinking about our own Canadian potential and technical abilities.

Rather than look ad infinitum for all the negative reasons why it could not be done I, for one, would choose the positive options of making use of all the assets that are there already and that are in the process of coming on line.

Trying to force Alcan to exclusively make only a low tech product like ingots just to ship them out for others to make big bucks with is not where the future lies.

Excuse my optimism, but I sincerely hope that Kitimat will get the promised *in the vicinity* industry that was envisioned more than half a century ago with the start of Alcan's new secondary aluminum manufacturing plants. Other industries will follow suit!

Now is the perfect time.
IMO Terrace would be the perfect location for a Toyota plant for the North America market. The new container port brings in the parts from Japan, and the mouldings could be done in Kitimat. Badda bing badda bang you have diversification.

For a couple of years I used to build aluminium railings for balconies and sundecks as well as provide services to other manufactures in town and always figured PG could use an extrusion plant. PG has some of the biggest users of aluminium in Western Canada. Companies like CC Industries or the truck box and trailer and river boat manufactures in town, which in some cases have a potential to dominate the manufacturing side of things in Western Canada. IMO the biggest thing holding back the PG manufacturing industry is the higher cost to import aluminium. The market for the end product is well proven as is the capabilities of our local manufactures. I think that was why there was at one point talk of an extrusion plant in Salmon Valley that never did go through and our region suffered the loss of opportunity as a result.

If Alcan was smart they would look at subsidizing in the early years if they had to for these kind of diversification projects in the region to show good will, knowing full well they can make a killing in the long run with much less political opposition.
Actually the thing about a demonstration of good will coming from Alcan is a very good suggestion! Alcan's PR people probably aren't clued in fully about the reality of how people feel on average in the Northwest and the rest of the province.

Perhaps one of Alcan's officials reading the comments here (they do, judging from previous feedback) can take this back to the head office.

It sure would help a lot to smoothen out some of the jagged edges.
"What is needed here is a leap of imagination and co-operation and at least a bit of positive thinking about our own Canadian potential and technical abilities."

I grew up in Ottawa during the days of the Avro Arrow and Alouette series of Satellites, Atomic Energy of Canada (Candu reactor).

People in my part of town (west end and the beinnings of Kanata) worked for Computing Devices, Nortel, Bell Northern Research, eventually software such as Corel, Microsystems, the forerunner for virtually every high tech industry that exists right now in Canada.

My girlfriend’s dad was one of the engineers who was a member of the team who worked on the Alouette satellite which was the first Canadian satellite and only the third country to have its own satellite in space. It lasted many years longer than predicted due to its quality. I was with them the night of th launch and it was one hell of a celebration!

Many of those people worked on programs which were feeding the Avro Arrow project. When that was cancelled, two good friends of my parents went to the USA, one to teach at SUNY, and the other to Boeing. That was muliplied a hundred + times throughout the city. The incubator for high tech in Ottawa and Canada was dealt a major blow which took a decade to recover from.

Today’s Canadian potential scene - Bombardier .... largest producer of rolling stock in the world I believe .. third largest supplier of aircraft in the world .... moved up from inventing a little machine that travels over snow ...
http://www.bombardier.com

Communications technology - firms such as MDA (MacDonald Detwiler) working in space imaging and robotics – grew up out of the satellite imaging projects in the prairies put in place to help the wheat farmers. Canada was a pioneer in satellite imaging and still is a contender.
http://sm.mdacorporation.com

Alcan itself .. mining, smelting, and the whole range of aluminum products from low end packaging of lipsticks to high end stressed skin structural components. A great marriage of taking a raw material (hydro energy) and extending the value added component of that to the most common every day product used to the world over. If only we could do that in Forestry. But the scandihoovians are beating us at that in many ways.

I know the ability of Canadians very well. I have lived part of it it with those who are world class competitors.

I am also seeing the transformation of Vancouver from the capital of Canada’s hewers of wood and drawers of water to a much more economically diverse and sophisticated city on the world scene. It is not going to go die off very quickly. But Vancouver takes care of itself. It needs to in order to survive. It no longer depends on Kitimat, Prince George, Kamloops and even Nanaimo.

People come to Alberta from everywhere because they are high paying jobs for grunt work associated with the oil and gas industry. Burger flippers for 2 and 3 times minimum wage. Welders at twice the rate of those working in a manufacturing environment. They do not go there for just any job. They are today’s gold seekers. They want a quick buck. Manufacturing aluminum wheels is not an “in it for a quick buck” industry.

Do I have a solution for Kitmat? No …. I am just aware of the problem …
Recognizing and understanding the problem is the first step in the process of finding a solution. It is not negative thinking. It is positive thinking on the way to solving something. Once the problem is recognized, it is time to find out how others are dealing with similar problems, and if that does not work, then it is time for creativity to take over.