City officials say they are frustrated that LNG Canada isn’t taking direct responsibility for increased demands for civic and other services arising from its $40 billion Kitimat liquefied natural gas project.
The city is part of a regular series of meetings to discuss social and other impacts of LNG Canada but so far any effects are being labelled as “indirect”, says city Chief Administrative Officer Heather Avison.
“We appreciate that we have the opportunity to speak, but so far there’s been a real lack of wanting to accept responsibility for Terrace from LNG Canada and the province. It’s been very frustrating,” she added.
The city has been compiling a list of increased demands for its services and last week told residents an eight per cent jump in property taxes is necessary to cover additional firefighter and policing costs.
“Essentially everything we have to say goes over on that [indirect] side,” Avison says of the city’s participation in what’s called a Social Management Roundtable (SMR), a mechanism that was established as a condition of the B.C. government’s approval for the LNG Canada project.
“There seems to be a real hesitation on everybody’s front to accept any kind of responsibility for the impacts we’re seeing here.”
During the last meeting in November, the city highlightedc multiple challenges as the project builds out. Residential house resale prices are higher in Terrace than in Kitimat, there is an elevated demand for social housing, and there is a slight increase in hotel and motel vacancies and pricing.
With increased economic activity and population growth, more demand is already being placed on city services as well.
Terrace RCMP reported an 18 per cent increase in calls during the third quarter of 2019, with a 37 per cent increase in offences against people and property, drug offences, and motor vehicle offences.
The Terrace Fire Department has been a 35 per cent increase in calls, a nine per cent increase in ambulance services, and a 33 per cent increase in urgent calls.
Workers flying into Terrace to work at the project in Kitimat are also thought to be a major driver of the 21 per cent increase in passengers moving through the Northwest Regional Airport.
In comparison, Kitimat reported a 14 per cent increase in RCMP calls, and a 23 per cent increase in crime. Residential housing prices remain elevated at a higher rate than in Terrace, with increased demands for social housing and slight increase on hotel and motel vacancies and pricing.
According to statistics from January to October 2019, there was a 28 per cent decrease in Kitimat Fire and Ambulance Services fire-related calls, and a two per cent decrease in medical-related calls, though data gathered from November to December was not included in this annual comparison, says Kitimat Fire Chief Trent Bossence.
“There will be a slight increase especially in the medical end of things. Where it’s going to be we don’t know because it’s not the end of the year yet. Depending on where our numbers end in December will give us a true meaning of what our stats were compared to 2018,” Bossence says.
District of Kitimat Mayor Phil Germuth praised LNG Canada for its work over the years to mitigate social impacts felt in Kitimat, saying this is the first time an industrial proponent has invested so much in the community.
“From my own experience in reacting to issues when they’ve come up in the past, it’s boom – I get a call back right away and they work on it right away,” Germuth says.
He said that while Terrace is in an unique situation when it comes to facing pressures from growing regional economic activity overall, he wasn’t convinced that the City is being impacted directly by LNG Canada.
Germuth said the revenue-sharing agreement with the provincial government that is being persued by the Northwest Regional Benefits Alliance’s (RBA) could potentially offset the effects of rapid industrial development in the region. He also mentioned the province’s infrastructure grant program to Northwest municipalities, of which the City of Terrace received $8.2 million and the District of Kitimat received $1.5 million.
But with no expectation for when an RBA agreement will be signed to flow revenue into municipalities before these projects start operation, Germuth was asked if Kitimat would be open to discussions with the City of Terrace about possibly giving the city revenue in the short-term to deal with immediate impacts.
Germuth says it’s the province’s responsibility, as the District of Kitimat doesn’t have any extra money to give, regardless of the $19.5 million in industrial taxes that Rio Tinto’s aluminum smelter generates annually for the municipality.
“If you go through our budget line items of all the extra projects we would like to do, I don’t see that being possible,” Germuth says, noting the district has increased their RCMP and municipal staff to deal with the added pressure.
“We don’t have any extra money to hand out to anyone else – let’s be honest, there’s nothing there. The answer to the issues we’re facing is to get the [RBA] moving along because part of that was to have funds going to communities who are dealing with the impacts during construction of these projects before that tax-base comes flowing in.”
Though there’s more to add to the list for Terrace, with Avison noting the city has yet to talk in detail about capacity issues with the city’s infrastructure to service the expected growth. The city’s population could double within 10 years, with up to 21,000 residents at the 2030 build-out of the LNG Canada project.
In the minutes for the last meeting in early November, LNG Canada notes that while a portion of the increase in demand may be directly attributed to the project and its workforce, “however, much of the change in demand may also be attributed to the general increase in economic activity and population growth through inmigration by individuals seeking employment or other economic opportunities, and the overall increase in disposable income reaching communities.”
Susannah Pierce, director of external relations for LNG Canada, says the SMR looks at a number of key criteria, including housing and accommodations, traffic, emergency response, community health and others, and then determines how to manage the social impacts.
When asked about concerns that Terrace is going to be left behind, Pierce says the key to addressing these issues is to sit down and have conversations on how stakeholders can work together.
This is the first time LNG Canada has held discussions like this, so the roundable will learn how to navigate discussions as the meetings continue, Pierce says, mentioning there will be an annual report published online.
“I think we’re all figuring it out, but it provides a really good forum to come together in a collaborative approach to say, hey, this is what we’re seeing, so we can sort it out and ask how we can address this.”