Pipeline revenue share should match risk to B.C.

MLA Bill Barisoff

This week the British Columbia Government announced further information with respect to the potential for future pipeline development here in our province. As many citizens are aware, there is currently a pipeline proposal and related environmental review process currently underway for a potential project in northern B.C.

One of many challenges identified in an independent report on this proposal identifies an imbalance between the revenue sharing potential as it relates to the risk.

Currently it is estimated that this project would yield close to $80 billion in government tax revenue over the next three decades. Of that $80 billion, it is expected that roughly $36 Billion would flow to the federal government and Alberta would gain a significant share of $32 Billion.

The remainder would flow to other provincial governments, with B.C. expecting a share slightly in excess of $6 billion. In terms of a percentage that equates to just over an eight per cent share of the total combined government revenue.

The actual proposed pipeline length is close to 1,200 kilometres and well over half that length, close to 700 kilometres, would be located within B.C. In other words, our province would be carrying close to 70 per cent of the risk by land and 100 per cent of the risk once tanker loaded – in exchange for less than 10 per cent of the government tax revenue.

As a result, the BC government has indicated that a more equitable revenue sharing relationship would be one of many conditions to be negotiated before such a project would receive provincial support. Aside from the fiscal considerations, the provincial government has re-affirmed the long standing position that the current environmental review process must be completed with a recommendation to proceed from the National Energy Board joint environmental review panel.

Other considerations to be met include significant increases for world leading standards in areas such as spill response and prevention including recovery as well as developing mitigation and enhancement strategies.

For example, legal response times and the amount of emergency recovery capacity in jurisdictions like Alaska is currently more stringent then here in Canada. Further requirements are towards sustainable funding to ensure that industry provide sufficient funds and not taxpayers in the event that emergency work is required.

Consultation and partnerships with affected First Nations communities will also form part of the criteria to ensure that financial benefits are shared with agreements that provide certainty. Since 2003 the BC government has created close to 200 revenue sharing agreements in the forestry sector that help increase first nations participation in local resource economies and also to help create employment and training opportunities.

Although this is a brief summary of this week’s announcement it does not ensure that this project will be successful. There are clearly many variables and standards that must be met however this criteria helps to clarify the groundwork that would be required to ensure that if such a project were to get underway, it would be a world leading project to the highest standard.

While resource development is a key part of our province’s economic future, environmental risks must be mitigated while economic benefits are enhanced to the benefit of all British Columbians.