By Auli Parviainen
Published: June 6, 2014
Locally in Squamish, LNG is quickly becoming a divisive issue with the battle lines drawn mostly in the environment versus industry and jobs axis. Setting aside the very serious environmental impacts and risks, many Woodfibre LNG supporters appear willing to overlook.
So, let’s focus on the economics and see whether LNG really is the way to the Promised Land for Squamish and BC.
Certainly 100 permanent well-paying jobs in addition to the $1.7 billion facility and tax revenues reminiscent of the resource industry glory days of Squamish’s past echo strongly. Unfortunately the facility is likely to be built in Asia and shipped to the site. We will gain new residents from the highly-skilled labour filling the positions and there will be compounding economic impacts for Squamish although no one seems to know how much.
Minister Rich Coleman responsible for developing the LNG industry has indicated that the province might cap the local property tax rates to maintain competitiveness. I am not sure where the wildly optimistic property tax revenue estimates stem from, but they certainly don’t seem to match Coleman’s direction. The province’s proposed a two-tier income tax structure (1.5 per cent and 7 per cent), which taxes on the net proceeds after the capital cost has been exhausted has already met with industry claims of not being competitive enough.
I have no doubt there is money to be made on LNG and that some financial benefit will yield as a result to Squamish. But the costs, in my opinion, far outweigh all the costs in a complex realm – social, economic and environmental along with lost opportunities.
Woodfibre LNG will have a very limited expansion potential thus capping jobs and taxes at their startup level. Our industrial land inventory is sparse and the gas industry operates on a notoriously low number of employees. We could be multiplying jobs per landmass by choosing a different industry from the array already here such as tourism, forestry, lumber, wood processing, rec tech, education, agriculture, research and science, high-tech, transportation, manufacturing and more.
And no, we didn’t and haven’t really tried to sell this site to alternative investment and yes, patience can pay off big dividends. I wan to see more yield to our community to truly multiply the economic impacts.
By saying no to LNG we say a resounding yes to so many who will see Squamish as the leader for a new resilient economy based on renewable resources, sustainability, knowledge and innovation.
It’s time for our community to speak up and demand a say in our collective future. And it most certainly is time for our Mayor and Council to recognize the need for securing the necessary social license from the community.
Wolfgang W says
What you point out are merely the known economic unknowns, but there are also the famous Rumsfeldian ‘unknown unknowns’ (and wouldn’t he and other US decision makers of his time now wish they’d given those more consideration?).
There are two economic angles from which to look at LNG Woodfibre, the narrower one of taxpayers of the District of Squamish, and the wider one of taxpayers of the Province of BC. Other than what the level of Minister Coleman’s proposed capping of property taxes might shave off expected District revenues, plus the potential cost of externalities, estimates of the project’s impact on the local economy appear to be reasonably straightforward.
Provincially? That is another issue altogether: As has been discussed before and is so again elsewhere now, there is the not so insignificant question of whether BC’s Hydro’s electrical bulk rate proposed to be charged LNG Woodfibre is a subsidy or not. Proponents naturally would not view it in that light, but simply consider it something that other large industrial users also enjoy, so why not LNG Woodfibre? Nevertheless, no matter how the math is done, BC Hydro is shown to be materially out of pocket regardless of the terminology used. Such ‘subsidy’, if the result of an industrial policy to attract or retain labour intensive industry which are also known to provide BC and Canada with significant tax and other benefits, may make sense in specific circumstances, but who can say that about LNG Woodfibre? There are still way too many ‘likely’s, ‘if’s, ‘but’s, ‘maybe’s and other expressions of uncertainty or wishful thinking in the narrative of both the project’s proponents and its political backers in Victoria to give comfort.
As to that uncertainties from beyond BC’s shores: A world renowned economic publication has recently run a feature on liquefied natural gas with emphasis on the development of an international gas market under the subtitle “Buyers will gain more than sellers”. BC will face intense competition from elsewhere despite the fact that with new supply will also come new demand and markets. Will BC have the competitive edge, or will there be intense pressure in future from the foreign owners on our government to make more concessions (at BC taxpayers’ expense) to maintain competitiveness?
Lots of questions still to be considered, and whether Councilors, District staff or the public, everyone still resembles the blind man who is trying to figure out whether what he touches with his cane is a tree trunk or the leg of an elephant – hopefully not the proverbial white one.
TJay says
Many small part time jobs, add up to the equivalent of one fulltime job. I know this firsthand. Crying in my beer and staving never worked for me, and was very boring.
And so it is with industry……many smallish ones still add up. To say not, would make one nothing but a sensationalizing liar.
I hope those don’t abound around here.
Geri Avis says
“And no, we didn’t and haven’t really tried to sell this site to alternative investment and yes, patience can pay off big dividends. I wan to see more yield to our community to truly multiply the economic impacts.” What the heck? “We?” This is not industrial land owned by the municipality and you shouldn’t be misleading people in this way. This is private property, who the heck are you to say “we” haven’t tried to sell an alternative investment? And as for “more yield to our community”, name an industry that is going to pay upwards of 2 million in property tax (now that it will be mostly land based). The jobs may be more than 100 and they will be well-paying, union jobs. The plant will be purchasing goods and services from companies such as Squamish Marine Services, Squamish Tugs, Carney’s, Triton Steel, Lordco, Rona, Home Hardware, Save-On Foods, etc., etc., for decades to come. Millions of dollars over the life span of this plant will be infused into this community.
Geri Avis says
Furthermore, supporters of Woodfibre LNG are not overlooking serious environmental impacts for the sake of economic gain but rather opponents are exaggerating, and in some instances outright falsifying, the environmental impacts while refusing to acknowledge the economic benefit.
Glenne C says
I, for one, am very concerned about the name calling and acronyms being thrown about over this debate. As passionate as we all are, these low blows will be used against you. Clear heads people PLEASE.
G_h says
“By saying no to LNG we say a resounding yes to so many who will see Squamish as the leader for a new resilient economy based on renewable resources, sustainability, knowledge and innovation.” Fine but empty words: exactly what you would expect from someone with political ambitions and a background in PR. Reality is that Squamish does not face the binary choice Auli suggests. There is very little sign of her “resilient new economy” appearing any time soon, at least a level that would move the dial on local jobs or tax revenues. On the other hand, the LNG project is the largest potential business investment Squamish has ever been offered by a large margin.
Adam says
G_h, I’m sorry? The trucks are rolling with timber. The commercial fishing boats were in Howe Sound last summer and I suspect will be back near term. Recreation and tourism is BOOMING and will only get better now that we have a proof of case in S2S Gondola. Pink Bike is moving to town, 7Mesh recently set-up shop, Quest just ranked as one of the finest Universities in the entire world. A new private school is opening. A number of new independent rep agencies now call Squamish home and our business incubator is working on some exceptional projects.
So let’s cut the fear mongering shall we. Things are happening in Squamish right now. They might not be business that you understand but these investments in town represent money in the economy. Suggesting otherwise is disingenuous and taken directly out of the Conservatives ‘scare tactics’ playbook. Squamish deserves better than the bs and lies being sold to us by oil and gas.
G_h says
You make the assumption that I am not familiar with the businesses you mention. Let’s consider pinkbike. It’s one of the most successful outdoor recreation web sites in the world (a business sector in which I am personally involved) and, yes, it’s great they are moving to Squamish. However the full-time staff is just a handful of people. 7Mesh is a tiny start-up! I wrote “…. at least a level that would move the dial on local jobs or tax revenues.”. That’s the issue. Thanks to our timid councils and public sector unions we have a cost base far too big for our tax base. We need a large investor and employer here. Furthermore, as a town we should not be turning away legitimate businesses that are successfully navigating the normal environmental assessment processes. Talking of which, Auli Parviainen is campaigning against WLNG with “treasurer of Squamish Chamber of Commerce” in her bio. Has the Chamber taken an official position against WLNG? If not, she should not be mentioning her association.