FIRST NATIONS AND LNG

Indigenous nations will be the first to benefit when natural gas pipelines go into the ground this year in northern B.C. – but they won’t be the last FIRST NATIONS BENEFIT FIRST FROM LNG

FRANK O’BRIEN P erhaps as early as this autumn, approximately 8,200 members of 14 First Nations in northern B.C. will receive the first payment in what will be a 40-year, multimillion-dollar benefits package

tied to the liquefied natural gas (LNG) pipeline that begins just north of Chetwynd and ends 676 kilometres later at the LNG Canada export terminal in Kitimat.

Under benefit agreements worked out over the past six years to ensure the largest industrial project in B.C.’s history would proceed, First Nations along the route were offered what appear to be life-changing deals that include cash, jobs and business opportunities.

Each of the nations, some of which have fewer than 200 members, will share $10 million annually from the British Columbia government as long as the pipeline is pumping – an estimated 40 years.

In addition, Indigenous bands will receive initial cash payments that total $31 million, or an average of approximately $2 million per community.

Half of these incentives are paid 90 days after the first 25 kilometres of pipe – known as the first spread – is in the ground. The pipeline contractor, Coastal GasLink, estimates that this official commencement of construction could be as soon as this summer. The final half of the incentives is paid 90 days after the pipeline begins fuelling the $13 billion LNG Canada terminal at Kitimat.

LNG Canada has signed separate impact benefits agreements with First Nations in Kitimat and along the shipping route, but the agreements “are considered commercially sensitive documents, not unlike a business contract, so we aren’t at liberty to discuss specifics,” says an emailed statement from Susannah Pierce, director of corporate affairs at LNG Canada.

One of the largest B.C. government payments goes to the Wet’suwet’en First Nation, which represents the most populous Indigenous organization under the agreement, with 1,921 members. As BIV Magazine went to press, anti-pipeline protests in support of Wet’suwet’en hereditary chiefs were shutting down rail service and roads across the country. The elected band council of the Wet’suwet’en people supports the construction of the Coastal GasLink pipeline, while hereditary chiefs do not.

As it stands, the Wet’suwet’en, located near Smithers, is in line for $4.8 million, plus a further payment of $988,000, according to government documents, as well as an annual payment of what could be $714,000 per community, if the $10 million in annual payments is evenly divided among the 14 nations.

Tiny bands – even those less than 10% of the size of the Wet’suwet’en – will also benefit from the project. The 186-member Skin Tyee Nation will receive incentives of $2.3 million, plus an additional $466,000 and a share of the $10 million in annual payments.

Members of the Ts’il Kaz Koh First Nation (the Burns

A rendering of the LNG Canada terminal being built in Kitimat • SUBMITTED

Lake Band) will receive initial payments totalling $954,500. When the annual payments are factored in, the community of 144 people could receive nearly $1.6 million the first year the LNG pipeline begins producing.

In announcing the first benefit agreements in March 2014, the B.C. government estimated that the LNG project would generate $22 billion in direct government revenue over 40 years, beginning when the first LNG tankers leave B.C.’s north coast for Asian shores, which is expected by 2025. To put LNG Canada in perspective, the current total natural gas production in B.C. and Alberta combined is 15.5 billion cubic feet per day. LNG Canada will have a capacity to accept 1.7 to 3.4 billion cubic feet per day.

Each tanker leaving Kitimat would hold 170,000 cubic metres of LNG, worth about US$24 million at January 2020 prices (which were at a 10-year low). There will be up to 300 tanker shipments per year. For many in the north, there is less concern about how the money is split up. Local municipalities stand to benefit through local taxation and are just glad the project is finally underway. Since the LNG Canada consortium made its final investment decision in October 2018, $870 million in contracts has been awarded, much of it to local firms. As of this January, 1,000 workers were employed on the pipeline right-of-way.

To November 2019, the most current figures available, the project has generated in excess of $107 million in local spending and more than $77 million in indirect economic spinoffs, according to a Coastal GasLink report published January 20. “Not only does construction create thousands of high-quality jobs, it creates demand for things like equipment, food services, accommodation and more. Our contractors are mandated to source local wherever they can, including equipment and supplies,” says Dan Bierd, Coastal GasLink’s vice-president of pipeline implementation.

Bierd adds that prime contractors are required to provide local and First Nations participation plans prior to being selected, along with regular updates on that co-operation. To date, more than one-third of all fieldwork completed on the project has been conducted by Indigenous people, he says. It is estimated the entire LNG project will

EACH TANKER LEAVING KITIMAT WOULD HOLD 170,000 CUBIC METRES OF LNG, WORTH ABOUT US$24 MILLION AT JANUARY 2020 PRICES (WHICH WERE AT A 10-YEAR LOW). THERE WILL BE UP TO 300 TANKER SHIPMENTS PER YEAR

Fred Wilson, owner of Northwest Truck Rentals in Smithers, had this huge sign built to welcome LNG Canada to his northern B.C.

community • SUBMITTED

generate 10,000 full-time jobs during construction, and throw an economic lifeline to northern companies that are facing a slowdown in the forestry sector and persistent delays in getting B.C.’s first major LNG project up to speed. One of those company owners is Fred Wilson of Northwest Truck Rentals in Smithers, who is supplying rental vehicles to Coastal GasLink and its contractors.

“The spinoffs [from LNG] are huge,” Wilson says. “It has a massive trickle-down effect.” Wilson himself plans to add commercial space to his 3.5-acre lot on Highway 16 to meet local demand.

In December, Wilson put his mechanic to work building a 60-foot-long lighted sign to show his support for the LNG project. “My mechanic spent 39 hours making that sign. We wanted to bring some awareness to the project in our backyard,” he says.

Like other business people in the north, Wilson is aware that LNG Canada, a consortium led by Royal Dutch Shell that includes Korea-based KOGAS, Japan’s Mitsubishi Corp. and Petronas of Malaysia, could be just the start of the LNG industry in British Columbia.

Chevron Corp. and Woodside Energy have applied to build Kitimat LNG, a second export terminal that could be in production within a decade. É

SECTOR SNAPSHOT: RETAIL Hard-hit retail sales expected to rebound

Albert Van Santvoort

B.C. retail sales were hit hard in 2019. According to the province’s latest economic outlook, sales registered a mere 0.5% growth over 2018. Fortunately, sales are expected to pick up in 2020. The province expects retail sales growth to reach 3% this year, 3.3% in 2021 and 3.5% the following year.

Retail sales’ poor performance last year may not come as a surprise. Bricks-and-mortar retailers both big and small have been disrupted by e-commerce. In locations such as Vancouver, some businesses have struggled with issues around affordability. These trends have created a barbell effect in the Canadian retail landscape, where retailers tend to offer luxury brands or discounted products, with few outlets servicing the middle market in between. According to Retail Trends in Canada 2019-2020 by BDO, this market polarization is expected to intensify, making that mid-priced retail market a challenge for independent and mid-market retailers who may be forced to pick a side to survive.

Forestry Innovation & Opportunity in the Northern Rockies!

The Northern Rockies Regional Municipality (NRRM), with Fort Nelson as its service centre is located in British Columbia’s northeast corner of BC and with the worldfamous Alaska Highway as its main street. At approximately 86,000 km 2 , it covers almost 10% of the province – it’s larger than Austria … and is home to 5,000 “can-do” northerners to whom hard work, self-suf¿ ciency and innovation are second nature.

Like Us ... Our Forest is Different Where coniferous species dominate in the rest of the province, the NRRM’s forest is made up of mixed-wood, primarily aspen and spruce, sprinkled with pine, cottonwood and birch. Our diverse ecosystems, wildlife habitat and vegetation also set us apart and have spawned a variety of cultural and recreational values worthy of celebration. These factors combine to provide a range of economic RSSRUWXQLW\GLI¿ cult to match. The aspen resource alone, for example, has been deemed “...a high-quality resource, considerably higher than the aspen in other areas of Canada,” by the widely-recognized industry authority FPInnovations.

A Regional Municipality Rooted in Resource Development The economy of the Regional Municipality has historically been driven by the resource sectors of forestry and natural gas. The global ¿nancial crisis of 2007-2008 and the subsequent decline in global pricing and demand for Canadian natural gas (2014) have resulted in a signi¿cant curtailment in natural resource-based activity and resulted in the closure of Canfor’s OSB and plywood mills. The resources on which previous industry thrived remain in abundance however, poised for renewal. ___________________ 1. FP Innovations. “Aspen Utilization in the Northern Rockies...” (2017) https://nr.civicweb.net/document/147550 Taking Initiative Is What We Do! Never content to await others to address our needs, the NRRM initiated the Forestry Rejuvenation Project in 2013, and has forged a partnership with the province and a local First Nation, to secure greater inÀ uence over its own economic destiny. This initiative has borne fruit in the form of the largest Community Forest license yet granted in the province (~217,000 m 3 ). Based on the positive ¿ndings of Phase 1 of an Aspen Study, the NRRM initiated a second, more comprehensive investigation considering a range of uses for our Aspen from panel products through lumber and Laminated Veneer Lumber (L9/DQGFRQ¿ rming initial ¿ndings.

In 2019 the Fort Nelson TSA saw an increase of almost 60% to 2,582,350 m 3 .

As word about Northern Rockies Aspen travels, investors have shown keen interest in both traditional uses and other more innovative ones. The release of the second edition of a Forestry Investor Package Overview Report on Northern Rockies Aspen/ Hardwood Resources, in November 2019, has further heightened interest.

The Timber Supply: Healthy, Sustainable & Increasing The Annual Allowable Cut (AAC) for the Fort Nelson Timber Supply Area (TSA) recently underwent a review and, while harvest levels elsewhere in BC have seen signi¿cant reductions in AAC levels, that of the Fort Nelson TSA saw an increase of almost 60% to 2,582,350 m 3 , exclusive of the AAC allocated to the Community Forest. At the same time, along with Fort Nelson First Nation, the NRRM is engaged with the province in a process to ¿ nd a positive balance between conservation concerns and socio-economic interest related to the protection and restoration of Boreal Caribou in the region.

We are Ready to Grow The NRRM has planned ahead for growth; a Regional Economic Strategy (RES) has been developed and is being implemented to plot a sustainable path forward. With the assistance of the province in the form of a 20-year, $200 million shared-cost agreement, and using an awardwinning asset management program, we have maintained and upgraded key components of our infrastructure including ¿rst rate recreation facilities.

The government of BC’s investment in the Northern Rockies attests to their assessment of our future potential. The NRRM is strategically positioned as the service centre for resourcebased activity in the region. Key transportation assets include the Alaska Highway (97 – north/south), Highway 77 (East – NWT/Alberta), CN Rail railhead access, and the recently upgraded Northern Rockies Regional Airport, hosting regular scheduled and charter air service. Our transportation capacity, complemented by a full suite of amenities and affordable housing, render the Regional Municipality capable of meeting the needs of residents, business and industry now and into the future.

What’s Missing? We like to think that we offer the complete package… resources, amenities, infrastructure, energy and determined, capable people. We are the Northern Rockies, and we have a vision for a prosperous sustainable future! We want to talk to you about where you ¿t into the picture.

Call or email our Regional Development Of¿ cers: Call orem Devel

Jack Stevenson or Mike Gilbert invest@northernrockies.ca 250.774.2541 www.northernrockies.ca >Business>Economic Development