For the first time, the province has committed to negotiating a revenue-sharing agreement with northern local governments.
Premier John Horgan made the announcement today in speaking to local government leaders at the Union of B.C. Municipalities convention in Vancouver.
It follows a long-standing lobbying campaign by 18 municipalities and three regional districts in northwestern B.C. gathered together as the Northwest Regional Benefits Alliance (RBA).
Formed in 2014, the RBA has been seeking a share of what the province receives in taxation from industrial projects, saying that while those projects have an impact on services provided by local governments, those local governments don’t often have a way to tax those industries in return.
“It’s not all sunshine and roses when it comes to [significant industry development], there’s social disruption that comes with it, strain on infrastructure,” Premier John Horgan said to local government leaders.
“This week we recommitted to ensure the [Northwest Resource Benefit Alliance] work that has been done by governments right across the North, and by officials in Victoria, is a reality in the years ahead. We need to get an agreement in place that will stand the test of time, that means if a government changes, we will be ensuring that resources that are created in a community, to the best of our ability, stay in that community so everyone benefits.”
Horgan commended Terrace city councillor Sean Bujtas, Prince Rupert Mayor Lee Brain and Houston Mayor Shane Brienen for their work on the RBA board to advocate for communities dealing with infrastructure and social impacts caused by major industrial developments, like the $40 billion LNG Canada facility in Kitimat.
READ MORE: ‘What’s in it for Terrace?’ City braces for impacts of LNG development
This commitment from the province provides clarity on the government’s level of responsibility when it comes to negotiations with northwest B.C. municipalities to establish a fair revenue-sharing agreement.
In February, the province announced $100 million grant for northwest communities to help northern communities address outstanding infrastructure needs.
A revenue-sharing agreement would ensure funding is sustainable over the long term, Horgan says.
“Although I’m not going to stand here and say we’re going to solve all those problems, I have been saying, as my minsters have been saying, we’re going to make sure we make those challenges disappear in the long term, if not in the short term, and we do that by working together,” he said.
The RBA could be a major tool when helping rural communities prepare for positive and negative impacts that come with regional economic activity, communities with budgets ill-equipped to deal with complex, expensive ramifications.
Revenue sharing agreements have occurred between the province and local governments before when major industry developments lie outside local tax assessment areas.
READ MORE: RBA tells province: let us be your testing ground
“Twenty-five per cent of Rio Tinto Alcan employees live in Terrace, so I think it’s fair to assume 25 per cent of LNG Canada employees are going to live in Terrace,” Coun. Bujtas said earlier this year at a committee of the whole meeting. “That’s our struggle and why we push for the RBA because we think it’s going to help.”
The City of Terrace receives approximately $13 million in property tax revenues per year and around $809,647 annually in industrial taxes. In comparison, Rio Tinto’s aluminium smelter generates $19.5 million per year in taxes alone for the District of Kitimat.
Bujtas says the province’s commitment to negotiate a revenue-sharing agreement is a major step forward.
“We’re really happy Premier John Horgan, finance minister Carole James and municipal affairs minister Selina Robinson recognized there is a need for a revenue-sharing stream in the Northwest and they’re willing to sit down at the table and start negotiating,” Bujtas says. “There’s a lot of work ahead of us still, we’re not there yet, but this is a massive step in the right direction.”
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