News Releases and Op-Eds
D'Avignon Op-Ed: Great News for British Columbia
Remember June 11and 12, 2015. We will look back on this 24 hour period years from now as a point in which B.C. started to see a material change to its economy. Specifically, it was when some $44 billion worth of investment decisions were made in two separate projects that will strengthen B.C. as a significant player in two global sectors: energy and shipbuilding.
Pacific NorthWest (PNW) LNG announced their positive final investment decision, subject to two conditions. The $11 billion LNG facility near Prince Rupert and the corresponding investments in pipeline and upstream gas production in the Northeast of the province amount to a total capital outlay of $36 billion through the life of the project.
Hours later the Government of Canada and Seaspan announced that they had reached an agreement in principle that will see the construction of the first three Canadian Coast Guard vessels of Seaspan’s $7.3 billion National Shipbuilding Procurement Strategy, Non-Combat package. These vessels, along with up to 13 other ships, will be built right here in British Columbia. This will create an estimated 5000, direct, indirect and induced jobs over the next 20 years and produce almost $500 million per year in GDP for B.C.’s economy.
Why does this matter? The answer is simple: these are new industries that, combined, will drive ten times more capital spending in B.C. than any other project ever undertaken here. The largest project until now has been the almost $5 billion Rio Tinto smelter upgrade nearing completion in Kitimat.
While the PNW LNG project and the Seaspan shipbuilding contract expect to generate, at their peak, a combined 10,000 jobs in multiple regions of the province and in exciting industries, they will also create opportunities for suppliers and small and medium sized businesses and people seeking opportunity and experience. Seaspan has already signed over 200 contracts valued at $211 million with 137 companies in Canada. Professional services such as environmental engineers, accountants, and technology experts will see the benefits of these projects, as will other community based businesses such as trucking firms, security, electrical and machinery companies, hotels, restaurants and retailers.
Sustainable, technology driven projects like these generate large amounts of tax revenue, spanning multiple decades, that provide governments with additional funding to support healthcare, an aging population, education, infrastructure and other quality of life necessities and services we all expect. Once in operation, PNW LNG anticipates contributing approximately $1.2 billion annually to federal, provincial and municipal governments through taxes and royalties. To put that into perspective that is equal to about 20 percent of the province’s education budget in 2015-16, positively impacting people not just balance sheets.
These spin off benefits will magnify the economic impacts of the original $44 billion in capital outlays announced last week, to something approaching $100 billion in total economic activity that will tie the province together and create new opportunities for people today and future generations.
They will not succeed without the north working with the south, labour aligned with professionals and management, urban communities connected to rural, and local interest connected to global understanding and opportunity. The result will deepen B.C.’s links with global markets and enable us to compete as a people and an economy, and not just in the energy and shipbuilding sectors.
I don’t want to claim that these two projects are the panacea for B.C. We still need more good-paying jobs, more efficient and timely government decision-making processes, and a stronger effort by business to communicate with the public on the scope, benefits and challenges of economic development. But last week’s news does send an important signal that projects can move forward in British Columbia and that we welcome inbound investment. When government, industry, First Nations and communities work collaboratively together we can get things done. These are valuable lessons for British Columbians to ponder.
Both the PNW LNG and Seaspan projects also include First Nations in respectful, meaningful ways that will advance true economic reconciliation and contribute to improved health and education outcomes for future generations of First Nations. These, and future investments, will help all people of British Columbia realise the social and economic prosperity we aspire to achieve.
So whether you live in Burnaby, Victoria, Dawson Creek, Prince Rupert, or North Vancouver, you and your family should welcome these two decisions to say “yes” to B.C.
Remember June 2015. The decisions to proceed with these two large projects can open the province to further investments and more high quality employment, spur new technology adoption, and give more of our people the opportunity reach their full potential and government the resources to support the quality of life we expect.
This is great news for British Columbia.
By Greg D'Avignon, President and Chief Executive Officer, Business Council of British Columbia
Photo credit: BC Shipping News