Video: MLA Rice: LNG deal a bad deal for BC

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J. Rice: I’m honoured to stand before the House today to stand up for my community, for the north coast and for British Columbians.

We on this side of the House support the development of an LNG industry for B.C. We have always said that it needs to meet the conditions of a fair return to British Columbians, who own the resource; jobs for every British Columbian ready to work or be trained; protection for our land, for our air and our water; and true partnerships with First Nations. Bill 30, the LNG project development agreement enabling act, does not meet these conditions.

The project development agreement locks in taxes for over a quarter century, locks in environmental regulations for over a quarter century. It doesn’t guarantee jobs or apprenticeship quotas for British Columbians. It doesn’t include environmental or conservation protections. It ties the hands of future governments. It provides the basis for all other LNG agreements with the me-too clause. It asks for an FID by the next election, not one in the best time frame. And it does not include First Nations as true partners but rather, as I quote, “other matters” listed in the appendix of the agreement.

British Columbians tell us they place high value on our resources, and they place high value on their environment. British Columbians insist that our land, air, water and, particularly in the north and central coast and Haida Gwaii, our fisheries are protected. They realize that we have a resource-based economy, but that doesn’t mean they want our resources given away for nothing. There has got to be a benefit to the people. They expect a fair return for current and future generations in exchange for B.C.’s resources.

This project development agreement is a good deal for the proponents — namely, Petronas — but it’s not a good deal for British Columbians. With a very pompous, obsessional LNG election campaign, the Premier of this province has put us in a very poor negotiating position. She’s locked us into a 25-year deal at a time when natural gas prices are at historic lows. The deal contains zero job guarantees for British Columbians — zero. This deal gives foreign-owned corporations special lower tax rates through the natural tax credit….


J. Rice: I love jobs in Prince Rupert. Thank you to the member opposite for his heckling.

The deal gives foreign-owned corporations special lower tax rates through the natural gas tax credit and guarantees them for 25 years. This is a better deal than everyone else who is doing business in British Columbia and paying their fair share of taxes. In the meantime, British Columbia households are hit with increases year after year in MSP, B.C. Hydro rates, ICBC premiums and more. Wouldn’t we all like our taxes locked in and guaranteed at a low rate for 25 years?

Canadians in other jurisdictions have seen this before, in Nova Scotia, Newfoundland and Alberta — signing shortsighted agreements to give away Canadian resources without a fair benefit to the people who live here and tying the hands of future governments to do anything about it. British Columbians don’t trust this Premier to look out for our interests. While Australian leaders negotiated guarantees for local labour, for local professional services and for local procurement, this Premier insisted on none of these.

We’ve seen in many, many other areas that the Premier looks out for the wealthy and the powerful but not for everyday British Columbians. She’s doubled the cost of a post-secondary education and put punishing fees on adult basic education, reducing opportunity for people to be successful. British Columbians have further obstacles put in front of them to participate in the LNG economy or any other part of our economy by charging adult basic education fees.

My local college, the Prince Rupert campus of Northwest Community College, in the heart of this proposed supposed LNG boom is seeing programs cut, not added for people to participate in the economy. The Premier reannounced the skills-training funding, which already existed, to distract us from the fact that her LNG deal doesn’t guarantee a single job for British Columbians.

People have come to my constituency office this past winter who couldn’t afford to turn on the heat because of their outrageously skyrocketing hydro bills — again the people of B.C. paying more to get less. These are the same people that are going to reimburse the richest corporations in the world if future governments infringe on their profit-making. That is wrong.

The Premier is even allowing Petronas to write their own environmental regulations. We haven’t seen their long-term royalty agreement, which was passed in the miscellaneous….


Deputy Speaker: Members. Order, Members.

Member, continue.

J. Rice: Thank you.

We haven’t seen their long-term royalty agreement, which was passed in the miscellaneous statutes bill, Bill 23, this past spring. Its contents are secret, so we don’t know what else it contains. The only thing this government insisted on is a ribbon cutting before the next election. The Premier has sold out B.C. families and B.C. workers for political purposes.

We can do better. I believe we can do better. We support resource development. We support the development of an LNG industry as part of a diversified, value-added, modern economy. We support access to training and post-secondary education so that people get the opportunity to participate in this economy to the best of their ability.

Other jurisdictions in the world, like Australia and Norway, insist on local benefits for their resource development. B.C. can and should do the same. New Democrats will stand up for the interests of British Columbians first, not foreign-owned corporations and not for short-term political benefit.

Let’s talk about First Nations development in this project. The province, Petronas and Prince Rupert gas transmission line are all independently negotiating agreements with First Nations along the proposed pipeline and proposed facility site on Lelu Island. While some First Nations have signed agreements, for most, the negotiations remain ongoing.

The associated pipeline and the facility will cross the territories of many B.C. First Nations. While this government claims they are committed to partnering with First Nations on LNG opportunities, they have not reached consensus with a number of impacted First Nations regarding benefit agreements.

Furthermore, the project development agreement between Petronas and the government does not envision First Nations as true partners. Instead, it stipulates certain obligations the province has to Petronas in regards to First Nations engagement. It’s placed in the appendix of their project agreement. It’s listed under “Other Matters.” Is this how the Premier and this government see First Nations people in British Columbia, as other matters? This level of respect reminds me of the Premier’s idea to celebrate yoga on National Aboriginal Day.

I will support LNG projects that respect and make partners of First Nations and recognize their right to a share in any of the benefits that may flow from LNG. This government maintains the position that they are committed to partnering with First Nations, yet they have not said publicly whether the project will move forward without First Nations approval.


Deputy Speaker: Order, Members.

Please continue.

J. Rice: The silence is pretty telling. One would assume that in today’s day and age the government would seek approval of the First Nations whose traditional territory is most impacted by a project of this magnitude, particularly with the recent Tsilhqot’in decision. We know that First Nations people have the right to decide how their traditional territories will be used and managed, including its natural resources. Clearly, there is much more work to do to satisfy First Nations concerns. The issues expressed by Lax Kw’alaams have not yet been addressed.

We hear things around the economic and skills-training opportunities the LNG industry represents for First Nations, but where is the explicit commitment within the project development agreement? It’s one thing to say you are going to do something and another to enshrine that commitment into a contract or into legislation. Australia could do it. Why can’t B.C.?

The B.C. Liberal government claims to be engaged with 25 First Nations and to have signed 14 agreements related to the facility and pipeline. Despite these claims, only seven agreements are listed in the project development agreement, as well as on the government’s natural gas pipeline benefits agreements webpage. There is a list of a whole bunch of other LNG pipeline projects that have various First Nations agreements, but some of these projects are nowhere near or have nothing to do with the Petronas project.

The government’s comments on First Nations consultation rarely focuses specifically on this Petronas project. Instead, they conflate messaging with negotiations on other pipeline projects to give the appearance that significant progress is being made. For instance, when they announced the project development agreement with Petronas, their news release stated: “Nearly 90 percent of the 32 First Nations with proposed pipelines through their traditional territories have indicated their support through one or more pipeline benefit agreements.”

Even the PDA, the project development agreement, fails to specify which First Nations the province is engaged with and instead refers to pipeline projects more generally. “The province has entered into framework agreements with a number of First Nations related to proposed natural gas pipelines. Benefit-sharing negotiations are being conducted with approximately 31 First Nation and aboriginal groups impacted by proposed pipelines.”

What proposed pipelines? Which ones?

We believe that in negotiating any LNG project, the government must respect and make partners of First Nations and recognize their right to share in any of the benefits that may flow from LNG. The government needs to do more than say they will consult with First Nations. Lax Kw’alaams First Nation in my constituency has outright rejected this Petronas proposal, stating that environmental and cultural concerns override the financial benefits contained in this deal. They turned down over $1 billion.

Lax Kw’alaams have title claim to Lelu Island, the proposed site, and to Flora Bank, the salmon habitat adjacent to Lelu Island. Flora Bank provides a habitat for salmon to mature in the Skeena watershed. They are concerned that the facility poses significant environmental risks to the fish population.

They are, however, not opposed to LNG. They are not completely opposed to this project, either, but will not support the current proposal. I quote from a Lax Kw’alaams press release:

“Hopefully, the public will recognize that unanimous consensus in communities…against a project where those communities are offered in excess of $1 billion sends an unequivocal message that this is not a money issue. This is environmental and cultural. That unanimity was achieved in three separate community meetings.

“Lax Kw’alaams is open to business, to development and to LNG,” including this Petronas project. “It is not open to development proximate to Flora Bank.”

In June 2015 the Canadian Environmental Assessment Agency halted their review of the project as they required further information from Petronas regarding the potential effects of the facility. The Canadian Environmental Assessment Agency has halted this project three times with concerns to the fish and fish habitat of Flora Banks.

These concerns are truly valid concerns. The Skeena River and its estuary is the second-largest salmon-producing river in our province. It’s the largest undammed river in North America. Flora Banks is one of the most diverse and abundant life-producing eelgrass beds in our province, if not this continent.

Without Flora Banks, juvenile salmon would have no place to acclimate to the salt water ocean, to hide from predators and gain enough weight to make them strong enough to go out to sea and become the big, beautiful, not to mention delicious, icons we are known the world over for, our salmon.

Other proponents have already looked at and turned away from Lelu Island as a potential site based on concerns in their ability to construct an LNG terminal that wouldn’t have adverse effects to fish and fish habitat. No doubt, the site poses an enormous environmental and engineering challenge for Petronas.

First Nations, commercial fishers and residents up and down the coast and along the Skeena River place tremendous value on the life-sustaining qualities the estuary provides. There is no dollar amount that can compensate people for the fisheries value it provides. Lax Kw’alaams has clearly stated this, and pushing through this project without these concerns addressed is completely disrespectful and plain wrong, in my opinion.

The Natural Gas Minister and Deputy Premier has said in this Legislature: “If you’re looking to do it right, you go and look at similar economies. Australia has a similar economy. They just developed an LNG industry, and they used project development agreements to help develop that industry.”

But an examination of Australia’s LNG agreements shows B.C. didn’t follow their lead when it comes to guaranteeing jobs or environmental protection. Australia guarantees local jobs. B.C. doesn’t. Here’s a fact: agreements like the Australian Gorgon LNG project contain clauses that guarantee jobs for Australians, saying that the proponent must use labour available within Western Australia.

Australia’s North West Shelf LNG agreement, another LNG project, has the same provisions. Fact: the Premier’s Petronas deal doesn’t have a single reference to guaranteeing jobs for British Columbians. Petronas has already indicated that they could use up to 70 percent of workers from overseas if other projects are going on simultaneously.

Australia requires a buy local policy. B.C. doesn’t. Fact: the Australian Gorgon LNG agreement says the proponent must give preference to Western Australian suppliers, manufacturers and contractors when letting contracts or placing orders for works, materials, plant equipment and supplies.

Further, they must use the services of engineers, surveyors, architects and other professional consultants, experts and specialists, project managers, manufacturers, suppliers and contractors resident and available within Western Australia. Australia’s North West Shelf LNG agreement has similar provisions.

The Premier’s agreement with Petronas makes no requirement to buy local products and services from B.C. Petronas has already signalled that they will be bringing engineering services from overseas.

B.C. gives away revenue. Australia doesn’t. Fact: the Australian Gorgon LNG agreement doesn’t give tax breaks and protection from future tax increases to the proponent for any length of time. Fact: the Premier’s agreement with Petronas locks in the LNG income tax that was already cut in half, reduces the corporate income tax from 11 percent to 8 percent and gives protection from LNG carbon tax increases for 25 years.

Australian agreements contain environmental benefits; B.C. doesn’t. Fact: the Gorgon LNG deal includes a clause where the proponent must pay tens of millions of dollars for ongoing programs that will provide net conservation benefits. Fact: the Premier’s LNG deal contains zero clauses that benefit or protect the environment and protects the company from increased costs if B.C. moves to improve environmental regulations on the LNG industry for 25 years.

The Premier negotiated an LNG that benefits foreign-owned corporations first and puts British Columbians last. New Democrats, like most British Columbians, want to see an LNG industry that protects our land, air and water, including our climate change commitments. But the Premier’s LNG deal lets Petronas help write its own environmental regulations.

Fact: the project development agreement signed by the B.C. Liberal government with Petronas gives the company the right to negotiate with government on the environmental regulations that will come into force when the Greenhouse Gas Industrial Reporting and Control Act is enacted. These rules will apply to all future LNG facilities as well.

Fact: the rules the company helps write will be locked in for 25 years, meaning a future government that wants to improve environmental measures will have to pay the company back for any cost it incurs as a result. It’s hard to believe that in 25 years we would not be improving our commitments to fighting climate change and reducing greenhouse gases.

Fact: the agreement also protects the company from changes to the carbon tax on LNG production for 25 years. Fact: the government already legislated an exemption of 70 percent of GHG emissions from the benchmark LNG facilities are required to meet. Looking at the GHG impacts from the marine facility without looking at the impacts of the product we are putting into the pipes from upstream is pre-selective and doesn’t capture true impacts.

The Premier has sold out B.C. families and B.C. workers for political purposes. We support the development of LNG for B.C. We have always said it needs to meet the conditions of a fair return to British Columbians, who own the resource — jobs for every British Columbian ready to work or train; protection for our land, air and water; and true partnerships with First Nations.

The LNG project development agreement enabling act does not meet any of these conditions. That is why I stand here and object to this generational sellout of a deal. I want to see my community and the communities I represent thrive. I want to see British Columbians prosper without tremendous expense to the environment. I want to see First Nations respected and treated as true partners, not as an engagement box to check off in the appendix of an agreement.

The Premier promised us the moon with LNG, and she did so to win an election. Now we’re being told that this is good enough, but I don’t accept that. My opponents have criticized me for not standing up for the people in the north by opposing this agreement, but I assure you, hon. Speaker, I stand here today doing quite the contrary. It’s a bad deal for my community and a bad deal for B.C., so I oppose this.