Big projects and local jobs and “nation building”

This is not a well funded health care system.

We are heading into a period of austerity in Canada. The federal government is working on a budget that will provide a 15% cut to government services and spending and a tax cut primarily for the middle and upper classes along with legislation to fast track large resource development projects. The idea, I suppose, is that these large projects will stimulate the economy and protect us from the shocks of the destruction to the global trade system generated by the US’s arbitrary trade policies.

Some governments are quite excited about the construction of fossil fuel projects in Canada. We have a local one here in Squamish. A liquid natural gas facility and port called Woodfibre LNG. Woodfibre LNG is 70% owned 70% by LGE, which is a private company owned by Indonesian billionaire Sukanto Tanoto. His companies such as Asian Agri, Unibank and various logging firms have been convicted of tax evasion, fraud and environmental degradation, leaving local communities and people on the hook. Tanoto is a billionaire.

As with all large resource projects, this one was promised to bring jobs to the local community, a city that is struggling with housing affordability, a stretch on its public infrastructure and a generational transition from resource-based industries to tourism and recreation. Squamish needs services – health and education services for a growing population, housing, social services, public transportation infrastructure to serve its connections to greater Vancouver and Whistler. Back in the old days, with union jobs and local townsites created around the mines and mills of Howe Sound, you could count on these kinds of projects to bring in settlers who establish businesses, schools and local services. That is where resource towns gained their reputation for driving prosperity. They also destroyed First Nations cultures and degraded the local land and waters for 100 years too.

That picture has changed. These towns don’t drive local prosperity, they enrich non-local investors. As predicted, the WLNG project has brought in hundreds of workers from elsewhere in Canada and around the world to build the plant and the port. Hundreds are staying in two converted passenger ships known as “flotels” which house work camps for the project. Most workers are engaged in a two weeks on/one week off rotation. While they are living on the flotel they are not allowed to visit Squamish, and therefore do not support local businesses. Because they aren’t living in Squamish they aren’t paying local taxes either. There are about 51 local people out of more than 650 currently employed on the project. Some businesses are providing contract services.

Woodfibre LNG’s own report on socio-economic impacts begin rather ominously with the words “ Woodfibre LNG is committed to managing socioeconomic effects associated with the construction and operation of its liquid natural gas facility located in Squamish BC” which aren’t exactly the words of a company focused on becoming part of the local community. When it was announced WLNG promised 650 jobs during construction and 100 jobs over the 25 year operational life of the facility. As taxpayers we gifted them a reduced rate on their electrical bill, to the tune of about $23 million a year. They have yet to begin paying local property taxes to Squamish, and are currently negotiating a tax agreement with the local government. That has gone to court becasue Woodfibre thinks it’s too much. So now in addition to challenging the rate, WLNG is now costing local taxpayers money to fund a legal defence.

These companies do not want to pay taxes, but they are happy to get subsidies on energy costs, and a reduction of royalties until capital costs are paid off. Those costs by the way have doubled recently, much to the chagrin of LGE’s minority partner, Enbridge. These companies demand and receive the help and relief from financial pressures that citizens do not. We are bending over backwards in Canada to develop these kinds of projects, and we are cutting much needed health and education and social services to provide incentives for wealthy investors to do it.

These projects do not “build nations”. They are the fruits of a nation we have already built. They provide very few local jobs and when it comes to making a meaningful impact, by providing long term tax funding for services to give back for the resources we have freely provided to them, they do everything in their power to avoid, dodge and not pay.

This is not how to build a nation. We are in a place where we need to literally invest in the human and physical capital to sustain health care systems, public infrastructure, education, social services not to mention the public-good parts of industries like agriculture, energy generation, community development and manufacturing so that we are safe, fed and cared for. Without that there will not be a nation to invest in.

The market will not do this. Despite private mega projects like LNG plants convincing local governments that they are good for the economy, they do everything in their power to avoid paying taxes and royalties which is the ONLY way to get more doctors and nurses, more teachers and scientists, more public transportation and safer food and water. Government’s job is to pay for those things.

We need energy. Maybe we even need LNG and certainly people need jobs. That doesn’t mean that energy companies are the most important sector in our country, nor is their success the only way to fund a functioning society. Individuals benefitting from development is not the same as a community or a province or a nation benefitting from it. We have been sold a pile of garbage for 45 years about how the market will solve all our problems, how creating investment opportunities for very wealthy people will return resources to the rest of us, and despite ample evidence to the contrary, people STILL believe it.

Canada is entering into a dangerous time. Not because the economy and the climate is tanking. But because our current governments are disinvesting in our social infrastructure just at a time when we need to increase it. This will load individuals up with debt, forcing them to borrow for things that government should be borrowing for, at better rates. It will increase the costs for families and small businesses and property owners as municipalities struggle to absorb the costs that provinces pass on to them.

I’m not optimistic. Emails to my MP Patrick Weiler have gone unanswered. The current federal government budget consultation is clearly just window dressing because we have been discussing this budget for weeks now. It’s already made and Departments are already looking for cost reductions. No one is going to pay attention to folks who say “hey, we need to substantially increase tax revenue and do a wholesale reinvestment in our citizens.” It might be decades before we can have that conversation again, and by then the game might be fully rigged in favour of it never happening.