British Columbia

Fair Share oil and gas re-negotiation plunging B.C.'s northeast 'into despair', say mayors

Two mayors in northeastern B.C. say their cities are being exploited, as the province tries to get its way on how money from the oil and gas industry is divided up.

B.C.'s northeastern communities square off against province over oil and gas money funding

Taylor Mayor Rob Fraser, left, and Fort St. John Mayor Lori Ackerman worry re-negotiating the Fair Share agreement will leave their communities in the lurch. (District of Taylor/City of Fort St. John)

The leaders of two communities in northeastern B.C. are warning they will be "plunged into despair" if the province gets its way on how money from the oil and gas industry is divided up.

Fort St. John Mayor Lori Ackerman and Taylor Mayor Rob Fraser are vocally opposing the province's push to re-negotiate the Fair Share Agreement by the end of Thursday.

The agreement was set up in the 1990s as a way to more equally distribute the money made by the oil and gas industry in the Peace region. By re-opening the deal, Ackerman and Fraser say the province is breaking its commitment to the region.

Oil and gas paying for city services

Most cities in British Columbia rely on property taxes to operate, injecting the money into roads, parks, police, and other services.

A significant portion of that property tax comes from the industrial sector, including mills, mines and oil and gas.

However, oil and gas operations in B.C.'s northeast tend to be located outside of city boundaries, even as the people employed by them use city services.

Fair Share addresses that by allowing communities to receive money from the industry.

Under the deal, the communities of Fort St. John, Dawson Creek, Chetwynd, Tumbler Ridge, Taylor, Hudson's Hope, Pouce Coupe and the Peace River Regional District give up their ability to tax the oil and gas industry.

In exchange, the province gives them a cut of the money they collect from the industry in the region, even when it's outside of city boundaries.

Third of city budget from Fair Share

Dawson Creek Mayor Dale Bumstead says at times, up to a third of his budget has come from Fair Share. (
Dawson Creek Mayor Dale Bumstead says his city counts on the millions of dollars it receives from Fair Share every year.

"It's a significant issue for us in terms of moving forward in the long-term planning of infrastructure and the needs of our community," he says. At times, up to a third of the city's budget has come from Fair Share.

The deal has been so successful that other regions have attempted to reach a similar agreement.

In the northwest, leaders are trying to reach a revenue sharing deal for the burgeoning LNG industry, and in Prince George, city council has discussed the possibility of a similar agreement for forestry and mines in the central Interior.

Province says deal is unsustainable

Minister of community, sport and cultural development Coralee Oakes says Fair Share does not reflect the amount of money government is receiving. (Jonathan Hayward/The Canadian Press)
The current Fair Share agreement was negotiated in 2005, and was supposed to last until 2020.

But in February, the Minister of Community, Sport and Cultural Development Coralee Oakes said the province wanted to negotiate a new deal, imposing a deadline of April 30.

"The current Fair Share agreement is simply unsustainable and not reflective of the amount of money government is actually receiving from the rural property tax," said Oakes in a release.

"Since the Fair Share MOU extension was signed in 2005, oil and gas revenues collected in the Northeast have fallen by over 80 percent."

Fort St. John could lose $32 million

Ackerman disputes the province's claim.

"This is our industrial tax base. Show me a community in any province in this nation that would give up their access to their industrial tax base."

She estimates Fort St. John stands to lose over $32 million over the next five years under the province's proposal.

"It would be putting us into a community of despair yet again."

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