Northern Rockies Regional Municipality

MLA's Letter re: Climate Action

At the request of Mayor Streeper, the following submission to the Climate Action Team from MLA Pat Pimm is being shared for the information of Northern Rockies residents:

Re: Your Recommended Plan for British Columbia’s Carbon Tax

I wish to comment on the Climate Leadership team’s recommendations to Government for the report entitled Climate Leadership Plan as issued to the public several weeks ago. My understanding is that the Committee has now completed the draft copy and is asking for public input until March 25, 2016.

My name is Pat Pimm and I am the MLA for Peace River North where I have represented the people for the past 7 years. All of British Columbia’s massive natural gas reserves are located within my riding or my colleagues riding of Peace River South. Naturally, we are very interested in any government proposals which will impact British Columbia hydrocarbons.

I have earned my living -- and a very strong majority of my constituents earn their living -- as a direct result of the Natural Gas Industry. For this reason, that I become very upset when a committee consisting mostly of academics and environmentalists make recommendations to government that are going to substantially affect the Industry that feeds most of my constituents families not to mention my own, with sparse input from my constituents.

We are talking about Green House Gases (GHG) I would like to begin by pointing out that our entire vast country of Canada emits only about 2 percent of the worlds CO2, and British Columbia emits only approximately 10 percent of that; in other words only two-tenths of of one percent (0.2%) of all of the world’s GHG emissions, Therefore let’s not fool ourselves that whatever we do, whether ambitious or not, will be significant or material in the larger global picture. 

However, we must concede and assist the global push to limit GHG.  In that regard, therefore, I believe British Columbia should be rewarded when we can displace a more CO2 intensive fuel, such as coal burned in some dirty generating plant in China or Alberta, with our clean hydroelectricity or with our Natural gastransported abroad in liquid form through the LNG process. 

I would like to make the following additional points:

 

1. In my strong view, your committee makeup is not balanced or impartial.  Itismade up of approximately 9 green-thinking individuals, 3 environmentalists, 4 Libertarians and 2 Conservative-thinking Individuals, and I don't think British Columbians could possibly expect to receive a balanced position on this vital topic from a panel constituted on that basis.

2. British Columbia should take a very serious look at the targets that we currently have in place, which have lead the world in their scope and originality.  I believe without tampering further with the GHG emission targets now in place, we should rather seriously consider reducing them, since there is virtually no way that we can maintain competitiveness for all Industries, while lowering our emissions to the legislated targets which exist at present. I understand that the committee is making recommendations based on current targets, but I do not think we have analyzed what happens to certain Industries if we actually reach these current targets. I believe that Mining, Oil and Gas Industry, Concrete industry and many more will be virtually wiped out if BC raises its carbon tax while others globally are neither imposing carbon taxes nor raising them at the same rate. This is simply an elementary competitive fact of life!

3. Your report does concede that British Columbia industries exposed to foreign competition might be at a serious disadvantage unless they got some special consideration from government.  OK – let’s look at Teck, which today is spending $52 million a year (as of last Tuesday) on carbon taxes, and is struggling to stay in business in today’s commodity market.  Fast forward to the day when as you proposed, taxes are ten times higher, Teck would be expected to hand over $1/2 billion a year!  So under your apparent plan that is the size of the taxpayer subsidy we would have to contemplate.  Or Teck would have to pay it.  Or Teck might simply moves its shovels and trucks somewhere else in the world.

4. It may be noted that Alberta has one coal-fired thermal generating plant which all by itself, produces more CO2 than the entire natural gas industry located in British Columbia.  Therefore, if we want to reduce Canadian GHG emissions our first priority should be to help Alberta switch that generating plant to burn natural gas.  And ship our LNG to China for the same reason.

5. There is another good reason not to kill our LNG industry: Japan’s serious effort to switch its electricity supply away from nuclear and to LNG fired generating facilities supplied from British Columbia.  Japan’s nuclear power plants, combined with its vulnerable seismic and tsunami environment, presents a radiation hazard to British Columbia which is another good reason to support natural gas and LNG far more serious than climate change in my opinion.

6. I look at carbon reduction similarly to a diet, it is always very easy to lose the first bit of weight and that doesn't cause much grief, but it gets tougher and tougher as the diet goes along. That is exactly what is happening with Canada and British Columbia as we speak.   Wesaw immediate reductions early in the process and we are now starting to see emissions climb back up as the economy grows, and further reduction becomes harder and harder to achieve.  Again, we are talking about the challenge of simply meeting the existing targets, which the committee seems to accept as almost a fait accompli as it proposes even tougher targets in the future.

7. I absolutely believe that British Columbia should be a leader in climate change in Canada -- and we are already there! I don't think we should go any further ahead, than we already are.  Now I would conceded that if Canada assesses a similar carbon tax on all the Provinces, then we could look at maintaining our present $30.00 per tonne differential over them, but absolutely nothing more.

8. I am completely opposed to British Columbia imposing more than a $30.00per tonne differential above whatever tax Canada puts on all of its Provinces-- which are where we are today!

9. British Columbia has maintained a strong Economy in spite of the carbon tax, not because we have the carbon tax.  People seem to get cause and effect mixed up when they consider our recent economic performance.

10. Here is another important feature of our carbon tax.  British Columbia has a revenue - neutral carbon tax which means the Province does not collect any more revenue because of carbon tax, than it gives back in other tax cuts. In other words, whatever is collected in Carbon tax is given back to people and businesses in the same amount through taxation cuts, and that must be maintained.  Your report seems a bit wobbly on this principle.

11. The current discussion paper suggests that starting in 2018 we need to start increasing the carbon tax by $10.00 per tonne, per year until 2050 which means we will be at $350.00 per tonne in 2050. I do not support this for one second.

12. Let’s consider the impact of the present carbon tax on a homeowner and project that impact into the future.  Let’s look at myself.  I live in a cold climate presently pay $350 per year carbon tax on my heating bill in rural British Columbia at the current $30.00 per tonne. If the rate goes to $350.00 per tonne, as the report recommends, that would mean that my carbon tax would be $4200 per year if the price of natural gas and delivery costs remain at the same price as they are today. My actual home heating and delivery bill is $2,600 per year which means my carbon tax is about 15% of that total number today.  Remember that is only the tax on my heating bill, not the heating bill. At present carbon tax on my heating bill is $1.49 per GJ, but under the current suggestion we would be increasing the tax by 12 times which would then make the tax on the same amount of gas I use today at the amount of $4,778.04, or almost twice as much tax as my actual heating cost.

13. Lets consider gasoline for your car or truck.  The price of carbon tax is .07 cents on every litre of gasoline for my vehicle at the current price. If we use the rates suggested in this draft, the cost of carbon tax will be .84 cents per litre by 2050 which is completely unrealistic for people in rural British Columbia, that have no option for transit services such as people that live and work in urban centers.

14. At present Government does not put a charge on Industry for fugitive emissions (that is, CO2 and other gases that escape in natural gas drilling and extraction operations) but if they do put a charge on these emissions the simple fact is that it will completely shut down the Natural Gas Industry in the Northern Rockies Region of this Province. 

15. The reason that I say this is because in the last Provincial election the NDP had in their platform that they were going to increase the tax on fugitive emissions to the same price as the current tax of $30.00 per tonne this government imposes on carbon generally, and that the NDP tax would generate approximately 100 million dollars’ worth of revenue. The most important part to note is that 85 percent of that money would be generated from Ft Nelson because they have a CO2 content of 12 percent in their natural gas. This would mean that the Horn River, Liard Basin and Cordova embayment will never be produced. I will never agree to taxing an Industry so badly that it will shut that Industry down.

16. Now, I do believe we can make progress in many areas, if we seriously want to reduce CO2 emissions.   For example, I personally believe there are areas that we should continue to pursue to lower emissions such as the use of Natural gas and propane in vehicles, trucks, trains, ferries and all other types of combustible engines, as this not only reduces emissions but it is also more economical for the purchasers.

17. Now consider your somewhat wobbly attempt at a compensating tax cut in line with the current principle underlying the B.C. carbon tax.  You propose to cut the PST by the same amount as the revenue you raise from the carbon tax in the future, but there is absolutely no possible linkage that can be made between PST and carbon emissions and therefore we should not be trying to create a linkage that doesn't exist.

18. I personally don't agree with the recommendation that says you are going to get all remote communities off of diesel generation such as Toad River, who just received this technology within the last 5 years. It is completely uneconomical to get any other kind of power into that region and so your recommendation would set these small communities back to the days of running personal generators to power their homes, and the wood-burning stove.

19. Now we have some really ambitious laws concerning the proportion of different types of electricity on our BC Hydro grid, called the Clean Energy Act.  I do not agree with increasing the target of 93 percent clean energy on the integrated grid, as we should leave an option for clean natural gas to supply certain areas of the province with power, where there are no clean energy projects in the area.

 

So to sum up, let’s say I am not  keen on your report or its recommendations.

 

Thanks for allowing me to submit to your process.

MLA, Peace River North - Pat Pimm

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