Five conditions secure coastal protection and economic benefits for all British Columbians

Press Release

January 11, 2017

VANCOUVER – Following the Trudeau government’s approval of Kinder Morgan’s Trans Mountain Pipeline Project, the Province’s clear, consistent and principled position on its five conditions has resulted in tangible and significant investments that will protect British Columbia’s environmental and economic interests.

“The five conditions is an articulation of the way we do business in British Columbia,” Premier Christy Clark said. “We set the bar high to stand up for B.C. to protect our coast and environment, ensure opportunities for First Nations participation and secure a fair share of economic benefits for all British Columbians.”

Protecting B.C.’s Coast

The Trudeau government has taken action on B.C.’s second condition related to world-leading marine spill prevention, response and recovery with a $1.5-billion Oceans Protection Plan. A commitment to a world-leading system is an ongoing commitment for continuous improvement with additional investments as required in the future. B.C. will work closely with Canada to confirm we have a world-leading system in place on our coast prior to Trans Mountain commencing operations, as early as December 2019.

B.C. has identified 10 areas where action is required on our coast to achieve a world-leading system. The Federal Government’s commitment to taking action on all 10 areas through the Ocean Protection Plan means the largest share of the $1.5 billion investment would be made on the British Columbia coast. That includes First Nations and community training, new technology, staff and equipment including two new salvage tugs capable of rescuing and towing large vessels.

Additionally, Trans Mountain has committed to significant enhancements consistent with B.C.’s condition 2. These include a commitment that tankers will be escorted by a tug for the entire transit up to Race Rocks, and a $150 million investment that will result in a doubling of spill response capacity and halving response times along the Salish Sea.

The Oceans Protection Plan insures B.C. against any cost associated with a potential spill by providing a guarantee of unlimited funds available for clean-up and compensation, allowing dollars to get quickly into the hands of first responders and those affected by oil spills. This backstops B.C.’s polluter-pay principle, which ensures those who are responsible for spills are also responsible for cleaning them up.

B.C.’s Fair Share

British Columbia’s fifth condition related to a fair share of fiscal and economic benefits has resulted in an agreement that:

• has British Columbians first in line for jobs of the more than 75 ,000 person-years of employment;
• will boost B.C.’s GDP by $19.1 billion during construction and operations over 20 years; and
• generates over $2.2 billion in tax revenue for provincial and local governments.

In addition, B.C. has achieved an unprecedented agreement with Kinder Morgan to receive a significant investment worth up to $1 billion. The company will pay the Province between $25 million and $50 million annually for 20 years. This is the first time in B.C. that a company will share revenue from a large industrial project directly with the Province.

All of these revenues will be dedicated to a new BC Clean Communities Program. Under this new program, community groups across B.C. will be able to apply annually for grants to invest in protecting and enhancing B.C.’s environment (more details in Backgrounder 3).

Conditions 1, 3 & 4

The remaining conditions have either been, or are being satisfied. The first condition requiring environmental approval has been met at both the federal and provincial levels. B.C.’s EA certificate added another 37 conditions to further protect wetlands, wildlife habitat and caribou and grizzly populations.

The third condition requiring world-leading, land-based spill response is addressed through provincial legislation passed last year, which will establish a world-leading spill preparedness and response regime. Regulations will be enacted in 2017.

The fourth condition requiring opportunities for First Nations as well as addressing legal and treaty rights is being addressed by both the federal government and the company.

Approving interprovincial pipelines is a federal responsibility. In May 2016, the National Energy Board recommended approval of the Trans Mountain project with 157 conditions. In November 2016, the Trudeau government gave federal approval for the project.

Three backgrounders follow.

Learn more:

To learn more about the Environmental Assessment Certificate for the B.C. portion of the Trans Mountain Pipeline Project, visit: https://news.gov.bc.ca/releases/2017ENV0001-000047 

To read Environment Minister Mary Polak and Natural Gas Development Minister Rich Coleman’s statement, visit: https://news.gov.bc.ca/releases/2017ENV0002-000048

BACKGROUNDER 1

What British Columbia’s 5 Conditions have secured

Condition 1: Successful completion of the environmental review process.

• On May 19, 2016, the National Energy Board (NEB) recommended to the federal government that the project be approved, subject to 157 conditions.
• On Nov. 29, 2016, the Trudeau government announced its approval of the Trans Mountain Expansion Project.
• The provincial environmental assessment process began nine months ago.  Aboriginal consultation efforts have been conducted jointly with the federal government.
• After careful review, the Province has issued an EA certificate for Kinder Morgan’s Trans Mountain Expansion Project with 37 specific conditions attached.
• These conditions are based on the NEB’s report, the consideration of additional information and Aboriginal consultation to date.
• The conditions attached to this decision are legally binding and must be completed to ensure Aboriginal interests are accommodated and the Province is satisfied.

Condition 2: World-leading marine oil spill response, prevention and recovery systems for B.C.’s coastline and ocean to manage and mitigate the risks and costs of heavy oil pipelines and shipments.

• The federal government’s $1.5-billion Oceans Protection Plan is a world-leading marine safety system with new preventive and response measures. The lion’s share of the federal government’s Oceans Protection Plan will be directed to B.C. ensuring a truly world leading marine response regime.
• Trans Mountain has committed to significant enhancements consistent with B.C.’s condition 2. These include a commitment that tankers will be escorted by a tug for the entire transit up to Race Rocks, and $150 million investment that will result in a doubling of spill response capacity and halving response times along the Salish Sea.

Condition 3: World-leading practices for land oil spill prevention, response and recovery systems to manage and mitigate the risks and costs of heavy oil pipelines.

• In May, 2016, amendments to the Environmental Management Act (EMA) were passed which provide the legal foundation to establish a new, world-leading spill preparedness and response regime to address environmental emergencies in B.C.
• The new legislated requirements for a provincial spills regime were the result of over three years of engagement with industry, First Nations, local government and other key stakeholders.
• The legislation includes the following:
  • Establishes new requirements for spill preparedness, response and recovery.
  • Creates new offences and penalties.
  • Enables the certification of a Preparedness and Response Organization.
  • Increases transparency, participation and accountability.
• The provincial regime is intended to address all types of spills that cause pollution or threaten public safety regardless of their source.
• Trans Mountain’s commitments to safety include:
  • Enhanced Emergency Management Program with increased requirements, such as a greater focus on geographic response planning and response equipment, and funding inland geographic response planning development in B.C.
  • Minimum of 12 exercises along the pipeline; more than what is currently required.
  • Continual assessment and improvement including annually updated Emergency Management Plans, regular review of geographic response plans, a robust training and exercise program and an emergency management after incident/exercise reporting process.

Condition 4: Legal requirements regarding Aboriginal and treaty rights are addressed, and First Nations are provided with the opportunities, information and resources necessary to participate in and benefit from a heavy-oil project.

• Kinder Morgan has had over 30,000 points of contact with First Nations throughout their engagement process.
• Prime Minister Trudeau has confirmed the substantial progress that’s been made on consultation and accommodation, including a First Nations monitoring and advisory committee with a $64 million funding envelope.
• Kinder Morgan has signed 41 Mutual Benefit Agreements with First Nations in B.C. worth more than $350 million, and the company has also provided $13 million in capacity funding to assist First Nations in carrying out their due diligence.
• There will be continued engagement with First Nations in the case of this pipeline as with many other projects.

Condition 5: British Columbia receives a fair share of the fiscal and economic benefits of a proposed heavy oil project that reflects the level, degree and nature of the risk borne by the Province, the environment and taxpayers.

• The economic benefits B.C. is receiving as a result of government’s consistent and principled position includes (updated economic numbers from the 2012 submission to the National Energy board):
  • 75,110 person-years of employment for B.C. throughout construction and operation.
  • $3.8 billion in GDP to B.C. in construction and $15.3 billion (over 20 years) during operation for a total of $19.1 billion.
  • Approximately $2.2 billion in provincial tax revenue, including construction and operation benefits.
  • Estimated $512 million in property taxes to municipalities in B.C. over 20 years of operation.
• In addition B.C. will receive significant fiscal benefits direct from Kinder Morgan worth up to $1 billion.

BACKGROUNDER 2

Elements of world-leading marine protection and response

• New, modern radar and navigation systems, as well as improved weather services to allow for proactively managing vessel routing.
• Improved emergency training and capacity building for First Nations and others so they can more effectively act as B.C.’s first responders on the coast.
• Upgrades to Canadian Coast Guard (CCG) facilities along the coast (Prince Rupert to Bella Bella to Powell River), including improvements to equipment, personnel and infrastructure.
• Two multi-purpose tow-capable vessels to augment CCG’s towing capability in B.C.
• New, dedicated Emergency Response teams created under the Canadian Coast Guard.
• Response equipment staged in urban centres, so the coast guard can ensure quick deployment.
• Establishment of a 24-7 emergency operations centre in Port Hardy.
• Improvement to the Polluter Pays regime, where funds will be more immediately available to deal with response and clean-up.

Trans Mountain’s commitments will further contribute to enhancing marine protection:

• Requiring all tankers calling at the Westridge Marine Terminal meet strict, internationally accepted construction and operation standards;
• Only double hulled tankers will be allowed and they must go through rigid pre-screening and physical inspection;
• Two expert local pilots will be on board loaded tankers from Westridge Marine Terminal to Victoria.
• Tug escort regime will be extended to cover the tanker route up to Buoy Juliet (“J Buoy”), located at the entrance to Juan de Fuca Strait.
• Prescribing minimum tug requirement for outbound vessels for the Strait of Georgia, including Juan de Fuca Strait.
• More than $150 million invested in Western Canada Marine Response Corporation, an industry-funded, Transport Canada-certified response organization, to create new response bases, fund new equipment and create 100 new jobs. Investment will double existing spill response capabilities and cut realized response times in half.
• Enforcing a Tanker Acceptance Standard that provides a dedicated loading master with the authority to stop or abort cargo transfer operations should a marine risk or noncompliance occur.

BACKGROUNDER 3

Benefits agreement between Kinder Morgan and the Province of British Columbia

In an unprecedented agreement between the Province of British Columbia and a private company, B.C. will receive significant fiscal benefits direct from Kinder Morgan worth up to $1 billion. The company will pay the Province between $25 million and $50 million annually for 20 years. The actual amount paid to the Province each year will depend whether the expanded pipeline is operating at full capacity on its spot market contracts.

Revenues from the Trans Mountain expansion will be dedicated to the new BC Clean Communities program, a source of funding for projects that protect the environment and benefit communities. The BC Clean Communities program will launch once revenues to the Province from Kinder Morgan commence.

When the BC Clean Communities program is fully in place, it will be based on the following principles:

• A grant application process will be established, similar to the current gaming grant application process.
• Revenues will be dispersed as grants for grassroots, community-led environmental protection or enhancement initiatives.
• Grants can be combined with other funding sources that require matching funds, however, BC Clean Communities grants will not require matching funds by applicants.
• B.C.’s polluter pay principle will remain paramount. Funds from BC Clean Communities will not be allowed to replace a polluter’s requirement to pay for clean-up and compensation.

Examples of potential projects eligible for funding under the BC Clean Communities program include, but are not limited to:

• Purchasing land for parks.
• Restoring historic sites
• Cleaning up orphaned sites or spills where the polluter is unknown.
• Restoring habitat
• Controlling invasive species
• Cleaning up beaches, rivers or public waterfront property
• Establishing and promoting recycling programs in small, rural communities.
• Marine conservation and monitoring

Media Contacts:

Stephen Smart
Press Secretary
Office of the Premier
778 389-6202

Media Relations
Ministry of Environment
250 953-3834
Connect with the Province of B.C. at: www.gov.bc.ca/connect

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