The British Columbia government, gearing up for an election on May 17, has offered a fresh basket of goodies to spur oil and gas activities in its northern region.
Following through on its budget announcement in mid-February, the province said it will spend C$408 million over the next 15 years to support infrastructure spending in remote areas.
The largest chunk will see C$20 million a year earmarked for municipalities to build roads and other support systems targeting at expanding oil and gas operations.
Because most industry activities occur outside municipal boundaries, the towns and cities are unable to collect industrial taxes from the companies, although their services are under growing pressure.
Energy and Mines Minister Richard Neufeld told the Vancouver Sun the money will “start to respond to the communities’ needs as far as local infrastructure goes.”
Fort St. John Mayor Steve Thorlakson welcomed the announcement, which extends by 12 years a program introduced in the mid-1990s in recognition of the financial stresses on municipalities.
He said the program is almost more “dynamic,” because it increases the funds available, provides revenues in place of industrial taxes and indexes them to the rural industrial tax assessment base.
In addition, the province has made C$30 million available for new resource roads on a matching-dollar basis.
A spokesman for EnCana, the industry’s pace-setter in British Columbia, said the strategy will accelerate the growth of year-round activities from a winter-only drilling season, when roads and drill sites are sufficiently frozen to carry the weight of heavy equipment.
Another C$32.5 million is earmarked for paving and improving about 80 miles of roads.
Third phase of government effort
It is the third phase of the government’s effort to bolster oil and gas activities in a province that has posted the strongest gains in the past four years, with investment racing to C$4.5 billion from C$2.6 billion.
Earlier incentives have included low rates for less productive wells, royalty credits for deep-gas exploration, horizontal and directional wells and summer drilling and royalty credits of up to C$10 million a year to build and upgrade roads.
Carole James, leader of B.C.’s New Democratic Party, dismissed the program as “crass” electioneering by trying to persuade voters that the government cared about issues it had ignored for four years.
—Gary Park
