Kitimat will only receive 1.6 per cent of the $100 million Northern Capital and Planning Grant for regional districts and municipalities in the north announced by premier John Horgan in February.
This is despite the demands likely to be placed on Kitimat’s infrastructure ahead of and during the construction of LNG Canada’s facility and the Coastal GasLink pipeline, as well as the Kitimat LNG facility and the Pacific Traverse Energy propane processing plant should those projects announce positive final investment decisions.
Kitimat will receive $1,556,000 of the $100 million that was allocated to four regional districts (Fraser-Fort George, Bulkley-Nechako, Kitimat-Stikine and North Coast) and their 22 participating municipalities to provide funding for infrastructure and long-term planning.
Among those municipalities receiving the largest amounts are Terrace ($8,197,000), Prince Rupert ($8,121,000), Prince George ($8,135,000), Smithers ($6,218,000) and Vanderhoof ($5,731,000).
Kitimat receives the second lowest allocation, only slightly more than Stewart ($1,294,000).
Making the announcement in Terrace on February 16, Horgan said the grant is part of the province’s “commitment to northwest mayors to make sure local workers and communities can reap the full benefits of resource development in their region.”
The 22 municipalities would get $83.7 million, and the four districts the remaining $16.3 million.
Local governments with populations of more than 10,000 people were to receive between $6 million and $9 million, while municipalities with populations fewer than 10,000 would receive between $1 million and $6 million.
This would mean that Kitimat could receive anywhere between $1 million and $6 million.
Soon after the announcement, Terrace mayor Carol Leclerc referred to the nearly $8.2 million the town would be receiving.
“For us to get $8 million, here you go, take it and do whatever you need to do for infrastructure — it’s like, ‘Holy smokes’,” said Leclerc to Black Press in an interview on February 16.
Similarly, soon after the February announcement, Houston was understood to be receiving over $4 million – when the detailed breakdown was issued by the ministry on March 27, Houston was listed as receiving $4,486,000.
Contacted for comment immediately after the announcement, Kitimat mayor Phil Germuth said the amount allocated to Kitimat hadn’t been confirmed and that he was waiting for details from the ministry.
Germuth expressed surprise at the time that Terrace and Houston knew the dollar amounts they would be receiving.
When pressed for comment Municipal Affairs and Housing ministry spokesperson Melanie Kilpatrick replied to the Northern Sentinel saying the allocations weren’t yet available.
“The precise dollar allocations will be finalized in the weeks ahead and will be available before the end of March,” said Kilpatrick via email on February 19.
Despite not being able to confirm an amount, Germuth was upbeat after the announcement, saying the $100 million allocated to northern communities was “a good start.”
He said the LNG Canada project would inevitably put a strain on existing infrastructure in Kitimat, the Haisla Bridge in particular.
“We have to look at possible transport upgrades – widening roads and intersections, upgrading our water system, replacing our fire hall and making sure our wastewater system will be able to cope. While the Kitimat Modernization Project put a strain on our infrastructure, LNG Canada is an even bigger project,” said Gemuth.
“We have to make sure our communities are ready for industry.”
After it was disclosed that Kitimat would only be received 1.6 per cent of the $100 million, Germuth referred questions to DoK economic development director Mike Dewar.
He said despite having a larger tax base, Kitimat faces infrastructure challenges that need to be addressed to accommodate expansion related to LNG Canada.
“The District of Kitimat appreciates and commends the provincial government for allocating infrastructure funding to support Northern communities that are facing increased pressures associated with LNG development,” said Dewar.
“At the same time, the District believes that some of the funding allocation amounts may not reflect community demands and needs, as in the case of the amount allocated to Kitimat.”
He added that after the allocations were finalized, the DoK spoke to Horgan and met with the provincial ministers of finance, and municipal affairs and housing, along with key staff to discuss LNG-related pressures that the community is facing.
“The messaging that was delivered to these provincial representatives was well received and will be taken into consideration for future funding opportunities,” said Dewar, adding that discussions are ongoing between the DoK and provincial government to address infrastructure challenges in Kitimat.
”The DoK is involved in ongoing discussions with other levels of government in an attempt to secure funding for the necessary Haisla Bridge replacement. We are encouraged that other levels of government have expressed interest in financially supporting this project – however, funding agreements have not been reached at this time.”
Follow-up questions sent to Kilpatrick were instead answered by the ministry’s communications and public engagement assistant manager, Pamela D’souza.
Asked about the formula used to determine the allocations, D’souza said the once-off grant was distributed to local governments based on a combination of a flat amount and an adjusted per capita amount.
“A larger share of the grant money – 60 per cent – will go to smaller local governments that lack economies-of-scale, and a strong commercial or industrial taxation base.
“Funds will also be allocated on an adjusted per capita basis, with smaller communities receiving more per capita funding than larger municipalities.”
She said a combination of factors determined the amount of funding received by communities:
Assessment Adjusted Amount – this is a base level of funding multiplied by an “assessment factor”. The assessment factor is equal to a municipality’s total residential assessment divided by its total municipal assessment (residential + non-residential).
This allocated more money to municipalities that lack a strong commercial or industrial tax base.
Adjusted Population Amount – this is a per capita amount applied to a municipality’s “adjusted population”. The adjusted population weighs the local population more heavily for smaller municipalities than larger ones. This focuses more funding on smaller and more vulnerable municipalities in the north.
“Additionally, there is a funding cap of approximately $8.1 million on larger municipalities over 10,000 people so that they don’t receive a disproportionate amount of funding,” said D’souza
When pressed on whether Kitimat would receive further funding, she said the provincial government “may consider additional funding in the future in the context of priorities at that time.”
“In the meantime, the provincial government continues to support local governments across B.C. with their infrastructure needs through significant federal-provincial cost-sharing grant programs, like the 10-year $6 billion Investing in Canada Infrastructure agreement.”
She confirmed that municipal affairs and housing minister Selina Robinson, and finance minister Carole James, had met with DoK representatives to discuss the grant, as well as other ways the province could help address ongoing issues in the community, including access to affordable housing.
“The province will continue to work with local government partners to address these priorities for the community.”