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A community impact study of coal development in northeast British Columbia Taylor, Ross Eric 1978

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A COMMUNITY IMPACT STUDY OF COAL DEVELOPMENT IN NORTHEAST BRITISH COLUMBIA by Ross Eric Taylor B.E.S., University of Waterloo, 1976 a thesis submitted in partial fulfillment of the requirements for the degree of Master of Arts in THE FACULTY OF GRADUATE STUDIES (School of Community and Regional Planning) We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA October, 1978 Ross Eric Taylor, 1978 In presenting th is thes is in pa r t i a l fu l f i lment of the requirements for an advanced degree at the Univers i ty of B r i t i s h Columbia, I agree that the L ibrary sha l l make it f r ee l y ava i lab le for reference and study. I fur ther agree that permission for extensive copying of th is thesis for scholar ly purposes may be granted by the Head of my Department or by his representat ives . It is understood that copying or pub l i ca t ion of th is thesis for f inanc ia l gain sha l l not be allowed without my wri t ten permission. Department of Community and Regional Planning The Univers i ty of B r i t i s h Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 Date October 5, 1978 11 ABSTRACT The northeast coal sector of the British Columbia economy may be the f i r s t comprehensively planned resource development in this pro-vince. If development proceeds, i t will mark the f i r s t time government has taken the lead in planning townsite and community development, trans-portation, manpower and other key elements. The implications of coal development for existing communities within the region could be immense. The purpose of this thesis is to determine the likely effects of coal development and to anticipate the level of change that can be expected to take place in the communities of the region. Because there is a wide range of development possi b i l i t i e s , the method chosen to estimate the effects utilizes scenarios ranging from minimal development to f u l l development. For each scenario projections of selected variables are compared to the baseline situation - a projec-tion of the same variables in the absence of coal development. Each scenario is described in terms of the geographic distribution of impacts and corresponding demand for services to be provided in each community. The capacity of the communities to accommodate the predicted magnitude of change is evaluated and the impact on the region as a whole is examined. Coal development has the potential to benefit the impacted com-munities, the region, and the provincial and federal governments as well as private sector interests. However, this is contingent upon a compe-tent planning process that can balance economic, social, environmental and political concerns. i i i TABLE OF CONTENTS Page 1.0 INTRODUCTION 1 1.1 Importance of Northeast Coal to British Columbia 1 1.2 Objectives of the Thesis 3 1.3 Organization of the Thesis 5 1.4 Notes to Section 1.0 7 2.0 BACKGROUND TO NORTHEAST COAL 8 2.1 The Northeast Coal Study 10 2.2 The Coal Guidelines Process 14 2.3 The Nature of Resource Planning 17 2.3.1 Planning in the Northeast 19 2.4 Notes to Section 2.0 22 3.0 PROPOSED COAL MINING PROJECTS 24 3.1 Sukunka/Bullmoose (B.P. Canada) 24 3.2 Babcock/Murray (Quintette Coal) - 28 3.3 Carbon Creek (Utah Mines) 30 3.4 Cinnabar (Cinnabar Peaks) 32 3.5 Teck (Brameda) 33 3.6 Other Developments 33 3.6.1 Westcoast Transmission Gas Scrubbing Plant 34 3.6.2 Forest Products 34 3.7 Summary of Development Possibilities 35 3.8 Notes to Section 3.0 36 4.0 DESCRIPTION OF THE REGION 37 4.1 The Northeast Region 37 4.2 Chetwynd 39 4.3 Hudson's Hope 44 4.4 Dawson Creek 46 4.5 Notes to Section 4.0 48 5.0 METHODOLOGY 50 5.1 Economic Impact Methodology 50 5.1.1 Economic Base Theory 52 5.1.2 Input - Output Analysis 56 5.1.3 Income - Expenditure Analysis 60 5.1.4 Evaluation of the Models 65 5.1.5 Parameters of the Income-Expenditure Approach 66 5.2 Population Multiplier Methodology 68 5.3 Community Impact Methodology 71 5.4 Notes to Section 5.0 77 i v Page 6.0 ECONOMIC IMPACT 79 6.1 Employment and Income 79 6.1.1 Direct Impact 79 6.1.2 Indirect Impact 84 6.1.3 Induced Impact 88 6.1.4 Geographic Distribution of Impacts 89 6.2 Development Profiles 91 6.2.1 Profile 1 91 6.2.2 Profile 2 95 6.2.3 Profile 3 98 6.2.4 Profile 4 100 6.2.5 Profile 5 103 6.3 Summary of Development Profiles 105 6.4 Notes to Section 6.0 108 7.0 COMMUNITY IMPACT 109 7.1 Chetwynd 109 7.1.1 Demographic Impact 110 7.1.2 Housing Requirements 119 7.1.3 Physical Services 122 7.1.4 Human Services 126 7.1.5 Commercial Impact 131 7.1.6 Summary 134 7.2 Hudson's Hope 135 7.3 Dawson Creek 139 7.4 The Region 140 7.5 Notes to Section 7.0 143 8.0 SUMMARY AND CONCLUSIONS 144 8.1 Regional Impacts 145 8.2 Community Impacts 146 8.3 Factors Influencing Development 148 8.4 Options for the Region 152 8.4.1 Delayed Development 152 8.4.2 Small Scale Development 154 8.4.3 Large Scale Development with No Government Investment 157 8.4.4 Large Scale Development with Government Investment 159 8.5 Concluding Comments 161 8.6 Notes to Section 8.0 163 BIBLIOGRAPHY 164 V LIST OF TABLES Page TABLE 3.1 - B.P. Development Schedule 27 TABLE 3.2 - Quintette Development Schedule 30 TABLE 3.3 - Utah Development Schedule 31 TABLE 3.4 - Cinnabar Development Schedule . . 32 TABLE 3.5 - Teck Development Schedule 33 TABLE 3.6 - Summary of Projects 35 TABLE 4.0 - Experienced Labour Force by Industry Peace River -Liard Regional District 40 TABLE 4.1 - Chetwynd Demographics 41 TABLE 4.2 - Existing Housing Stock Chetwynd 1977 42 TABLE 4.3 - Chetwynd Commercial Structure 43 TABLE 4.4 - Hudson's Hope Demographics 45 TABLE 4.5 - Dawson Creek Demographics 47 TABLE 4.6 - Dawson Creek Commercial Structure 48 TABLE 5.1 - Hypothetical Transactions Table 58 TABLE 5.2 - Hypothetical, Direct Requirements Table 59 TABLE 5.3 - Hypothetical Direct Plus Indirect Requirements Table 59 TABLE 6.0 - Definitions, Direct, Indirect and Induced Impact. . . 80 TABLE 6.1 - Impact Summary, Profile 1: B.P. Sukunka/Bullmoose Quintette Babcock/Murray. 94 TABLE 6.2 - Impact Summary, Profile 2 97 TABLE 6.3 - Impact Summary, Profile 3 99 TABLE 6.4 - Impact Summary, Profile 4 102 TABLE 6.5 - Impact Summary, Profile 5 104 TABLE 6.6 - Summary of Profiles 107 vi LIST OF TABLES CONT'D Page TABLE 7.1 - Current Housing Mix, Chetwynd 120 TABLE 7.2 - Current Housing Mix, Sparwood 120 TABLE 7.3 - Housing Requirements, Chetwynd 121 TABLE 7.4 - Residential Land Requirements, Chetwynd 122 TABLE 7.5 - Chetwynd Vicinity Educational Facilities Summary . . 127 TABLE 7.6 - Chetwynd Village: Thresholds for Service 132 TABLE 7.7 - Chetwynd: Commercial Floorspace Requirements . . . . 134 TABLE 7.8 - Housing Requirements, Hudson's Hope 137 TABLE 7.9 - Hudson's Hope: Commercial Floorspace Requirements. . 139 TABLE 8.1 - Summary of Development Implications 162 vi i LIST OF FIGURES Paoe FIGURE 4.0 - Population Trends Peace River - Liard Regional District 1961-1976 38 FIGURE 5.1 - The Impact Process 62 FIGURE 5.2 - Population Model . . . 70 FIGURE 5.3 - Interactive Model of Social Impact ..; 73 FIGURE 5.4 - Impact Assessment Steps 75 FIGURE 7.1 - Population Implications of Development Scenarios (1977 - 1982) for the Village of Chetwynd I l l FIGURE 7.2 - B.P. Projections of Chetwynd Population 114 FIGURE 7.3 - Population Growth and Decline: Chetwynd Assuming 1981 Phaseout of Chetwynd and Phase-In of the New Town 115 FIGURE 7.4 - Population Growth and Decline Chetwynd Assuming 1982 Phase-out of Chetwynd and Phase-In of the New Town 116 FIGURE 7.5 - Tumbler Ridge Townsite Population Projections 1979 - 1987 118 FIGURE 7.6 - Population Impact Hudson's Hope 136 FIGURE 7.7 - Population Trends and Projections, Peace River Region 141 FIGURE 7.8 - Population Trends and Projections, Peace River Communities 142 vi i i ACKNOWLEDGEMENTS I would like to express my sincere appreciation for the valuable contributions of Dr. Craig Davis and Gary Paget. Also I would like to thank my beautiful wife, Jeannet.te, and daughter, Varya, for their patience, understanding and encouragement. 1 1.0 INTRODUCTION The general subject area of this thesis is resource planning in British Columbia. As a specific example of resource planning, the exploitation of coal deposits in the northeastern part of the province is the object of attention. Being something of a unique case, the northeast coal sector is of particular interest for a number of reasons. It has been the object of an intensive federal-provincial planning ef-fort. The prime focus of this effort has been on the potential benefits to the provincial and federal economies of developing a major coal ex-porting industry in the Northeast Region. No other sector of the pro-vincial economy has received such intensive f e a s i b i l i t y evaluation as has northeast coal. In addition to the broader economic benefits of balance of payment improvements and tax revenues, coal development is also seen as a lever for economic development of the Northeast Region. This region presently lags behind the province as a whole in many key aspects like average income, economic diversification and other socio-economic indicators. 1.1 Importance of Northeast Coal to British Columbia The economy of British Columbia has traditionally been dependent on primary resources. Pulp and lumber account for 22.5% and 20.1% of the Province's exports respectively. 1 Of the ten leading export commo-dities only three, newsprint, cedar shingles and shakes, and plywood, are not primary goods. Even these commodities are only minimally pro-2 cessed. However, the primary sectors are not as dynamic in terms of growth potential as in the past. In the forestry sector value added and employment have been declining for a decade and the industry is undergoing a rationalization process to maintain prof i t a b i l i t y . To some extent the declining value of the Canadian dollar should lead to an increase in exports however, as the cost of Canadian forest products drops on the world market. Herring appears to be the only fishery that has not declined in terms of tonnage caught. Although the value of mineral production has increased in recent years on a dollar basis, there have been no new major mines developed or opened during this time. Coal has tremendous growth potential. The reserves in the North-east are sufficient to sustain optimistic export levels for many years. Coal has the potential of becoming the dynamic growth sector in the B.C. . economy, and as such, is of interest from the point of view of an eco-nomic development strategy for the province as a whole. The Northeast Coal exercise may be the f i r s t comprehensively planned resource development in B.C. Government is taking the lead in planning this sector. Government involvement is seen as necessary to en-sure that development is consistent with overall provincial goals. Indi-vidual coal developers will not have this overall perspective in mind. The overall goal is to promote economic growth so long as environmental and social costs do not exceed the economic benefits to the province. 3 Regional disparities, per se, are of secondary importance in the planning of this project. Given these objectives, the planning process for the Northeast Coal Sector would seem to be effective. Certainly no other sector has been as thoroughly evaluated. Traditionally, government's role has been one of responding to the initiatives of the private sector on an incre-mental or project by project basis. For the f i r s t time there is an over-al l strategy that includes other economic sectors such as forestry and tourism. Government is planning the key infrastructure components -transportation and settlement. The fe a s i b i l i t y of a l l concerned sec-tors depends on road and rail infrastructure being in place. In many respects Northeast Coal represents a unique opportunity. It has forced an evaluation of resource development policy in British Columbia. The stimulus was provided by the mining companies. They wanted commitments from the Provincial Government so that, when negotiat-ing with the Japanese, they could make certain guarantees such as delivery price and schedules. To make any such guarantees the mining companies require policy commitments - particularly with respect to transportation and settlement infrastructure, royalties and, to a degree, manpower policies. 1.2 Objectives of the Thesis Given the uncertainties of the market and the high costs of bring-ing the coal onto the market, i t is impossible to accurately predict the 4 level and timing of coal development. Yet the implications of coal devel-opment for the Peace River - Liard Region could be immense. . The current regional trends of economic stagnation and population decline may be re-versed i f development proceeds. The social and economic impact on individ-ual communities, especially Chetwynd could be even more dramatic. Faced with these possi b i l i t i e s , i t is clear that there is a recognized need for planning at both the local and regional level. Systematic planning cannot be undertaken without r e a l i s t i c know-ledge as to possible future events. Only with advance knowledge of the order of magnitude of population growth and subsequent infrastructure requirements can the communities adequately plan for the future. Fur-thermore, a certain amount of lead time is necessary - planning for essential services must be well in advance of major developments to avoid crises in such areas as the housing sector and to avoid undue strain on delivery of social services. This paper will attempt to anticipate the likely effects of potential coal developments in the northeast of British Columbia. Specifically, the objectives are as follows: (a) To determine the level of change that can be r e a l i s t i c a l l y expected to take place, in terms of developments proposed for particular communities, coal developments adjacent to these communities and the development of a new community at Tumbler Ridge; 5 (b) To determine the capacities of the various communities in the northeast region to accommodate a range of expected changes; (c) To determine the range of actions that will have to be taken by the Province and the various communities to accommodate this change. 1.3 Organization of the Thesis The general approach adopted for this paper is the generation of scenarios which encompass the range of relevant development poss i b i l i t i e s . It is f e l t that this approach is the simplest method available that deals with the uncertainties surrounding the probability of individual projects being developed. The f i r s t step is to describe the individual projects. They are summarized in terms of location; magnitude of reserves; production sch-edules; development or construction schedules; employment scheduling; infrastructure requirements; location of the deposits; community to be impacted and so on. In the second step the communities identified as potentially being affected are described with respect to population trends, employ-ment structure, commercial structure and housing. A f u l l community des-cription is necessary as a base against which the predicted impacts of development can be compared. 6 A third section considers the methodology of economic impact assessment. Three methods of estimating or predicting economic impact are discussed and evaluated as to their usefulness for this study. Given the nature of the problem and the objectives of the thesis, the income/expenditure approach was chosen as the method of analysis. Also examined is the population impact. A population model serves as the link between the economic analysis and the community impacts. Di-rect, indirect and induced employment are translated into a detailed population breakdown. Another section is devoted to a summary of the impact of the coal developments on community services. In particular housing, physical ser-vices and social services are examined. Lastly, a summary and conclusions are presented including the impacts of development on the existing com-munities and steps that must be taken to accommodate change. Before getting into the main body of the thesis, i t is useful to review some of the background material to northeast coal. A knowledge of certain events is essential to an understanding of the implications of development. Hopefully this will give the reader a feel for the North-east Coal sector and the process as i t has unfolded so far. To this we turn our attention in the next section. Notes to Section 1.0 1. Ministry of Economic Development, The Manual of Resources, p. 50. 2. Ibid. 8 2.0 BACKGROUND TO NORTHEAST COAL Coal has been known to exist in the Peace River region since ex-ploration by Alexander MacKenzie and others in the late eighteenth and early nineteenth centuries. Over the years a number of mines have operated off and on, mostly in the Chetwynd area. The last of these closed in 1964. Interest in northeast coal was once again stimulated by the ex-port of Crowsnest coal to the large Japanese market for coking (metallur-gic) coal. The steel industry, most notably the Japanese steel industry, is expected to be the main source of export demand for British Columbian coal. Compared to the Crowsnest coal f i e l d , the Peace River seams are more complex for mining and are located in a more severe geographic en-vironment. However, tests indicate that the measured reserves are of a higher quality for coking as compared to Crowsnest coal and compare very favourably with other sources of supply in United States and Australia, the main competitors for the Japanese market.1 On this premise, several mining companies engaged in extensive exploration activity from 1969 until the present time. A number of mining companies resumed major initiatives in explor-ation and marketing in the mid-1970's. Several took out options to de-velop properties including Quintette Coal Limited - a joint venture of Denison Mines, two Japanese steel companies and Imperial Oil Limited -and British Petroleum Canada Limited. These two development proposals would see 5 million and 3 million tonnes per year respectively extracted at f u l l development. 9 Other key events in the mid-1970's included the commissioning of a report by the Ministry of Economic Development under the terms of a Subsidiary Agreement on Planning with the federal Department of Regional Economic Expansion. This report, entitled "The Northeast Report '75", studied the economic development potential of the Northeast Region. Among the findings was that there is a major opportunity for regional economic development and diversification of the economy through develop-ment of the coal fields. The report cautioned that detailed and care-ful planning would be required to maximize economic benefits while mini-mizing adverse social and environmental impacts. At this time, there were no explicit regional resource develop-ment policies within which to respond to the initiatives of private mining companies concerning coal development. The mining companies would have preferred to have policy commitments from the government as a means of improving their negotiating position with the Japanese steel interests. They were primarily interested in the government's position with respect to townsite and transportation infrastructure, coal royalties and other taxes, and environmental policies such as reclamation, pollu-tion control and other requirements. For their own part, the government position was not clear on the question of assuming direct equity in coal development or to continue on as in the past assuming a supportive role in marketing efforts, provision of infrastructure and so on. Against this background, in January 1976, the Ministry of Econo-mic Development submitted to Cabinet a policy paper proposing a detailed 10 evaluation of the potential v i a b i l i t y of northeast coal developments. Following up on the submission, Cabinet established the Cabinet Committee on Coal Development to investigate coal policy and development issues. Five ministries are represented on the Cabinet Coal Committee: Economic Development; Mines and Petroleum Resources; Energy; Transport and Commu-nications; Environment; and Forests. The respective ministers and deputy ministers s i t on the committee with the exception of Forestry which is represented by the minister only. A technical committee comprised of the respective deputy ministers was set up to oversee a f e a s i b i l i t y study, the Northeast Coal Study. Economic Development was assigned the respon-s i b i l i t y of coordination of the study. 2.1 The Northeast Coal Study The scope of the Northeast Coal Study was to "investigate the economic, social and environmental consequences of proceeding with various possible coal mining developments, and of providing the transportation links, town f a c i l i t i e s and other supporting infrastructural services which these mines would require." Five subcommittees were established to report to the Cabinet Coal Committee on various aspects of the pro-posed developments: (1) the Environment and Land Use Sub-Committee (ELUSC), which is responsible for the overall evaluation of environ-mental aspects of proposed developments; 11 (2) the Transportation Sub-Committee (TptSC), which is respon-sible for the overview planning of transportation, communi-cations and u t i l i t i e s networks; (3) the Townsite and Community Development Sub-Committee (TCDSC), which is responsible for assessing tne need for new communi-ties, and for priorizing alternative locations for town development; (4) the Manpower Sub-Committee (MSC), which is responsible for developing labour supply policy recommendations; and (5) the Coal Resources Sub-Committee (CRSC), which is responsi-ble for evaluating the coal resource. Seven reports have been released by the Cabinet Committee. Some of the findings of these reports are summarized below. The reserves of the Peace River coal f i e l d are very extensive. The inferred inplace re-sources have been estimated at 7.7 b i l l i o n tonnes. Of this approximately 3 300 million tonnes have been classified as inplace mineable reserves. The difference in classification between inferred resources and mineable reserves is a variable of degree of confidence of existence (geological knowledge), and degree of fe a s i b i l i t y of production (economic knowledge). "Reserves" are those resources that have been accurately measured and de-termined to be mineable given current technology and economic conditions. The inplace reserves can sustain production for at least 25 years at rates of extraction currently being proposed. In many cases the mine-head costs of Northeast coal will be high due to higher northern develop-12 merit costs, d i f f i c u l t mining resulting from highly fractured geological structures, and costs due to anticipated high labour force turnover rates. From an economic and technical point of view the most efficient r a i l route and port combination for shipping coal for export is the CNR railihe from Prince George to Prince Rupert with a coal terminal at 4 Ridley Island. Construction of the r a i l routes could not be completed before 1980 without substantially increasing construction costs. The development of a single new community would be required to serve the two major proposed operations, Sukunka/Bullmoose, and Babcock/ 5 Murray. The resulting population would be in the order of 10,500. Two townsite alternatives were given detailed consideration. Tumbler Ridge was chosen largely due to more favourable physical features and central location relative to the commuting distances to the various mine-sites. Direct employment could peak as high as 3,500 in 1987. Labour shortages will not be likely for the open pit operation in terms of availability of people but labour supply and demand may be mismatched qualitatively, especially for skilled jobs and underground workers. Appropriate manpower training and development programs are essential to meet this problem. 13 The environmental impacts of coal development need not be ex-cessive provided minesites and related infrastructure are designed to avoid or reduce the identified impacts. The medium to long term export potential for coking coal is not as optimistic as i t seemed in the early 1970's. Japanese import require-ments are not as great as once throught. Steel production is down world-wide with a subsequent reduction in coking coal requirements. The above work programme indicated that the v i a b i l i t y of the Northeast Coal developments was dependent on: favourable market condi-tions for coking coal (volume and price), a sufficient supply of under-ground miners, and the successful application of certain specialized mining techniques. Uncertainties in future market conditions and the costly infrastructure requirements seem to be the major barriers to development. Long term export contracts appear to be a prerequisite to ful l scale development in the Northeast. However, development at some of the properties on a smaller scale may be feasible. An additional $12.6 million was allocated for the period 1977 -1978 to further the work of the Northeast Coal Study. A work program was developed to accomplish two objectives:^ (1) To obtain a better comprehension and assessment of the c r i -tical factors of market conditions, underground labour sup-ply and underground mining technology, identified as con-14 straints to be overcome in developing the Northeast Coalfield; (2) To take the project to a stage of readiness in terms of final engineering and design studies for roads, r a i l , community development, and environmental management such that a major decision could be taken in the f a l l of 1978 as to whether a 1980 start-up could be met. These studies were completed in March 1978. As of this time no decision to proceed has been made. 2.2 The Coal Guidelines Process The Environment and Land Use Committee (ELUC) is a cabinet com-mittee composed of nine ministries responsible for resource use and con-servation and major public f a c i l i t i e s such as highways. ELUC has adopted a document prepared by its secretariat entitled "Guidelines for Coal 8 Development". This document describes a four stage impact assessment procedure required by the Provincial Government for the review of license and permit applications before coal mines can be developed. The process is coordinated by a Coal Guidelines Steering Committee, comprised of rep-resentatives of the Ministry of Mines and Petroleum Resources, Ministry of Economic Development and the ELUC Secretariat. The Coal Guidelines Steering Committee is a separate entity from the steering committee as-sociated with the subcommittee structure of the Northeast Coal Study. The review process is one that goes from a general overview of the project 15 to specific impact assessments and management proposals with review at each stage by the Coal Guidelines Steering Committee and the appropriate line departments including the relevant subcommittees of the Northeast Coal Study. The process begins with the submission of a Prospectus by the developer to the Ministry of Mines and Petroleum Resources. The Prospec-tus, which is reviewed by the Coal Steering Committee, is a general out-line of the proposed exploration, minesite and offsite development pro-grams. The Prospectus is circulated to line departments and their com-ments are returned to the Coal Guidelines Steering Committee. The next step is the submission of a Stage I Report. This is a preliminary identification and assessment of the major economic, social and environmental impacts of the proposed development on- the region and specific communities which will be affected. The Stage I Report will include an outline of the development's impacts related to exploration, mine development, reclamation, coal processing, power development, transportation, community development, and the regional economy. An assessment is made of existing data for the region in order that infor-mation gaps may be identified. After consulation iwth relevant Govern-ment agencies, study and/or monitoring programs are initiated to f i l l the identified' information gaps. A systematic documentation of the major interactions between the proposed development and the environment - bio-physical and socio-community - is included at this stage as is a prelim-16 inary estimate of gross economic benefits. Lastly, alternatives for miti-gating or avoiding adverse environmental and social impacts must be in-cluded. The Stage I Report is submitted to the Coal Guidelines Steering Committee and circulated to various line departments for review. If the draft report conforms to the guidelines a formal commentary is submitted to the developer indicating the degree to which the identified alterna-tives are likely to meet required standards. At this point the developer is ready to move on to the Stage II studies. The objective of the Stage II report is to develop a proposal that assesses and plans for economic, social and environmental concerns in such a way so as to maximize net social well being in the region and province. Generally, the Stage II Report parallels the Stage I Report except that more in-depth analysis is called for. The same review pro-cess as for the Stage I Report is applied to the Stage II Report. Ac-ceptance of the Stage II Report represents approval in principle for the development. Stage III is the process of application and granting of the various permits and licences as required by various statutes. Altogether, seventeen statutes are applicable including: Coal Act, Coal Mines Regu-lation Act, Controlled Access Highways Act, Corporation Capital Tax Act, Environment and Land Use Act, Forest Act, Income Tax Act, Land Act, Land Registry Act, Mineral Land Act, Mining Tax Act, Municipal Act, Parks Act, Pollution Control Act, Taxation Act, Water Act and Regulations, and the Wildlife Act. 9 17 Generally submission of detailed plans and analyses are re-quired for statutory approvals. Also during this stage monitoring pro-grams for the construction and operation phases are to be designed. Suc-cessful projects are granted the necessary permit approvals and a pro-duction lease is granted by the Lieutenant-Governor in Council upon the recommendation of the Minister of Mines and Petroleum Resources. The last stage of the process is the implementation of continu-ing monitoring programs. Key areas include air and water quality and surface reclamation. The most intensive monitoring is done in the de-velopment phase. In the operations phase the normal regulatory functions such as safety standards are implemented. 2.3 The Nature of Resource Planning The decision to exploit natural resources is most often made by the private sector. The private sector is assumed to be motivated by profit concerns. Limitations on development of resource based industries in the northeast as opposed to alternative regions of the provice are the result of estimations of profitability as perceived by private investors. This, in turn, is affected by the market for the resource or product and the costs associated with producing them. The rationale for public sector involvement in resource sectors of the economy is both direct, in that resources are owned by the Crown, 18 and indirect, in the sense that the public sector has a broader mandate than the narrow, primarily economic one of individual developers. The structure of the B.C. economy is such that primary resources support all other sectors. Although the same could be said of most every economy, this relationship is particularly strong in B.C. because other sectors are, relatively speaking, underdeveloped. This is particularly true, by definition, of hinterland areas such as the northeast. To the extent that the economy is resource based, i t could be described as a negotiated economy.1^ Prior to development of a resource, negotiations take place between private sector developers and the appro-priate government agencies. Through this process government attempts to realize public goals and objectives. In exchange is offered develop-ment rights (leases, permits, etc.) and, where appropriate, concessions such as infrastructure investments or tax breaks. Planning is undertaken by both public and private sectors. Pri-vate sector planning is characterized by decentralization and economic motivation. Although decentralized, decisions are not necessarily made locally. Multi-national firms most often reserve policy and other fund-amental decisions for the head office, delegating only the routine deci-sion-making to the location of the operation. Public sector planning is broader in scope and may include non-economic issues and objectives. Like private sector decisions, public policy decisions are often made in a different location from where they may be actually implemented (i.e. Victoria or Ottawa). 19 There is another dimension of planning that deserves mention. Planning may be sectoral and/or spatial in its scope. Sectoral planning usually refers to primary resource sectors such as fishing, forestry, coal and so on, but can include other economic sectors such as transpor-tation, communications, power or recreation and tourism. In fact, sec-toral planning may also encompass non-economic concerns such as manpower planning, education, parks and social services of all types. The spatial dimension of planning is concerned with distribution of people and ser-vices throughout the province. This may imply a development strategy favouring certain location or regions in the province or i t may be con-cerned with allocation within a specific region or among certain social groups. Resource planning tends to be sectoral although i t may be inte-grated with spatial or regional concerns into an overall, comprehensive planning process. This is usually the case with development planning for an underdeveloped or declining region. Comprehensive approaches are less often exercised in developed or growth regions, the implicit rea-soning being that growth in i t s e l f is an indicator of health hence structural intervention is unnecessary. 2.3.1 Planning in the Northeast When the mining companies began approaching the government with proposals for large scale development of northeast coal and requests for 20 provision of townsite and transportation infrastructure there was uncer-tainty as to how to respond. The traditional role of the Provincial Government in B.C. with regard to resource development has been a sup-portive one. The government would provide or assist in the provision of infrastructure and would actively promote B.C. resources in foreign mar-kets. It has not been the practive to assume an equity position in re-source development. However, northeast coal represents a different situ-ation in some key respects. This was not just another incremental deci-sion. The entire region would be radically altered socially, economically, and environmentally. Therefore, a decision was made to carefully evaluate the implications of coal development before making any commitments. Would the benefits - balance of payments, tax revenue and employment - outweigh the costs - social and environmental disruption, and infrastructure in-vestments? Out of this process has evolved a coal policy for the northeast. Basically the position adopted is that coal development is approved in principle but with a wait and see attitude with respect to the market. The government does not wish to commit i t s e l f to fu l l scale infrastruc-ture development on the basis of future expectations of market conditions that may or may not materialize. In the meantime small scale developments will be encouraged and marketing efforts will be confined. Design and policy analysis for transportation and townsite infrastructure is being carried out under the terms of the second phase of the Subsidiary Agree-ment to Evaluate Northeast Coal Development and world markets will be 21 continually monitored so that decisions can be made quickly should c i r -cumstances warrant this in the future. For the f i r s t time government is taking the lead in planning re-source development in B.C. Instead of providing assistance in the develop-ment of offsite infrastructure, government is directly involved in design-ing and analysing townsite and transportation infrastructure. Manpower training and development programs will be organized. A policy of fixed royalties for thermal and metallurgic coal has been adopted. A planning process for large scale coal developments has been implemented to ensure that assessment of land use, environmental and socio-economic impacts is undertaken prior to the approval process. While i t is unquestionably an improvement from resource planning in the past, the northeast coal experience s t i l l has some major short-comings. For example, i t is questionable that local interests are effect-ively represented. The decisions are being made in Victoria and in the head offices of the mining companies. Typically, administrators and pro-fessionals in the region are the last to be informed of important deci-sions or findings since lines of communication are weak. Representation of a l l affected bodies should be sought to the maximum extent feasible. This is already the case with conventional resource management in the province. Here a committee structure is employed to resolve conflicts and coordinate a l l concerned interests. The Environment and Land Use Committee coordinates at the provincial level and the Regional Resource 22 Management Committees and Regional Districts at the regional level. However, the planning links between provincial planners and local interests are not well defined. The northeast coal planning exercise is something of an experi-ment. It is the f i r s t resource sector and region that has been compre-hensively researched and planned. However, the remainder of resource sectors are planned in an essentially ad hoc fashion and no agency has a clear mandate to formulate complete provincial and regional development strategies. Resource planning is isolated from industrial development planning. In the northeast coal exercise, these concerns were integrated into one overall frame of reference. This procedure should be extended so that a set of provincial and regional land use, resource and indus-t r i a l goals and objectives is formulated. The institutional framework is already in place, although the mandates of the committees may have to be expanded to include these broader concerns. 2.4 Notes to Section 2.0 - 1. Resource Sub-Committee on Northeast Coal Development, Coal Resource Evaluation. 2. Environment and Land Use Sub-Committee, Preliminary Environ- mental Report on Proposed Transportation Links and Townsite, p. 1. 3. Resource Sub-Committee on Northeast Coal Development, op. c i t . , p. 2. 23 4. Transportation Sub-Committee on Northeast Coal Development, Northeast Coal Study: Preliminary Report on Transportation  Developments. 5. Townsite and Community Development Sub-Committee, Pre!imi nary  Feasibility Report on Townsite/Community Development, Victoria: Ministry of Municipal Affairs and Housing. 6. Environment and Land Use Sub-Committee, op. c i t . 7. Ministry of Economic Development, Northeast Coal Development  Information Summary, p. 16. 8. Environment and Land Use Committee Secretariat, Guidelines  for Coal Development. 9. Ibid. 10. H.V. Nelles, The Politics of Development. 24 3.0 PROPOSED COAL MINING PROJECTS This section outlines proposed coal mining projects in the Northeast. Location, level of reserves, production and development schedules are considered. Employment and income effects are described and impacted communities are identified-. 3.1 Sukunka/Bullmoose (B.P. Canada) British Petroleum Canada, through B.P. Canada Holdings, has ac-quired 100% control of the Bull moose property. This property was formerly held by Brameda Resources. Additionally, they hold 87.5% of the adjoining Sukunka Property with Brascan Resources holding the remaining 12.5%. For-eign Investment Review Act (F.I.R.A.) approval of these transactions was granted in June 1977. Sukunka is located about 60 kilometers south of Chet-wynd and Bullmoose about 100 kilometers south. Access to the two proper-ties is via two different roads as there is no direct road connection be-tween the two properties. Although there are several coal seams on these properties, only two, the Skeeter and Chamberlain seams, are considered to be economically viable at the present time.1 Recoverable reserves are conservatively es-timated at 88 million tonnes of high quality coking coal, enough to sup-port an annual rate of production of 3 million tonnes of saleable coal 2 for at least 20 years. 25 B.P. is planning to phase development of the properties in two stages. Feasibility of the second stage is contingent upon the comple-tion of a certain infrastructure component which could include a new townsite closer to the property, a new r a i l line, a new port at Prince Rupert and a Provincial Highway. Stage 2, which involves an increase in yearly production from 0.8 million tonnes (the maximum production of stage I) to a maximum of 3 million tonnes, will only be undertaken i f the required infrastructure is in place. It should not be inferred from the above that there are no infra-structure costs involved in stage I. Infrastructure related to the needs of mine employees such as housing, water and sewer and roads etc. as well as upgrading of the road up the Sukunka Valley are necessary during this stage. The c r i t i c a l constraining factors are the ra i l and port f a c i l i -ties which have tonnage limits and yet are essential i f there is to be access to export markets. It is proposed that in the i n i t i a l phase coal will be produced from both the Sukunka and Bullmoose properties. Two mines will be devel-oped in the Saddle Creek area (Bullmoose). The workings of the Window Mine (Sukunka) will be extended towards the Saddle Creek mines so that a connection between these mines will eventually be made in 1981 or soon 3 after. The coal that is produced prior to completion of the connection will be trucked to Chetwynd for washing via roads up the Sukunka and Bullmoose Valleys. After the connection is made between the Window mine and a Saddle Creek mine then the entire production (.5 million tonnes) 26 will be trucked via the Window mine up the Sukunka Valley as the dis-tance to Chetwynd is shorter and transportation cost may be minimized. Production in the f i r s t stage will increase from an i n i t i a l 40,000 tonnes in 1978 to 500,000 tonnes in 1980. Production will remain at 500,000 tonnes until Stage 2 begins. Coal produced in Stage I is to be processed at a temporary wash plant in Chetwynd. The capacity of this f a c i l i t y will be approximately 4 150 tonnes per hour. The washery is to be modular and can be trans-ported by truck and assembled on site. The washery is expected to be in use for about five years after which i t could be dismantled and moved elsewhere. Through use of the temporary washery i t will be possible to gather test data on the washing characteristics of the coal as well as to train mine workers. This information is necessary in order to de-sign a more efficient permanent plant and to develop customer confidence, helpful in securing an early market. Stage 2 involves an increase in production over four years from .8 million tonnes to 2 million tonnes and possibly 3 million tonnes. By the time f u l l production is reached a l l production will be brought out of the Saddle Creek mines. By this time a permanent washing f a c i l i t y will be operational. The washery likely will be located at the confluence of Bullmoose and Saddle Creeks, the Bullmoose townsite. 27 TABLE 3.1 B.P. DEVELOPMENT SCHEDULE YEAR OUTPUT (TONNES) OPERATING CONSTRUCTION WORKFORCE WORKFORCE 1977 1978 40,000 50 100 1979 350,000 160 250 1980 500,000 240 230 1981 500,000 240 230 1982 800,000 400 300 1983 1 ,100,000 500 300 1984 2,000,000 740 200 1985 3,000,000 920 100 1986 3,000,000 1,100 1987 3,000,000 1,100 Source B.P. Exploration Ltd., 1977 and Ministry of Economic Development, memo dated November 1, 1977 28 3.2 Babcock/Murray (Quintette Coal) The Quintette coal licenses were acquired by Denison Mines Limited in 1969 and 1970. Exploration began shortly after. A feasi-b i l i t y study completed in 1976 examined the possibility of producing 5 5 million tonnes of coking coal annually. Based on the favourable results of the study, the Japanese steel industry expressed interest in negoti-ating a long term purchase agreement with Quintette Coal provided the coal could be exported at competitive prices. A proposed sales agree-ment called for the delivery of 92,500,000 metric tonnes of metallurgical bituminous coking coal produced by Quintette, delivered over a period of 20 years, commencing April 1, 1980. Denison Mines is the major share-holder in Quintette Coal Limited with 38.25% of the total equity. The remainder of equity is distributed among Mitsui Mining, 22.5%, Tokyo Boeki, 22.5% and Imperiod O i l , 6.75%.7 The coal properties are located about 95 kilometers south of Chetwynd and 105 kilometers south west of Dawson Creek. Indicated in-place reserves are estimated to be 1 b i l l i o n tonnes and potential in-Q place reserves are estimated to be greater than 2.8 b i l l i o n tonnes. Development will be at two separate sites, Babcock and Murray (also referred to as Wolverine). The Murray is proposed to be developed f i r s t . There are to be two open pits on the Murray site, the Sheriff p i t, o r i -ginally scheduled for a 1978 start-up, and the Frame pit, scheduled for 1984. At the Babcock area there are to be two open pits as well, the 29 Windy p i t , scheduled for 1980, and the Roman pit scheduled for 1984, in addition to one underground mine. Quintette plans to operate a coal pre-paration plant (washery) at each of the sites. The f i r s t treatment f a c i l -ity w ill be adjacent to the Sheriff and Frame pits. Construction is scheduled to begin in 1977 and by 1980 i t is expected to be operating at fu l l capacity of 2 million tonnes per year. The second wash plant, on the Babcock site, is expected to reach its f u l l capacity of 3 million tonnes per year in 1983. Coal will be transported from the preparation plants to Prince Rupert in unit trains with a capacity of 10,000 tons. g It TS anticipated that six unit train sets will be required. There are considerable infrastructure requirements that must be met i f the Quintette project is to go ahead. These requirements include a townsite, access roads to the townsite and minesites, railway trackage and upgrading of existing track, and power lines to the mines and the townsite. Pre-production development was expected to begin in 1977 to meet a start-up date of 1978. However, these dates must be revised in light of more up-to-date information. The following development schedule is currently the best available estimate. 30 TABLE 3.2 YEAR QUINTETTE DEVELOPMENT SCHEDULE PRODUCTION PER YEAR CONSTRUCTION (MILLIONS OF TONNES) WORKFORCE OPERATING WORKFORCE 1979 475 1980 0.25 750 83 1981 3.0 600 990 1982 3.65 495 1534 1983 5.0 495 1650 1984 5.0 130 1650 1985 5.0 130 1650 1986 5.0 1650 1987 5.0 1750 Source Note: Ministry of Economic Development, Interdepartmental memo, dated November 1, 1977. Construction figures include a townsite labour force 3.3 Carbon Creek (Utah Mines) Development rights to Carbon Creek are owned by Utah Mines Lim-ited. Carbon Creek is located 30 kilometers west of W.A.C. Bennett Dam or 50 kilometers west of Hudson's Hope. Chetwynd is about 75 kilometers southeast. Hudson's Hope would be the preferred location for company employees. Recoverable reserves are f a i r l y extensive at 75 million 31 tonnes of which 39 million are recoverable by surface techniques and 35 million by underground methods.1^ In the Utah Stage 1 Report i t is indicated that construction is planned for the period 1977 - 1980, pre-production from 1978 to 1981, and production from 1980 - 2004 with f u l l production of 2.3 metric tonnes of clean coal per year being reached in 1982. In the table below the sch-edule has been moved ahead one year. There will be two open pits, one underground mine and one contour mine. Infrastructure requirements in-clude: a construction camp in the vicinity of the mine industrial com-plex, a mine access route from the Bennett Dam, a wash plant, mine shops, warehousing, offices and housing for workers. The coal would be trans-ported to rapid loading f a c i l i t i e s at Windy Station where i t would be shipped via unit trains to Prince Rupert. TABLE 3.3 UTAH DEVELOPMENT SCHEDULE YEAR PRODUCTION PER YEAR (MILLIONS OF TONNES) CONSTRUCTION WORKFORCE OPERATING WORKFORCE 1978 108 1979 588 1980 0.35 636 200 1981 0.80 350 385 1982 1.90 194 729 1983 2.30 862 Source Urat Stage 1 Report 32 3.4 Cinnabar (Cinnabar Peaks) This property is located around 25 kilometers south of Hudson's Hope and approximately 40 kilometers northwest of Chetwynd. The mining rights are owned by a small firm from Fort St. John called Cinnabar Peak Mines Limited. The low magnitude of reserves weakens economic j u s t i f i -cation of development. However, there are advantages to the Cinnabar holdings - the proximity of Hudson's Hope and Chetwynd; the infrastruc-ture already in place and the readily available access routes. If development occurs, start-up could be as early as 1984 with f u l l production of 0.5 million tonnes per year by 1985 (see development schedule below). This would involve an operating work force of approx-imately 180 at f u l l production. The construction labour estimated below are based on comparable projects and not from direct communication with Cinnabar Peak Mines. The workforce would likely be drawn equally from Chetwynd and Hudson's Hope. TABLE 3.4 CINNABAR DEVELOPMENT SCHEDULE YEAR PRODUCTION PER YEAR CONSTRUCTION OPERATING (MILLIONS OF TONNES) WORKFORCE WORKFORCE 1983 150 1984 0.35 100 120 1985 0.5 180 1986 0.5 180 1987 0.5 180 Source Ministry of Economic Development, Interdepartmental memo dated November 1, 1977. 33 3.5 Teck (Brameda) The last potential development to be considered is the Gates Seam on the Sukunka property. The mining rights to this seam have been retained by Teck Corporation Limited. The mine would be a small scale endeavor involving the extraction of 1 to 1.5 million tonnes per year for perhaps 10 years. However, i t is a surface operation and could therefore go ahead at relatively short notice. The timing of the de-velopment schedule below was chosen arbitrarily because of this uncer-tainty. Construction and operating manpower build-up was estimated on the basis of company data from similar projects in the northeast rather than on direct communication with Teck. TABLE 3.5 TECK DEVELOPMENT SCHEDULE YEAR PRODUCTION PER YEAR CONSTRUCTION OPERATING (MILLIONS OF TONS) WORKFORCE WORKFORCE 1982 150 1983 0.35 100 120 1984 0.50 180 1985 0.50 180 3.6 Other Developments In addition to coal development two other projects may have an impact on the study area in the future. It is f e l t that these potential 34 developments should be included in the analysis because they will add to regional and community impact. To a certain extent, they will compete with the coal projects for available labour and will add to the increased demand for services. These projects are briefly outlined below. 3.6.1 Westcoast Transmission Gas Scrubbing Plant Westcoast Transmission is building a pipeline and will be build-ing a gas scrubbing plant near Chetwynd. To construct the plant and a pipeline an average workforce of around 500 will be employed over a period the two years 1978 and 1979. The operating work force would be approxi-mately 50. The community to be impacted is Chetwynd. In fact W.C.T. has already purchased a number of lots in Chetwynd for their employees. 3.6.2 Forest Products There are a number of development possibilities in the forestry sector of the Northeast. Options include expansion of existing saw mills and the construction and operation of a new m i l l . Two sawmills in Chet-wynd, Canfor and Chetwynd Forest Industries, were identified as having potential for expansion in the N.E. Report. 1 1 This would result in the addition of up to 85 direct jobs. In the same report the possibility of a new mill producing 90 MM fbm at Tumbler Ridge is brought out. Direct 12 employment was estimated at 240. 35 3.7 Summary of Development Possibilities The following table summarizes the developments discussed above. In a later section the projects are combined into five development pro-f i l e s for the region. As can be seen from the table the total poten-ti a l for the region is very significant, over 4,400 direct jobs could be created by 1992. Timing of the projects could prove to be a problem especially with regard to labour force attraction. TABLE 3.6 SUMMARY OF PROJECTS COMPANY PRODUCTION OPERATING EMPLOYMENT AFFECTED COMMUNITY START-UP DATE A COAL B.P. 3.0 M tonnes/yr 1 ,100 Chetwynd/ Tumbler Ridge 1978 Quintette 5.0 M tonnes/yr 1 ,750 Tumbler Ridge 1979 or 1984 Utah 2.3 M tonnes/yr 862 Hudson's Hope 1978 or 1983 Cinnabar 0.5 M tonnes/yr 180 Hudson's Hope/ Chetwynd 1983 Teck 0.4 M tonnes/yr 80 Chetwynd 1982 B OTHER DEVELOPMENTS Sawmi11 90 mm fbm 240 Tumbler Ridge 1982 W.C.T. — 50 Chetwynd 1979 Sawmill Expansion 130 Chetwynd 1978-79 36 3.8 Notes to Section 3.0 1. B.P. Exploration Canada Ltd., Prospectus for Sukunka/Bullmoose  Property, p. 1. 2. Ibid. 3. Ibid., p. 23. 4. Ibid., p. 28. 5. Quintette Coal Ltd.., A Study of the Socio-Economic Impact of  the Proposed Mine Development. 6. Quintette Coal Ltd., Quintette Project Information Survey, p. I. 7. Ibid., p. i i - 2 . 8. Ibid., p. i-1. 9. Ibid., p. i i - 7 . 10. Utah Mines Ltd., Carbon Creek Coal Development, Stage I Pre- liminary Impact Assessment, Volume I. 11. Ministry of Economic Development, A Summary Report on  Development Possibilities in the Northeastern Region of  British Columbia, p. 30. 12. Ibid. 37 4.0 DESCRIPTION OF THE REGION In order to determine the impact of a project or number of pro-jects on communities there must be a base for comparison. In the ab-sence of knowledge as to what circumstances would be without develop-ment of the project(s) in question i t is not possible to estimate the impact due to the project(s). This section outlines some of the major features and trends of the Northeast region and the three existing com-munities most likely to be affected by coal development: Chetwynd, Hudson's Hope and Dawson Creek. 4.1 The Northeast Region Although the Northeast Region comprises nearly 25% of the pro-vince's land area, only 2% of the total B.C. population lives there. In 1971 this amounted to 43,996.^ Population growth has been irregular in the past as is typical of resource based economies. Between 1966 and 1971 population increased by 6.2% compared to a 16.6% growth rate for the 2 province during the same period. During the previous five year period, 3 1961 to 1966, the rate of increase was 32%. There are three main sub-regions in the Northeast. These are centred on Dawson Creek, Fort St. John and Fort Nelson. These three com-munities comprise about 50% of the region's population. Of the remain-ing population about 80% is rural and the rest is distributed among a number of secondary settlements including Chetwynd, Hudson's Hope, Pouce Coupe and Taylor. 38 39 The economy of the Northeast region is principally based on for-estry, agriculture and to some extent petroleum products. Forestry and coal have the greatest potential for development. Other sectors such as agriculture and tourism do not have much potential for expansion, especially in terms of employment creation. The population of the Northeast region is relatively young and is male biased, particularly in the age 35 - 64 cohort. This reflects the male orientation of the employment structure and the selective mig-ration that tends to occur because of this. 4.2 Chetwynd 4 The population of Chetwynd was estimated at 1,462 in 1976. The growth rate has averaged 4.3% per year since 1961 although there is con-siderable fluctuation from year to year reflecting economic developments in surrounding areas. Population is divided very evenly among male and female with 50% of the population and 69% of the labour force being male. The population of Chetwynd is f a i r l y young with 40% being under the age 5 of 15 and only 2% being 65 or older. The economic base of Chetwynd and the surrounding area is p r i -marily based on the forest industry and to a lesser extent on coal mining and agriculture. These two sectors also have the most potential for eco-nomic development. Potential employment from a new sawmill or expansion TABLE 4.0 0 EXPERIENCED LABOUR FORCE BY INDUSTRY PEACE RIVER LIARD REGIONAL DISTRICT Town A q r l e . F o r e s t r y F i s h i n g & Trapping Mines Hanuf. Construction Transp'n. Trade Finance 4 Ins. & Real Fst. ' Conmunlty and Business Services P u b l i c Admin. 1 Defense Unspec'd • K F H F H F H F M F H F H F H F M F H F H F K F Peace R'vor Area: Dawson Creek 105 5 75 5 10 - 45 5 265 55 445 15 520 200 680 270 85 90 430 020 150 55 225 175 Pcucc Coupe 15 - 5 - - - 5 10 - 5 - 40 10 20 ' - - 10 30 40 5 - 15 10 Rural Area 390 5 85 - - - 80 - 210 5 175 10 175 65 - 65 80 - 40 160 240 5 195 105 F t . S t . John 60 5 35 5 5 - 275 20 170 20 365 25 410 65 415 200 00 55 310 540 100 35 160 125 Rural Area 105 35 20 - - - 115 - 00 5 120 10 220 30 145 55 15 20 90 185 55 - 65 45 T a y l o r - - 5 - - - 30 5 10 5 20 - 20 5 10 10 - 5 20 45 - - 10 -Rural Area 165 70 5 - - - 55 5 25 - 30 - 50 5 • 20 25 - - 25 35 5 - 70 10 Chetwynd - - 20 5 - - 5 - 90 - 30 - 55 15 20 20 5 5 35 70 5 5 15 5 Rural Area 15 10 65 - - - - - 95 - 55 - 50 - 25 15 - 20 50 40 - - 45 10 Noberley IH - - 10 - - - - - 5 - - - 5 - - - - - 5 - - - 5 -I M s o n Hope - - 10 - - - - - 5 - 125 - 70 15 15 15 - 5 50 65 5 5 15 10 Rural Area 60 15 15 - - - 10 - 20 -' 95 60 5 15 10 5 - 15 25 - - 15 5 Sub-Total 915 145 350 15 15 - 620 35 905 90 1465 60 1675 415 1365 605 270 220 1100 2025 565 110 835 SCO o Source: St a t i s t i c s Canada 1971 Census Tapes. 41 T A B L E 4.1 CHETWYND DEMOGRAPHICS DEMOGRAPHICS 1966 % 1971 % 1976 % Estimated 1981 % Population: Regional District Municipality 4 1 , 4 4 1 6 4 3 , 9 9 6 1 , ?fiD - 4 3 , 8 4 1 1 4 ^ ? Households: Regional District Municipality 1 1 , 0 5 0 2 9 1 Household size: Regional District Municipality 4 . 2 3 . 8 4 . 1 s o u r c e : M i n i s t r y o f M u n i c i p a l A f f a i r s a n d H o u s i n g C o m m u n i t y P r o f i l e . 42 of an existing one could amount to 285 new jobs during the period 1978-82.6 Coal mining could create even more employment. The pro-posed gas scrubbing plant would provide an additional 50 jobs. TABLE 4.2 EXISTING HOUSING STOCK CHETWYND, 1977 1 Units % 1. Single detached 261 61 2. Apartments 52 11 3. Mobile homes 64 12 4. Medium density residential 54 15 5. Total 431 100% Source 1. Village of Chetwynd Survey and Analysis 2. The Sukunka/Bullmoose Stage 1 Environmental Study Volume 1 Text B.P. Exploration Canada Ltd. Nov. 1977 indicates fur-ther that 100 units were underway or in final planning stages (35 apartments, 15 hourses and 50 t r a i l o r pads). The existing housing stock consists of 431 units with an average household size of 4 1 7 T h e s t o c k c a n b e b r o l < e r i d o w n a s follows: 261 sin-gle detached, 54 medium density units, 52 multiple units and 64 mobile units (Ministry of Municipal Affairs and Housing, Community Profiles). Land availability for housing is adequate. There are 80 serviced lots o and 350 potential lots available for development. 43 The commercial sector of Chetwynd is not very well developed. Chetwynd does not have a significant retail trade area as i t cannot compete with Dawson Creek in this respect. Dawson Creek has long been the regional service centre in this area. TABLE 4.3 CHETWYND COMMERCIAL STRUCTURE COMMERCIAL TYPE GROSS TOTAL FLOORSPACE SQ. METRES/CAPITA (SQ. FT/CAPITA) Sq. Meters (Sq. Ft.) Chetwynd (1500) Trading Area* (3300 or 5050) Hotels/Motels 2,650 (29,400) 1.8 ( 19.6) 0.5 ( 5.8) Retail/Storage 7,350 (81,700) 4.9 ( 54.5) 2.2 (24,8) Office 2,640 (29,300) 1.8 ( 19.5) 0.5 ( 5.8) Misc 970 (10,800) 0.6 ( 7.2) 0.2 ( 2.1) TOTAL 13,610 (151 ,200) 9.1 (100.8) 3.4 (38.5) *Primary trading area for retail/storage - 3,300 people Secondary trading area for a l l other commercial - 5,050 people Source Village of Chetwynd (Survey and Analyses) Stanley Associates Engineering Ltd. 44 4.3 Hudson's Hope 9 Hudson's Hope's 1976 population was 1,319. This is a substan-t i a l decline from the 1966 level of 3,068. This decline was caused by the f a l l - o f f in employment following completion of the W.A.C. Bennett Dam. Despite the heavy out-migration following completion of the dam, the age structure of the community has remained young, 38% of the popula-tion is in the 0 - 1 5 age cohort and 33% is in the 15-34 cohort. 1^ This is about average for the Northeast region. Approximately 53% of the pop-ulation and 76% of the labour force is male. 1 1 The economic basis of Hudson's Hope is operation of the power generation f a c i l i t i e s at the Bennett Dam. Hudson's Hope is also a ser-vice centre for the construction crew at the Site One Dam. Potential for future development comes mainly from possible coal developments. The operating phase of the Site One Dam is expected to generate 15 to 20 permanent jobs. The housing stock in 1971 consisted of 210 single, 10 double, 19 30 multiple and 185 mobile units for a total of 435. Average house-13 hold size is 3.7, slightly below the regional average. Although there is no municipally-owned land available for housing, B.C. Hydro owns many vacant lots. Like Chetwynd, Hudson's Hope does not service a large contiguous area. Therefore, the commercial sector of the local economy is not well TABLE 4.4 HUDSON'S HOPE DEMOGRAPHICS 1966 % 1971 % 1976 % Estimated 1981 % Population: Regional District 41,441 6 43,996 43,841 Municipality 3,068 1,741 1,319 Households: Regional District 11,050 Municipality 435 Household size: Regional District 3.8 Municipality Comments - Employment associated with the operation of the Site One Reservoir is expected to bring approximately 20 families into Hudson's Hope. An additional 50 people may settle in the general area. Source Municipal Affairs and Housing 1977, Community Profiles 46 4.4 Dawson Creek Dawson Creek has been experiencing a population decline during the last two census periods. The population is down from a high of 12,392 in 1966 to 11,885 in 1971 and 10,406 in 1976. 1 4 Despite this Dawson Creek is s t i l l the largest settlement in the Northeast region and comprises 24% of the region's total population. The triale:female ratio is 51/49 and the age structure is f a i r l y young, although not as young as some of the other communities such as Hudson's Hope. Approximately 35% of the popu-lation is in the 0-14 age group, 33% is in the 15-34 cohort, 28% is in 15 the 35-64 age group and the remaining 4% are over 65. The economic basis of Dawson Creek is its role as a regional supply and service centre for the Peace River area, particularly for the agricultural sector. The main economic development potential is related to this role as a regional supply and service centre. The expanded re-gional population and the servicing requirements of coal mines would create employment in those sectors of the Dawson Creek economy. There were a total of 3,090 housing units in 1971 including 2,480 1 g single, 185 double, 430 multiple and 70 mobile. There is a shortage of rental accommodation despite the decline in population however. Land availability for housing is not a problem as the City owns considerable land. Because of its role as a service centre Dawson Creek has a rela-tively well developed commercial/retail sector. The retail structure of Dawson Creek is summarized in the following table. TABLE 4.5 DAWSON CREEK DEMOGRAPHICS Estimated 1966 % 1971 % 1976 % 198] % Population Regional District 41,441 6 43,996 - 43,841 Municipality 12,474 11,885 10,406 * Households: Regional District 11,050 Municipality 3,162 Household size: Regional District 3.8 Municipality 3.9 3.6 Comments - *Dawson Creek: Continuing decline in population anticipated unless Northeast Coal developments are implemented. Impact of coal developments on population at Dawson Creek cannot be estimated until details on their scale and timing are c l a r i f i e d . Source Municipal Affairs and Housing 1977, Community Profiles 48 TABLE 4.6 DAWSON CREEK COMMERCIAL STRUCTURE SQUARE FEET RETAIL STORE TYPE NO. OF STORES Food and Beverage 15 68,439 General Merchandise 9 114,684 Automotive 38 107,775 Apparel and Accessories 9 20,441 Hardware & Home Furnishings 14 38,854 Other Retail 25 48,263 Total 110 398,456 Source Dawson Creek Economic Study Johnston Associates 1975 4.5 Notes to Section 4.0 1. Statistics Canada, 1971 Census. 2. Ibid. 3. Ibid. 4. Ministry of Municipal Affairs and Housing, Community  Profiles. 5. Environment and Land Use Committee Secretariat, B.C. Towns  Study. 6. Ministry of Economic Development, A Summary Report on Develop- ment Possibilities in the Northeastern Region of British Columbia, p. 30. 49 7. Environment and Land Use Committee Secretariat, op. c i t . 8. Ministry of Municipal Affairs and Housing, op. c i t . 9. Ibid. 10. Statistics Canada, op. c i t . 11. Environment and Land Use Committee Secretariat, op. c i t . 12. Statistics Canada, op. c i t . 13. Environment and Land Use Committee Secretariat, op. c i t . 14. Ministry of Municipal Affairs and Housing, op. c i t . 15. Statistics Canada, op. c i t . 16. Ministry of Municipal Affairs and Housing, op. c i t . 50 5.0 METHODOLOGY 5.1 Economic Impact Methodology Early in the process of developing a conceptual framework for the analysis of the economic impact of large projects such as the North-east coal development, i t becomes apparent there is no single established method to undertake such an analysis. It is f e l t that no study has been undertaken which systematically and thoroughly categorizes and compares methods of economic impact analysis. However, there have been articles written critiquing various individual approaches.^ The state of development is not surprising when you consider i t has only been recently that impact studies have become an implicit or ex-p l i c i t requirement for project approval. Statutory requirements to study economic, (or other) impacts before approval is granted by the appropri-ate government agency are not always in place. However, i t has become a requirement in fact, i f not legally, as most departments make an impact study a necessary prerequisite for project approval or include some sort of impact requirements in the terms of reference of contracts let out to private consultants. For example, the Province's "Guidelines for Coal Development" establishes a procedure for assessment of the biophysical and social-economic impacts of coal developments. Coal companies must follow this procedure, among other requirements, before approval is granted by the Ministry of Mines and Petroleum Resources for development. Unfortunately, no specific methodology is mentioned in the Guidelines a l -though they do identify components of an impact study. 51 The main body of the economic impact literature has been developed by private consultants under contract to government agencies or the private sector. In some cases they may be under contract to a private company which is required to submit an impact statement. Most of these studies are designed for a specific project. Through examination of a number of privately done studies, certain conclusions can be drawn. Virtually a l l economic impact studies are based, at least loosely, on the economic base theory. The single most important reason for this is its simplicity, both conceptually and in terms of data demands. Conceptually, models can be classified into three categories: descriptive, predictive and normative. Descriptive models simply represent an existing situation. Often they are used to gain an understanding of a complex system through analysis of the component parts. Descriptive models may also be employed for the purpose of developing predictive models. Predictive models, also called causal or forecasting models, simulate future rather than current situa-tions. Cause and effect relationships are demonstrated and projected over time. Impact analysis is an example of conditional prediction, the consequences of a specified external impact are predicted given an otherwise undisturbed environment. Lastly, normative, or planning, models are extensions of predictive modesl. They are designed to predict what range of performance is acceptable in relation to defined goals and objectives. While most analysts would probably agree a predictive model would be preferable to a simple descriptive model, such as the economic base model, in practise most impact analyses are based on this descriptive model. This fact is due to its simplicity, its low cost and the quality 52 of data generally available. It is f u t i l e to design a model beyond the capacity of available data. Although the economic base model may be conceptually weak compared to other methods of impact analysis, i t is relatively cost effective. There are at least three accepted techniques or tools for un-dertaking economic impact analysis. These are: export base, input-output, and income-expenditure analysis. The following sections will discuss each of these theories as they may be applied to impact analy-sis. Following this will be an outline of the method of analysis pro-posed for the study. 5.1.1 Economic Base Theory Economic base theory is a demand model. That i s , i t assumes that supply of inputs in unlimited and that the key to a region's growth is change in the level of final demand. The central idea is that cer-tain activities in a region lead and determine overall economic develop-ment. These are called basic ac t i v i t i e s . Other nonbasic activities are consequences of the region's overall economic development. Basic a c t i v i -ties are those that produce goods1or services for export outside the region. Basic activities bring income from the outside world. The reasoning i s , in a sense, that a region earns its wealth from the sale of basic or export commodities to the outside world. All other econo-53 mic activities exist as a result of the level of income and demand achieved within the region and therefore depend on basic ac t i v i t i e s . More correctly they depend upon the demand generated by consumers earning their income through employment in basic industries. An economic impact study based on the above model generally proceeds in three steps: (1) identification of export or basic a c t i v i -ties, (2) empirical determination of the relationship between basic and non-basic activities in the region (usually expressed in terms of an em-ployment multiplier), (3) prediction of level of change in the basic sector (often this is known), and subsequent calculation of impact on the non-basic sector, assuming the relationships identified in (2) remain constant. Operationally, the i n i t i a l problem with the above method of analysis is distinguishing between basic and non-basic employment. There are at least four ways of drawing this distinction. The f i r s t , and crudest, is to simply assign industries or sectors as a block to either the basic or non-basic sector. For example, manufacturing, mining and forestry etc. would be assigned to the basic sector while commercial, local government, personal services and other similar ac-ti v i t i e s would be assigned to the non-basic category. The obvious flaw in the above procedure is that almost a l l firms or establishments in a region will produce partly for export and partly for local con-sumption. 54 A second, and more sophisticated, approach in sorting out what is basic and non-basic is through location quotients. A location quo-tient compares regional employment in a specific activity or category with the national average. The implication being that surplus employ-ment produces for export outside the region. A location quotient may also be constructed by comparing percentage of national output (of an activity) to personal income as a percent of the national total. Use of location quotients tends to underestimate a region's exports however, since i t is a measure of net exports, not gross exports. A third method of categorizing economic activity is actually measuring shipments of goods and services out of the region. Detailed information may be next to impossible to obtain however. In this event a sample of firms in each category is often surveyed to keep the pro-ject manageable. Lastly a fourth approach to operationally defining basic and non-basic economic activity is known as the minimum requirements method. This approach involves selecting a large number of regions similar to the one under study and computing the distribution of total employment 2 or income among the various industries. The lowest ranked value of each industry is selected and together these comprise a minimum require-ments profile. The underlying assumption of this approach is that the region with the smallest proportion of employment or income engaged in that industry represents the minimum requirements necessary to service local needs. Basic employment is therefore the sum of employment or 3 income in excess of the minimum requirements level in each industry. 55 Once employment in the region'is designated as basic and non-basic an employment multiplier may be derived by calculating the ratio of total employment to the basic employment. For example, i f i t is observed through one of the above methods that 25% of total employment in a region is basic the employment multiplier is 4.0 (100/25). This means that every basic job in the economy generates an additional three in the non-basic sector, for total employment of four. There are a number of conceptual shortcomings in the economic base approach. For one, exports are considered to be the sole stimulus to growth. The role of consumption in increased spending and the con-cept of leakages in the economy are not explicitly considered. Exports are considered to be homogeneous in terms of their effects on the rest of the economy. No treatment is given the nature of the backward and forward linkages and the subsequent employment in support or indirect industries. The constant ratio of base to service activity that follows from the above simplification is unrealistic. Not only is this ratio likely to be different for various industries, i t also may change over time and vary with other factors such as community size and maturity. The categorization of a l l employment as either basic, or non-basic is a gross simplification. Although the impact of a job in the coal industry with an income of $18,000 would clearly be different than that of a manufacturing job paying $12,000 they are treated as equal, i.e. one job in the basic sector. 56 5.1.2 Input-Output Analysis Input-output is an economic technique which explicitly focuses 4 on interdependences among sectors of the economy. It can be thought of as a type of social accounting. Much the same kind of approach is used as in systems of national income accounting in that double entry account-ing is the technique by which transactions between the region and exter-nal regions and among activities within the region are recorded. All transactions are recorded as both outputs (sales) and inputs (purchases). Unlike other forms of social accounting however, input-output records inter-industry transactions generated by demand for final product. These would be considered double counting in other social accounting proce-dures. Transactions are recorded in dollars in order to document rela-tionships in a common unit. Activities are categorized among the following major economic sectors: "Intermediate - private business activities within the region. The sector is broken down into individual industries such as mining, food processing,;construction, or chemical products. It is sometimes referred to as the interindustry sector because much of the detail of the input-output statements refers to transactions among the separate industries within the sector. Households - individuals.or families residing or employed in the region, considered both as buyers of consumer goods and services and sellers (primarily of their own labour). Government - state, local and national public authorities, both within and outside the region. 57 Government - state, local and national public authorities, both within and outside the region. Outside world - activities (other than government) and indi-viduals located outside the region. Capital - the stock of private capital, including both fixed 5 capital and inventories." All inter-industry relationships (sales and purchases) are dis-played in tables or matrices. The standard input-output model consists of three tables. A transaction table records basic data concerning total flows of goods and services through a l l the sectors of the econo-my including intermediate and final demand. Transactions are recorded in money terms. It may be helpful to cl a r i f y the above with a simple example. Suppose we have a four sector economy composed of agriculture, manufacturing, services and households (final demand). Agriculture may have sold the following: $20 to other firms in the agriculture sector, $30 to manufacturing, $50 to firms in ther service sector and $25 to the household sector for a total output of $125. Manufacturing may have pur-chased inputs of $30 from agriculture, $50 from elsewhere within manu-facturing, $20 from the service sector and $50 from the household sec-tor (in the form of wages) for a total outlay of $150. The transac-tions table is really a descriptive account of the regional economy at a particular point in time. 58 TABLE 5.1 HYPOTHETICAL TRANSACTIONS TABLE Purchasers Sellers Intermediate Sales Agriculture Manufacutring Services Final Sales House-holds Total Outlay Agriculture 20 30 50 25 125 Manufacturing 30 50 20 50 150 Services 45 10 30 40 125 Households 30 60 25 Total Outlay 125 150 125 A second table, the direct requirements table, shows the rela-tive input purchases required by each processing sector per unit of out-put i t produces. This table, also knows as a technical coefficients table, is derived from the transactions table. Each individual entry is arrived at by dividing that particular input by the total outlay of the sector concerned. Using the same example to il l u s t r a t e , the direct requirements column for the manufacturing sector would read agriculture: 0.20; manufacturing: 0.33; service: 0.06. For every dollar of output in the manufacturing sector inputs worth 20<£ from agriculture, 33<t from elsewhere in the manufacturing sector, and 13£ from the service sector. 59 TABLE 5.2 HYPOTHETICAL DIRECT REQUIREMENTS TABLE Agriculture Manufacturing Services Agriculture .16 .20 .40 Manufacturing .24 .33 .16 Services .36 .06 .24 The third and last table of the input-output table is known as a table of direct plus indirect requirements. This table is derived from the coefficients table by matrix inversions. The direct plus in-direct requirements table discloses the total economic impact, sector by sector, of an increase in any one of the individual sectors on the regional economy. TABLE 5.3 HYPOTHETICAL DIRECT PLUS INDIRECT  REQUIREMENTS TABLE Agriculture Manufacturing Services  Agriculture 1.20 .30 .53 Manufacturing .29 1.49 .21 Services .45 .09 1.31 Input-output tables can be constructed at various levels of dis-aggregation according to the needs of the study. Time, manpower, data 60 and other resource constraints play a major role in determining the ap-propriate trade off between detail of analysis and costs to be incurred. In particular, input-output studies are very data demanding. Hence, data availability is most often the bottleneck in the study. To com-pensate for the heavy data requirements a number of restrictive assump-tions are necessary thus limiting.the validity of this approach. The standard assumptions include: no multiproduct industries, linear input functions, no external economies, neglect of capital formation and capa-city variations.^ 1 5.1.3 Income-Expenditure Analysis The income-expenditure model can be represented mathematically by some variation of the standard Y = C+I+G+E equation. One modified form of Keynesian analysis, the income/expenditure approach, has been tailored to economic impact studies. The model specifically measures the impact of a new or expanded activity on a regional economy. It was designed as an alternative to the economic base model discussed above. In contrast to the economic base model which uses an employment multi-plier, the income/expenditure approach uses an income multiplier. In one version of this model economic activity is conceptually 1 7 divided into direct, indirect and induced categories. Direct activity is taken to be that of the new enterprise or project. Indirect is that activity attributed to firms in the region that sell inputs to, or pur-61 chase outputs from, the new enterprise. Induced activity is that which is attributed to consumption spending generated by wages and salaries of direct and indirect employees. The income multiplier es-timates induced income given direct and indirect income generated to arrive at total regional income. The relationship of direct, indirect and induced activities is diagramatically represented in Figure 5.1. Regional income is increased by an amount greater than direct and indirect income because a portion of this income is spent locally and retained in the economy in the form of wages, salaries and profit. Likewise, a certain proportion of these wages, salaries and profits will be spent locally further increasing the regional income. The mag-nitude of this multiplier effect depends upon leakages in the economy which in turn depends upon the characteristics of the population as well as the structure of the economy. Leakage is the process by which income is lost from local eco-nomy. This can occur through savings, non-local expenditures or non-local taxation a l l of which take money out of local circulation. Income not lost from the economy through leakages is divided between local taxation and local consumption expenditures. Revenue of local government is par-t i a l l y retained as local income (wages and salaries and local expendi-tures on goods and services) and the remainder is lost from the economy through leakages i.e. local governments purchase supplies or services from outside the area. Local consumption expenditures are disposed of 62 FIGURE 5.1 THE IMPACT PROCESS Inputs (Imported) Inputs (locally supplied) 1 Mine Projects J Exported Production Direct Impact Labour Income!) Induced Impact .(Consumer Expenditure) Service Industry Employment 63 in a way peculiar to the individual tastes and preferences of the popu-lation. A certain proportion of income is spent on food, clothing, transportation and so on. This is known as the expenditure pattern. In each of the expenditures categories part of the income is lost through leakages, part is taxed by the local government and the remain-der stays in the local area in the form of wages and salaries. Successive rounds of expenditures are generated by the propor-tion of local consumption expenditures and local government expenditures that is captured locally. A relationship of this type is mathematically represented by the series k = l + r + r ^ + r ^ + . . . + r nor k = 1 (1 - r,) where k is the regional multiplier and r is the proportion of expendi-tures captured locally. Therefore, total income generated in a regional economy, Y^ ., equals k times the income generated by the new direct a c t i v i -ty, Y J c. To derive the value of k a number of assumptions must be made. A brief summary of these assumptions and the mathematical derivation of o the multiplier follows. ; First, i t is assumed that consumption, C, of local goods and ser-vices varies linearly with disposable income: C = c Q + c-jY (1 - t - t^) where: 64 c = constant o c-j = marginal propensity to consume locally-supplied commodities Y = income \ t = non-local taxes n t-j = local taxes i Secondly, i t is assumed that imports (M) by the local consumer goods industry and by local government is a function of the levels of local consumption, C, and local government spending, G. M = m C + m G where: c 9 m = marginal propensity to import of the local consumer goods c sector. irig = marginal propensity to import of local government Thirdly, i t is assumed that local government spending is func-tionally related to revenues raised: G = t-jY + tfaC + R where: t^ = business tax revenue as a proportion of total sales R = senior government transfers Fourthly, since R is p o l i t i c a l l y determined in B.C. to be ap-proximately $35 per person then: R = rP where: r = provincial grant per person 65 Lastly, population increase is assumed to be functionally related to income: P = PQ + p-jY where PQ is a constant, P, = marginal propensity for population to increase with local income Combining assumptions one through five, the local income mul-t i p l i e r can be stated as: k = 1 / 1 - c 1 1 + t b ( l - m ) - m c(l - t p - t ^ - ( t ] + r P l ) ( l -5.1.4 Evaluation of the Models Each of the three models discussed above has its limitations, both conceptually and practically. The economic base model, due to the degree of aggregation, provides a f a i r l y crude measure of impact on the non-basic sector. However, i t is attractive because the necessary data is readily available. Input-output would perhaps provide the most de-tailed analysis of the economy but the data requirements are costly and time consuming. The income-expenditure model is more detailed than ex-port-base but less so than input-output. Likewise, data requirements f a l l between the simple requirements of the export base model and the demanding input-output model. Time constraints and the expense of data collection effectively rule out input-output analysis for the purposes of this exercise. This effectively leaves a choice of economic base or income/expenditure as 66 the model upon which the economic impact analysis is to be based. The income/expenditure approach was favoured for three main reasons. Fi r s t l y , income is a more sensitive unit of measure than is employment. An impli-c i t assumption in the economic base approach is that a l l jobs are equiva-lent in their effects. This is clearly not the case - the average direct job may pay $18,000 while the average indirect only $12,000. Secondly, the degree of disaggregation permitted is much greater in the income/ex-penditure method. This allows greater detail in assigning induced im-pact to sectors of the local economy. Thirdly, the income/expenditure explicitly recognizes leakages. This is particularly relevant in a re-gion such as the Northeast where leakage is extremely high due to the small market size and poorly developed backward and forward linkages in the regional economy. We can now apply the income expenditure approach to the community of Chetwynd. 5.1.5 Parameters of the Income/Expenditure Approach Stated simply, the income/expenditure model can be represented by Y-. = k T c where Y_ is the total income generated in a regional eco-nomy, Y c is the income generated by the new direct activity and K is the multiplier. The multiplier can be derived as follows: K = 1 l-c(l+t b (1-mg) - m c ) ( l - t n - t 1 ) - ( l - m g ) ( r p l + t l ) The following discusses the parameters of the multiplier. If possible, the parameters are estimated for Chetwynd but i f data is un-67 available estimates are made on the basis of regional data or income group data. C,] - The marginal propensity to consume locally supplied commo- dities, is considered to be a residual component of the total consump-tion after personal savings, non-local expenditures and local and non-local taxation. Expressed as a proportion of local disposable income, C-| = 0.657. What this means is that for every additional dollar of in-come 66<£ will be spent locally. The value of s, t-j and t were obtained from Family Expenditure Pattern data of Statistics Canada. Non-local consumption was derived by estimating local and non-local proportions of current consumption patterns as given in the Family Expenditure Patterns. Business tax revenue as a proportion of total local sales, t^, is not applicable in this exercise as Chetwynd does not have a business tax at the present time. M , the marginal propensity to import of local government, -basically a measure of the level of village income exported outside the local area. It is estimated by examining the expenditure pattern of the Village of Chetwynd. The assumption is made that the magnitude of is approximated by the ratio of debt charges to total municipal expenditures, in this case equal to $48,706/$268,060 or 0.182. (Debt charges are ap-proximately 18% of the budget). 68 M , the marginal propensity to import of the local consumer  goods sector, must, in the absence of specific data, be estimated on the basis of the economic structure of the community. Davis estimated the value of the M_ to be 0.671 in Prince George, a cit y of 60,000.9 That i s , 67% of the goods consumed are imported by the service sector. Obviously the value in Chetwynd would be higher than this due to a lower level of integration of the economy. The value of M£ was therefore es-timated to be 0.70. Personal taxes comprise 0.136 of average family expenditure in B.C. urban areas of from 1,000 - 29,999 population. 1^ Local taxes are a small proportion of this since Chetwynd has a low mill rate. Of the total 0.136 an estimated 0.03 would be local taxes (t-j) and the remain-ing 0.106 would be non local taxation (t ). Based on a provincial per capita grant of $35,000 and a mar-ginal population/employment ratio of 2.7, rpl was estimated to equal 0.01. 5.2 Population Multiplier Methodology Converting employment to population estimates involves two c r i t i c a l assumptions, one involving female participation rate in the labour force and the other concerning average household size. At the present time in Chetwynd 31% of the employed labour force and 49.6% of the total population is female and the average household size is 4.I. 1 1 69 It may not be valid to assume that these ratios will remain constant i f major development takes place but newcomers to the community would ex-hibit characteristics similar to resource or primary towns in B.C., at least in the short run. For example, the direct employment has been traditionally male orientated. Unless specific policies effectively promote the hiring of females, that sector of the labour force will re-main male dominated. Typically inmigrants are younger and have a higher proportion of singles than the existing population. Therefore, i t is probably a closer approximation of reality to assume that the character-istics of the in-migrant population will be the same as those observed in B.C. resource communities. As a result the experience in other B.C. towns will be relied on. A model has been developed by Cornerstone Planning Group Limited to generate population estimates for the proposed new town at Tumbler Ridge, (see Figure 5.2). In a model such as this certain as-sumptions must be made and in this case assumptions are based on results from studies of similar B.C. resource towns. Sex distribution of direct employees is assumed to be 91% male and 9% female based on current em-ployment practises in similar projects in the Kootenays rather than de-sired or optimum hiring policies. Marital characteristics of direct employees are assumed to be the following: male: 37% single, 63% mar-ried; female: 4% separated, 19% single, 77% married and assumed to be married to direct or service sector employees. Family size character-ist i c s are assumed to be as follows: single male, 1.0, married (male 70 FIGURE 5.2 POPULATION MODEL Di rect Employees j Service Sector Employees Single 37% Married 63% peparated Single Single 4% 19% 37% Married 63% (Separated 4% Total Population Associated with Direct Employees Single 19% Total Population Associated with Service Sector Employees  Total Population Associated with Direct and Service Sector Employees Source: Cornerstone Planning Group Limited, 1977 71 or female), 3.8, separated female, 2.8 and single female 1.0. Females married to male employees are accounted for in the 3.8 persons per family assigned to married male employees. The sex distribution of service sector employees is assumed to be 60% male and 40% female. Marital characteristics and family size characteristics of service sector employees is assumed to be the same as those for direct employees. Population is expected to increase at a rate of 2% per year due to natural increase. This high rate of annual increase is justi f i e d by virtue of a younger than average population - hence the birth rate can be expected to be higher than average. 5.3 Community Impact Methodology Community impact assessment can be thought of as a subset of the broader f i e l d of social impact assessment. Social impact assess-ment (S.I.A.) is a procedure for anticipating the unintentional conse-12 quences of purposive social action. It is a means of reducing uncer-tainty in the planning process. Implicitly the intention is to fore-stall or mitigate adverse effects that may arise due to the project in question. Ideally, an applied technique such as social impact assess-ment should be firmly grounded in theoretical constructs. Unfortunately this is not the case. The f i e l d of S.I.A. is best characterized by its 72 practioners and what they study than by any distinct theoretical pers-13 pectives. In this respect S.I.A. methodology is at a comparable stage of development with economic impact assessment. The similarity ends here however. Whereas there appears to be research efforts in progress to develop methods firmly grounded in economic theory for iden-tify!' n and evaluating economic impacts this does not appear to be the case in the development of S.I.A. methodology. "In spite of the large and growing body of empirical research on social impacts, l i t t l e attention 14 has yet been given to its systematic theoretical development." Although there is a lack of established methodology and exper-tise with respect to S.I.A., this does not mean that conventional social research methodologies are not applicable. All of the following social science methodologies may appropriately enter S.I.A. at one or another stage: demographic analysis, community studies, causal models, social indicators, ethnomethodology, archival research, survey research, evaluative research, institutional analysis, value analysis, multivari-ate analysis, social network analysis, social forecasting, and matrix 15 methodologies. The art of designing a social impact study lies in coordinating these diverse methodologies in a manner that yields the desired result for a particular study. A review of the literature re-veals that many research efforts are directed towards a specific situ-16 ation or case sutdy, while others study S.I.A. methodology in the most general of terms. 1 7 The state of the art is that social impact assessment methodology has developed only to the point of determining 73 what questions to ask and which variables are significant. When the relevant variables have been determined techniques such as those listed above are applied to measure their magnitude i f appropriate. More often than not choice of variables and techniques of analysis are influenced by data availability or other resource constraints. Identification of the consequences of a social action is compli-cated by the complex nature of social interactions between the agents of change and those members of the society that are affected. The process is depicted in Figure 5.3 below. In this interactive model of social impact social factors are as much a cause of the impact as they are the effects. "Instead of assuming that the social effect is the re-sult of a specific cause or chain of causes. . . we think of an effect FIGURE 5.3 INTERACTIVE MODEL OF SOCIAL IMPACT HISTORY "(4) EXOGENOUS FACTORS PROJECT i IMPACT <2y -(6 ADAPTATION Source Wolf 1974 p. 11 74 as the outcome in the form of altered human conduct of the interaction between the agents of change and the people who have an interest in the "I o proposed public owrks project." In figure 5.4 the direct impact (1) is the i n i t i a l change in the identified variables. Step (2) is the i n i -19 20 ti a l response by the impacted units. Francis (1975), Olsen , and others have noted that this response is differential, that i s , refer-ent groups must be identified because what is beneficial to one group of people may be detrimental to another. This i n i t i a l reaction may even feedback to the project in the form of plan modification in re-sponse to public opposition. This possibility is represented by step (3). Furthermore, the "history" of the project as a prospective solution to pre-existing issues may influence both the project i t s e l f (4) and the i n i t i a l impact and adaptation (5). Lastly, the random or systematic actions of exogenous variables (6) complicate the pro-cess further in terms of estimating the impact of the project. A typical impact study proceeds in steps as outlined below. A profile of the referent region or community is prepared. This base-line for later comparison includes a description of all the salient variables. The level of detail of the profile will vary according to the specific needs of the study but the variables may be grouped into six general categories of impact: displacement and relocation, demogra-21 phic, institutional, economic, community cohesion, and l i f e s t y l e s . The identification of differential groups and the spatial dimensions of the profile are c r i t i c a l because what is beneficial to one group of 75 people may be detrimental to another group and often those who receive the benefits of an action may not be those who pay the costs. 2 2 FIGURE 5.4 IMPACT ASSESSMENT STEPS WITHOUT WITH IDENTIFY DESCRIBE PROFILE PROJECT PROJECT SIGNIFICANT AND EVALUATE PROJECTION PROJECTION IMPACTS DISPLAY Source Wolf 1974, p. 21. The next step is to project the variable performance into the future. The time frame will depend upon the specific requirements of the study but i t must be long enough to cover the time lag between the 23 imposition of costs and the realization of the benefits. This pro-jected end state of the system is compared to a second projection of the variables with the project included to yield an objective estimate of magnitude of impact. These results are interpreted for second-order consequences and may be evaluated in terms of policy goals and objec-tives . The art of projecting or forecasting is s t i l l in the early 24 stages of its development. The limitations of this technique must be recognized. Futures forecasting is based explicitly or implicitly on models which are subsets of reality. Certain factors or variables are assumed to represent the total system and a l l variation in the sys-tem is assumed to be explained by the interrelationships of these 76 variables. As a result, predictions are essentially estimations of future parameter performance based on past parameter development and 25 the present state-of-the-art of prediction. In reality at least a portion of the total change in the system will be due to variables ex-cluded from the analysis for the sake of simplicity and manageability. Profiles or predictions of the future are actually statements of probability. The degree of uncertainty increases with the distance into the future of the time period under consideration as well as with the number of variables the model is concerned with. Thus, a so called 26 "surprise free" future scenario such as Herman Kahn's "The Year 2000", has less than a 2% chance of being correct by the author's own admission. To illustrate this, suppose a system is represented by 20 key variables and each of these variables could be projected 10 years into the future with a probability of 0.8. The probability of the predicted end state 20 actually being correct would be 0.8 or approximately 0.012. As a concluding thought i t is useful to remember what the pur-pose of a forecast is in a planning context. Forecasting techniques are really only decision making aids. Of primary importance is the ability to differentiate between alternative courses of action. Planners design alternative futures which are feasible and then identify policy instru-ments which increase the probability of realization of desirable a l -ternative futures in terms of values, and decrease the probability of 27 undesirable futures. The extent to which an individual technique or combination of techniques satisfies this criterion is the extent to which i t is useful to planners. 77 5.4 Notes to Section 5.0 1. See for example: C. Davis, Assessing the Impact of a New Firm on a Small Scale Regional Economy; D.D. Detomasi:, The  Decentralization of a Population and/or Economic Activity; C. Garrison, The Impact of New Industry: An Application of  the Economic Base Multiplier to Small Rural Areas; W.G. Waters, Impact Studies and the Evaluation of Public Projects. 2. Aurom Bendavid, Regional Economic Analysis, p. 110. 3. Ibid. 4. C. David, An Interindustry Study of the Metropolitan Vancou- ver Economy, p. 1. 5. E.M. Hoover, An Introduction to Regional Economics, p. 223. 6. H.W. Richardson, Elements of Regional Economics, p. 142. 7. C. Davis, Assessing the Impact of a New Firm on a Small Scale  Regional Economy. 8. For the original discussion see Davis, op. c i t . 9. Davis, Ibid. 10. Statistics Canada, Family Expenditure Patterns. 11. Environment and Land Use Committee Secretariat, B.C. Towns  Study. 12. CP. Wolf, Social Impact Assessment: The State of the Art, p. 3. 13. Mark Shields, Grounded Theory Construction in Social Impact  Assessment, p. 64. 14. Ibid. 78 15. CP. Wolf, op. c i t . , p. 21. 16. For example: J. Palmer and M. St. Pierre, Monitoring  Socio-Economic Change; and, Mark Francis, Urban Impact  Assessment and Community Involvement. 17. Mark Francis, op. c i t . ; Marvin 01 sen and Donna Merwin, Toward a Methodology for Conducting Social Impact Assess- ment, Using Quality of Life Social Indicators; Mark Shields, Social Impact Studies, An Expository Analysis; CP. Wolf, op. c i t . 18. E.J. Baur, Assessing the Social Effects of Public Works  Projects, p. 3. 19. Mark Francis, op. c i t . 20. Marvin Olsen, op. c i t . 21. Mark Shields, Social Impact Studies, An Expository Analysis, p. 266. 22. Marvin Olsen, op. c i t . , p. 44. 23. Ibid. 24. Joseph Marti no, Technological Forecasting for Decision- Making, p. 125. 25. H.A. Langford, Technological Forecasting Methodology, p. 208. 26. Herman Kahn, The Year 2000. 27. Yehzekel Dror, A Third Look at Future Studies, p. 111. 79 6.0 ECONOMIC IMPACT The major economic implications of coal development on the communities of the Northeast of the province is outlined in this sec-tion. The economic indicators to be considered are employment, in-come, and by extension population. Employment and income are f i r s t discussed in general terms according to a conceptual breakdown or categorization into direct, indirect and induced activity. (See Table 6.0). A further distinction is made between the temporary construction phase and the operations phase. Following this five profiles covering the entire range of development possibilities are presented. Within each profile is included a discussion of the economic implications im-plied by that level of development. Lastly, the impact of each profile is summarized including a geographical distribution of the employment, income and population. 6.1 Employment and Income 6.1.1 Direct Impact The direct impact refers to the economic effects (i.e. employ-ment and income) on the local economy associated with or due to, the coal developments in question. In other words i t is simply the number of new jobs created in the development and the resulting wage b i l l . 80 The projected manpower build-ups for each development have been pre-sented above. This section looks at the direct effects of these developments. TABLE 6.0 DEFINITIONS, DIRECT, INDIRECT AND INDUCED IMPACT M- = E- + E L + E_ M_ = Total induced employment of new plants E- = Direct induced employment of new plants E^ = Indirect induced employment due to interindustry flows Ep = Indirect induced employment generated by the new plants through the final demand impact Definitions A. DIRECT ECONOMIC IMPACT: wage, salary and other income pay-ments made by the firms to their employees. B. INDIRECT ECONOMIC IMPACT: income payments made to local suppliers and industries who provide goods and services to the three firms or u t i l i z e goods and services from the three firms in their operations. C. INDUCED ECONOMIC IMPACT: increase in wages, salaries and other income payments of local business and commercial out-lets as a result of spending of incomes by the three study firms and the business indirectly tied to those three firms. Source M.H. Yeates and P.E. Lloyd, Impact of Industrial Incentives: Southern Georgian Bay Region Ontario Geographical Paper No. 44 Energy and Mines, (Ottawa, 1970). 81 The f i r s t step in determining the total direct income associ-ated with the various projects is to obtain a breakdown by category of workers and to assign average wage rates to these categories. Since the projects are proposals only, at the present, i t is necessary to examine existing coal operations in B.C. (i.e. Fording & Kaiser) and combine this with communications with company o f f i c i a l s to obtain aver-ages for the coal industry. Wage rates are estimated from union agree-ments and escalated according to Anti-Inflation Board Guidelines. To keep the analysis manageable, occupational categories will be limited to: supervisory and clerical (administrative), open-pit mining, un-derground mining, preparation plant and maintenance trades. To arrive at an occupational breakdown, various company estimates are summarized and on this basis a composite is derived which will be used in the study. Qunitette has projected the following breakdown at f u l l employ-ment^ supervisory and c l e r i c a l , 19.5%; mining, 47.9%, (open-pit, 24.9% and underground, 23%); preparation plant, 7.9%; and maintenance, 24.8%. 2 Kaiser Resources had the following breakdown in 1975: administration (supervisory and c l e r i c a l ) , 11%; mining (maintenance included), 70%; (mining employment included open-pit, 51% and underground 19%); prepara-tion, 19%. Employment by occupation at Fording Coal (1975) was as 3 follows: administration, 18%; mining, 68%; preparation, 14%. The Manpower Subcommittee gives the following breakdown based on various 4 collective agreements in the industry: administration, 20%; mining, 65%; preparation, 15%. 82 In summary, administrative or supervisory and clerical varied between 11 and 201, mining personnel (including maintenance) from 65 to 72.7% and preparation from 14 to 19%. Averaging of the above c l a s s i f i -cations yields figures of 17% administrative, 69% mining (including maintenance) and 14% preparation. If we assume 35% of mining manpower could be classified as maintenance personnel (based on data from Deni-son Mines) our final breakdown is as follows: Administrative 17% Mining 45% Maintenance 24% Preparation 14% Union wage rates for hourly workers ranged between $6.00 and $8.00/hour or between $12,500 and $16,500 annually in 1976. The overall average for the industry was $15,500 in 1975, From various union agree-ments i t can be seen that open-pit workers receive a higher rate than underground workers mainly due to the operation of heavy equipment. Maintenance workers f a l l between open-pit and underground rates as do rates for workers in the preparation plants. It is more d i f f i c u l t to arrive at an estimate for administrative staff as only a portion of these employees are unionized, and there is considerable variation within this category. All estimates of yearly earnings are in 1977 dollars. 83 CATEGORY OF WORKERS AVERAGE ANNUAL GROSS EARNINGS Administrative $19,000 Open-pit 18,800 Underground 15,500 Mining (average) 17,800 Preparation 18,000 Maintenance 18,500 Weighted average 18,200 Until other information is available the assumption will be made that W.C.T. employees will be paid at a rate comparable to under-ground coal miners. Earnings of construction workers were not derived from union rates because overtime and seasonal shutdowns can have an effect in such situations. An arbitrary assumption has been made that construction workers will average $18,000 per annum. A number of assumptions must be made in order to determine the direct impact of the construction phase. Most of the workers will be housed in construction camps. From a regional perspective the direct impact could be the same as the impact of an operational workforce ex-cept for the fact that the impact would be short term rather than long term in duration. The di f f i c u l t y arises in assessing the impact on the various communities. For example, even though i t is to be expected 84 that most employees will be housed in the camps, a certain number will probably choose to live in one of the existing communities. Any esti -mation of the proportion of workers residing in communities w i l l , to a certain extent, have to be arbitrary. Communication with o f f i c i a l s from Westcoast Transmission revealed that i t is their intention that al l construction workers be housed in camps to minimize disruptive im-pacts on communities in the region. However, experience with other major developments in B.C. suggests that approximately 15% of married workers would choose to live in town. Based on this experience the assumption is made that 10% of the construction work force will locate in existing communities. 6.1.2 Indirect Impact The indirect impact of a project is the impact due to the in-creased activity of firms in the region which sell inputs (goods or services required in the company's productive processes) or purchase outputs or products from the coal companies. In estimating the magni-tude of the indirect impact i t is important to distinguish between open pit and underground mines during both the construction and operation phases. Of course, in both open pit and underground developments the actual costs and input requirements will depend on site specific con-ditions. However, i t is s t i l l possible to discuss in general terms the type of equipment and supplies etc. that are required. Assumptions 85 can be made concerning the geographical distribution of the indirect impact by examining the capabilities of the various communities in the Region to supply the equipment and/or materials needed. There are five categories of potential indirect impact. These are: mine preparation, mine equipment, preparation f a c i l i t i e s , mine-site infrastructure and offsite infrastructure. The f i r s t four cate-gories can be attributed to the construction phase while the categories of offsite infrastructure and (to a lesser extent) mine equipment are applicable to the operations phase. The cost of pre-production or preparation activity varies mainly with mine size and stripping ratio in the case of open pit mines while most of the development work of an underground mine involves the driving of tunnels and therefore varies with the angle of the coal seams and other geological and structural conditions. These site specific condi-tions dictate the mining method (room and p i l l a r , hydraulic, longwall, shortwall or short/long wall). Cost of development varies significantly among these mining methods. Equipment needs during the construction phase include both de-velopmental needs and start-up needs. Start-up equipment is included in the construction phase rather than the operations phase because i t is a "one-shot" effort that precedes production. Equipment replacement however, is included in the operations phase. 86 Approximately 80% of the investment in mining equipment for an open pit operation is for shovels, loaders and trucks. 7 This involves waste trucks and shovesl in the preproduction stage and coal trucks and shovels for the operation phase. Equipment requirements for underground mines are more varied. They range from specialized d r i l l i n g equipment necessary in the pre-production phase to conveyors, loaders, feeders, coal cars and so on in the operations phase. Cost of specific requirements vary with seam thickness and other site conditions as well as level of production. Preparation f a c i l i t i e s basically include the wash plant, a coal dryer, storage f a c i l i t i e s and loading f a c i l i t i e s . Investment varies not only with the level of output but also depends on the specific qualities of the coal (i.e. the washability). Preparation f a c i l i t i e s would essentially be the same for open pit and underground operations. Minesite infrastructure includes the offices, warehouses, re-pairshops, power lines, etc. The type of input required here is the various construction materials such as metals, concrete, lumber, etc. Offsite infrastructure includes access road, spur lines and other com-munication links. Taking the local economy into account i t is likely that only a small amount of the capital expenditures of the mines would be captured locally. This is particularly true of heavy equipment which comprises 87 such a large proportion of a coal mines capital expenditures. It is doubtful that the N.E. region could capture much of this expenditure. Likewise for underground mines the d r i l l i n g equipment is too highly specialized to be supplied locally. Even replacement parts or d r i l l i n g bits, etc. would more likely be supplied from Edmonton or Vancouver than from Chetwynd or Dawson Creek. Indirect impact during the operations phase is derived mainly from equipment replacement and repair services, supplies and so on. B.C. Research, in a study done for Crowsnest Industries, listed the f o l -lowing commodities and services as those likely to be purchased locally Q by the mine in the Kootenay region, small vehicle and equipment pur-chases, (fuel, o i l , grease, ti r e s , etc.), steel fabrication, vehicle maintenance, vehicle and equipment rentals, office supplies and equip-ment rentals, and general trades and services (i.e. carpenters, painters, electricians, sand, gravel, topsoil, lumber, etc.). Given the circum-stances of the Northeast i t is assumed the same types of commodities and services as above will potentially be supplied locally. To this l i s t must be added the impact due to residential construction, govern-ment spending on land servicing institutional buildings and services, and commercial expansion. The key question is what proportion of total mine expenditures f a l l into the above categories. This information is d i f f i c u l t to ob-tain even for existing operations such as those in the Southeast of the 88 province. An accurate picture of the Northeast is more d i f f i c u l t be-cause we are dealing with a future situation and the mines generally have l i t t l e definite knowledge on their purchasing requirements or purchasing patterns. B.C. Research estimated indirect employment to 9 amount to 5% of the direct workforce. However, this is an arbitrary assumption and is not based on an analysis of the existing employment structure of the Southeast region. For our purposes we would prefer to estimate indirect employment on the basis of the expenditure patterns of the mining companies. Total sales would be converted to employment on the basis of observed ratio of sales volume to employment. However lack of information rules this approach out. The degree of uncertainty surrounding expenditure patterns is too great for the analysis to be carried out acceptably in this fashion. Instead, the approach will be to estimate an indirect employment multiplier on the basis of the capacity of the region to supply commodities and services required in the operation and construction phases. These have been estimated at 0.05 and 0.10 respectively. Although subject to the limitations dis-cussed above these estimates are the best available to the author. The corresponding income impact is estimated to average $16,000 per job based on average weekly wage data from Statistics Canada for various industry groups in B.C. 6.1.3 Induced Impact The induced impact may be defined as that impact due to econo-mic activity generated by the consumption spending from the income of 89 those directly and indirectly employed.IU The induced impact will be measured using the income expenditure approach. Inserting these values into the multiplier equation a value of 1.255 is reached for k. Conversion of the income multiplier to an employ-ment multiplier is accomplished by multiplying the direct and indirect wage b i l l by k, adjusting this to reflect profits, and dividing this figure by the average service sector wage. In this study the conversion yields an employment multiplier of 1.43. This compares with the observed economic base multiplier of 1.77 in Chetwynd.^ 6.1.4 Geographic Distribution of Impacts The distribution of benefits is a major concern. The question of how and where the benefits of coal development are to be distributed is d i f f i c u l t to answer precisely and requires a number of assumptions. For the most part Tumbler Ridge, Chetwynd and Hudson's Hope will be receiving the great majority of the benefits of direct impact as they would be the principal communities in terms of meeting housing requirements. Distribution of indirect benefits is primarily determined by purchasing patterns of the mines. This of course will be influenced by the existing economic structure of the region. Many of the inputs to the mines will not be available in the region. This is especially true of inputs during the operating phase which are largely comprised of specialized machinery. There is greater potential during the construction 90 phase although this phase is of limited duration. Heavy machinery will probably be mostly purchased through Vancouver or Edmonton. Smaller equipment and machinery may be supplied from regional distributors. Dawson Creek, of a l l Northeastern communities would be best able to capture some of these benefits. Only a limited portion of the indirect benefits will accrue to the lower order centres, Chetwynd and Hudson's Hope. These centres will be capable of supplying some inputs such as fuel, tires, repair service but these will not be of a great magnitude. Indirect benefits to the region appear to be limited because of the nature of the coal industry and its required inputs. Potential does exist however for the region to supply goods and service. If a greater proportion of the inputs to the mines could be handled regionally there would be substantial employment gains and possible diversification of the regional economy. To capture this potential requires explicit consideration by the Government and the coal companies. A policy of buying regional goods and services wherever possible would produce con-siderable regional benefit. The remaining category of impact, induced, will be distributed according to the geographical consumption patterns of the direct and indirect labour forces. Of a l l the categories of impact this perhaps is the one most d i f f i c u l t to deliberately influence. Small centres such as Chetwynd and Hudson's Hope do not provide the f u l l range and variety of selection of goods and services that workers desire. As a 91 result income will leak from the local area to the extent that people shop in other communities. A good portion of this consumption will accrue to Dawson Creek because of its well developed commercial ser-vice c e l l . A further portion will be captured outside the region in centres such as Grande Prairie, Prince George, Edmonton and Vancouver. 6.2 Development Profiles In order to effectively cover the entire range of development possibilities a scenarios approach is utilized. Five development pro-f i l e s are presented ranging from minimal development scenario to a max-imum development scenario. The choice of profiles was made to comple-ment development scenarios generated in the N.E. Coal Study. The pro-f i l e s are arranged roughly in order of their probability of occurence. It should be noted that this ranking is based on the considered judg-ment of the author as to the timing of the various developments. 6.2.1 Profile I - B.P., Sukunka, Bullmoose and Quintette, Babcock, Murray Profile I represents the scenario currently the focus of govern-ment policy. Profile 1 involves a high level of total output as both Sukunka and Quintette properties are assumed to reach f u l l production. With output at Sukunka reaching 3.0 million tonnes in 1985 and Quintette reaching 5.0 million tonnes in 1986, this profile assumes considerably 92 brighter market conditions than either profiles 2 or 3. Coal from Babcock/Murray is to be shipped by r a i l directly from the minesite to Anzac via the B.C.R. Coal from the Sukunka property i s , until 1982, to be shipped through the Sukunka Valley by truck to a temporary wash plant at Chetwynd. The operation shifts to a plant site in the Bullmoose Valley in 1983. Begining in 1983 port f a c i l i t i e s at Ridley Island near Prince Rupert are to be used. The W.C.T. gas plant and pipeline are in-cluded in this profile as outlines in Section 3.6.1. The development of Quintette Coal properties necessitates a new townsite, presumably at Tumbler Ridge. Workers on the Babcock and Murray sites will be temporarily housed in camps until the townsite is ready for occupancy, around 1982. The existence of Tumbler Ridge will affect the housing plans of B.P. Tumbler Ridge is closer to the opera-tions than is Chetwynd. B.P. will have an economic incentive in the form of reduced cost of commuting to promote the location of their em-ployees in Tumbler Ridge. It is assumed that once the temporary wash plant is removed and a permanent f a c i l i t y operational, the focus of their operations will shift from Chetwynd to Tumbler Ridge. In this analysis i t will be assumed that a l l employees hired up to 1982 will locate in Chetwynd and those hired from 1983 on will locate in Tumbler Ridge as from this time forward Sukunka coal is to be shiffed via r a i l in conjunction with Quintette coal. This mine alignment is known as the "east side" option. 93 Employment build-up proceeds rapidly in this profile. Non-construction employment rises from 183 in 1978 to 3,118 in 1982 and reaches a maximum of 4,347 in 1987. This results in a regional income increment of $69 million (1977 dollars) annually in wages and salaries. Population of the new town increases rapidly from an i n i t i a l 300 housed in a temporary camp in 1979 to over 6,000 in 1982 and about 8,000 in 1985. A maximum of approximately 16,500 is reached from 1987 and on-ward. Up until 1982 the impact on the Village of Chetwynd is the same as in other profiles in which a new town is not assumed. A permanent workforce of approximately 350 (including induced) is expected to locate there for a population increment in the order of 1,700. After this date population could f a l l off however, as some workers would undoubtedly choose Tumbler Ridge because of the shorter commuting distance. Since Chetwynd will f u l l f i l l a role as a sub-regional service centre the as-sumption is made that losses due to coal employees relocating in Tumbler Ridge will be approximately cancelled by service sector gains due to in-creased activity in the region. This should hold at least in the early stages of the new town's history. Construction impact is considerable in this profile. Some 5,510 man years throughout 1978 to 1985 injecting close to $100 million into the regional economy in direct wages. The peak year is 1980 when a workforce of 980 is required at the Sukunka and Quintette sites. Table 6.1 IMPACT SUMMARY, PROFILE 1; B.P. SUKUNKA/BULLMOOSE QUINTETTE BABCOCK/MURRAY 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 OUTPUT (Tonnes): B.P. 0.004 0.35 0.5 0.8 1.1 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Quintette 0.25 3.0 3.65 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 EMPLOYMENT: Construction 600 950 980 830 795 795 330 230 DIrect 50 210 373 1280 1984 2200 2440 2620 2800 2900 2900 2900 2900 ' 2900 2900 I n d i r e c t 1 • 63 106 117 147 179 190 155 154 140 145 145 145 145 145 145 Induced^ . 70 171 246 642 955 1052 1122 1195 1257 1302 1302 1302 1302 1302 1302 Total 783 1437 1716 2899 3913 3517 4047 4199 4197 4347 4347 . 4347 4347 4347 4347 INCOME: (000's)' Construction 01rect I n d i r e c t ^ Induced* Total 10800 17100 17640 14940 14310 14310 5940 4140 910 3822 6789 23296 36109 40040 44408 47684 50960. 52780 52780 52780 52780 52780 52780 1008 1696 1872 2352 2864 3040 2480 2464 2240 2320 2320 2320 2320 2320 2320 779 1879 2711 7057 10505 11573 12345 13146 13832 14326 14326 14326 14326 14326 14326 13497 24497 29012 47645 63788 68963 65173 67434 67032 69426 69426 69426 69426 69426 69426 POPULATION: Total Increment Chetwynd Tumbler Ridge 535 1339 1918 4950 7355 8101 8625 9182 9653 9998 9998 9998 2022 2516 2637 2637 3233 2888 2888 2888 2888 2888 2888 2888 2313 4122 5213 5737 6294 6765 7110 7110 7110 9998 9998 9998 2888 2888 2888 7110 7110 7110 1. the i n d i r e c t employment m u l t i p l i e r i s 0.05 as developed i n section 6.1.2. '5. 2. the induced employment m u l t i p l i e r i s derived by m u l t i p l y i n g induced m u l t i p l i e r (1.23) x the d i r e c t jobs and d i v i d i n g by the average wage of that s e c t o r ($11,000). 3. the i n d i r e c t m u l t i p l i e r of 0.05 1s developed i n s e c t i o n 6.1.3. 4. the induced income m u l t i p l i e r i s 1.23 as developed i n s e c t i o n 6.1.3 x t o t a l wages /average wage of that s e c t o r , approximately $16,000/year. 1) construction workers i n camps are excluded workers. 2) demographic assumptions: . sex: d i r e c t workforce these are 80% of a l l 91% male 9% female-service sector 60b male 40% female, m a r i t a l s t a t u s : d i r e c t workforce: male 37% s i n g l e 63% married - service sector 37% s i n g l e 63% married family s i z e ! s i n g l e male (1.0), married male or female (3.8), separated female (2.8), s i n g l e female (1.0). 95 6.2.2 Profile 2 - B.P. Sukunka, "West Side" Option In this profile partial development of Sukunka/Bullmoose is the only coal development that takes place. Production is limited to a max-imum of 2.0 million tonnes per year reached in 1984 and remains constant at this level until the year 2004. All coal is transported through the Sukunka Valley, originally by truck to temporary washing f a c i l i t i e s in Chetwynd and after 1983 to the permanent wash plant. Manpower build-up would remain the same as outlined in Section 3.1 above except that pro-duction remains at 2.0 million tonnes per year from 1984 onwards and direct employment reaches 920 in 1985 and remains at this level until the year 2004. In addition to B.P.'s coal development the W.C.T. gas plant is included in this profile. Operating employment is as described in Section 3.6.1. Profile 2 maintains maximum f l e x i b i l i t y . Compared to other op-tions the infrastructure requirements are slight, mainly r a i l and high-way improvements. Coal would be shipped by rai l to existing f a c i l i t i e s in North Vancouver (Neptune Terminals) and workers located in Chetwynd. This compares to the costly alternatives of building major new port f a c i l -ities at Ridley Island near Prince Rupert and a new townsite at Tumbler Ridge. However, i f , at a later date, the situation warrants i t , output can be increased to 3.0 million tonnes per year and the f a c i l i t i e s at Ridley Island and Tumbler Ridge used. This would likely be contingent 96 on at least one other major development such as Quintette taking place in order to justify the expense of the additional infrastructure. Chetwynd is the only community that is directly impacted in this profile. The assumption has been made that a new town will not be built unless Quintette's Babcock and Murray properties are exploited. Direct employment in this profile reaches a maximum of 970 in 1985 which includes 50 jobs at the gas scrubbing plant. Employment build-up begins in 1978 and peaks in 1985. Signi-ficant increases occur in 1978 (783 new jobs), 1982 (322 new jobs), and 1984 (242 new jobs). At the peak the distribution of jobs is as follows: direct sector, 970; support industries, 49; and the induced sector, 436. The resulting income increment to the regional economy reaches a maximum of around $27 million (1977 dollars) once peak employment is reached. Population generated by development totals 3,347 in this profile, a l l of which is expected to impact Chetwynd. This amounts to a population increase of over 230% during an eight year period. This is a growth rate of nearly 29% per year. Construction activity is a major impact component in the early years of profile I. The peak construction workforce is 600 in 1978 and this declines to 200 in 1984 and 0 in 1985. Altogether some 2,335 man years of employment are created in the region with an associated TABLE 6.2 IMPACT SUMMARY, PROFILE 2 EMPLOYMENT: Construction 01 r e c t I n d i r e c t ^ ' Induced <2> Total INCOME: (ooo's) Construction D i r e c t I n d i r e c t Induced Total POPULATION: Impact Chetwynd Increment Total (5) 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 600 475 230 230 300 300 200 50 210 290 290 450 550 790 970 970 970 970 970 970 980 970 63 58 38 38 53 58 60 49 49 49 49 49 49 49 49 70 132 149 149 226 271 371 436 436 436 436 436 436 436 436 783 875 707 707 1029 1179 1421 1455 1455 1455 1455 1455 1455 1455 1455 10800 8550 4140 4140 5400 5400 3600 910 3822 5278 5278 8190 10010 14378 17654 17654 17654 17654 17654 17654 17654 17654 1008 928 608 608 848 928 960 784 784 784 784 784 784 784 784 779 1457 1638 1638 2490 2984 4181 8635 8635 8635 8635 8635 8635 8635 8635 13497 14757 11664 11664 16928 19322 23119 27073 27073 27073 27073 27073 27073 27073 27073 535 1029 1150 1150 1746 2091 2854 3347 3347 3347 3347 3347 3347 3347 3347 2022 2516 2637 2637 3233 • 3578 4341 4834 4834 4834 4834 4834 4834 4834 4834 1. the i n d i r e c t employment m u l t i p l i e r 1s 0.05 as developed i n s e c t i o n 6.1.2. 5. 2. the induced employment m u l t i p l i e r i s de r i v e d by m u l t i p l y i n g induced m u l t i p l i e r (1.23) x the d i r e c t jobs and d i v i d i n g by the average wage of that s e c t o r ($11,000). 3. the i n d i r e c t m u l t i p l i e r of 0.05 i s developed i n s e c t i o n 6.1.3. 4. the induced income m u l t i p l i e r i s 1.23 as developed i n s e c t i o n 6.1.3 x t o t a l wages /average wage of that s e c t o r , approximately $16,000/year. 1) co n s t r u c t i o n workers i n camps are excluded: these are 80% of a l l workers. 2) demographic assumptions: . sex: d i r e c t workforce: 91% male 9% female-service sector 605 male 40% female. . m a r i t a l s t a t u s : d i r e c t workforce: male 37% s i n g l e 63% married - s e r v i c e s e c t o r 37% s i n g l e 63% married fam i l y s i z e ! s i n g l e male (1.0), married male or female separated female (2.8), s i n g l e female (1.0). 3.8), 98 wage b i l l of about $42 million (1977) in total. Most of the workers will be housed in camps located outside existing communities reducing disruptive influences on Chetwynd and other communities. 6.2.3 Profile 3 - B.P. Sukunka 2 This profile differs from Profile 2 only in that output in-creases to 3.0 million tonnes per year in 1985 and remains at this level until 2004, and port f a c i l i t i e s at Ridley Island are used beginn-ing in 1984 after production reaches a level of 2.0 million tonnes per year. Originally, coal is trucked to Chetwynd but beginning in 1984 i t will be shipped via r a i l spur directly from the minesite. There is some uncertainty, surrounding townsite location. The alternatives are major expansion of Chetwynd or a new town in the Sukunka Valley. On the one hand the commuting distance from Chetwynd approaches the maximum feasible limit but on the other hand i t is questionable i f a direct workforce of 1,100 ju s t i f i e s the expense of a new town. Profile 3 represents the maximum possible impact on the Village of Chetwynd assuming a new town is not built. Chetwynd could reach a total population of around 5400 by the year 1986. This population in-crement of over 280% would be f a i r l y evenly distributed throughout the period of 1978 to 1986 resulting in an annual growth rate close to 359. TABLE 6.3 IMPACT SUMMARY, PROFILE 3 EMPLOYMENT: Construction Di r e c t I n d i r e c t ' ^ Induced' 2' Total INCOME: (ooo's) Construction D1rect I n d i r e c t ' 3 ' Induced'*' Total POPULATION Increment Chetwynd (5) 600 50 63 70 783 475 210 58 132 875 1008 928 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 230 230 300 300 200 100 290 290 450 550 790 970 1150 1150 1150 1150 1150 1150 1150 38 38 53 58 60 59 58 58 58 58 58 58 58 149 149 226 271 371 444 517 517 517 517 517 517 517 707 707 1029 1179 1421 1493 1725 1725 1725 1725 1725 1725 1725 4140 4140 5400 5400 3600 1800 5278 5278 8190 10010 14378 17654 20930 20930 20930 20930 20930 20930 20930 608 608 848 928 960 944 928 928 928 928 928 928 928 1638 1938 2490 2984 4081 4882 5683 5683 5683 5683 5683 5683 5683 11664 11664 16928 19322 23119 25280 27541 27541 27541 27541 27541 27541 27541 1150 1150 1746 2091 2854 3411 3968 3968 3968 3968 3968 3968 3968 2637 2637 3233 3578 4341 4834 5455 5455 5455 5455 5455 5455 5455 1. the i n d i r e c t employment m u l t i p l i e r i s 0.05 as developed i n s e c t i o n 6.1.2. 2 the induced employment m u l t i p l i e r i s derived by m u l t i p l y i n g induced m u l t i p l i e r (1.23) x the d i r e c t jobs and d i v i d i n g by the average wage of that s e c t o r ($11,000). 3 the i n d i r e c t m u l t i p l i e r of 0.05 i s developed i n s e c t i o n 6.1.3. 4. the induced income m u l t i p l i e r i s 1.23 as developed i n s e c t i o n 6.1.3 x t o t /average wage of that s e c t o r , approximately $16,000/year. 5. 1) c o n s t r u c t i o n workers 1n camps are excluded: these are 80% of a l l workers. 2) demographic assumptions: sex: d i r e c t workforce: 91% male 9% female-service s e c t o r 60S male 40% female. ' 9 e s . m a r i t a l s t a t u s : d i r e c t workforce: male 37% s i n g l e 63% married - s e r v i c e s e c t o r 37% s i n g l e 63% married . fam i l y s i z e ! s i n g l e male (1.0), married male or female (3.8), separated female (2.8), s i n g l e female (1.0). TOO At the peak operating level, reached in 1986, there will be some 1,150 jobs created in the direct sector, 58 in support industries and 517 in the service sector. Total income generated could reach over $27 million annually (1977 dollars). Construction activity is also significant in profile 2 with a peak force of 600 in 1978 dropping to 100 in 1985 and 0 thereafter. Total man years of employment are estimated to be 2435 over this time period with an associated total average b i l l of $43.8 million in 1977 dollars. The assumption is made that only 10% of the workforce will choose to live outside construction camps thus minimizing this potential impact on Chetwynd. 6.2.4 Profile 4 - Quintette, Sukunka and Cinnabar Profile 4 differs from earlier profiles not only in the inclu-sion of Cinnabar but also in the timing of Quintette. Production from the Babcock/Murray property is delayed until 1985. The Production sche-dule for Sukunka is basically the same as in Profile 1 and 3 and the shipping pattern is the same as in Profile 1. The townsite needs will be met in Chetwynd, however, as the delay of the Quintette project will hold up construction on the townsite five years. Cinnabar comes on stream in 1984, in this profile, reaching f u l l production of 0.5 million tonnes in 1985. The f e a s i b i l i t y of this 101 development is at least partly contingent on the establishment of an agreement with B.P. for use of the Chetwynd wash plant in 1983, after B.P. establishes a permanent f a c i l i t y . Since Cinnabar is located be-tween the established centres of Hudson's Hope and Chetwynd, i t is as-sumed that 50% of the housing requirements will be met in each community. Employment buildup is f a i r l y regular throughout except for the period between 1983 to 1987. Buildup during this period is very rapid because both Cinnabar and Quintette start up during this time. Employ-ment peaks in 1988 at a level of 5,052 but levels off to 4,603 in 1992 and onwards. This carries an annual regional income increment of $73 million, almost half of which will accrue to Tumbler Ridge. As can be expected, the population generated by the develop-ments in this profile is significant. Regional growth is about 10,600 over the 15 year period under consideration. Chetwynd reaches a maxi-mum population of 5,700 in 1986 and remains at this level thereafter (not including natural growth). Hudson's Hope reaches a population of 2,000 in 1985 and Tumbler Ridge eventually attains a level of 6,000 in 1992. The construction activity involved in Profile 4 provides a f a i r l y steady short run boost to the area economy. A total of 5,860 man years of employment are created during the 13 year period from TABLE 6.4 IMPACT SUMMARY, PROFILE 4 EMPLOYMENT: Construction D i r e c t I n d i r e c t ' 1 ' Induced' 2' Total INCOME: (ooo's) Construction D i r e c t I n d i r e c t ' 3 ' Induced'*' Total POPULATION:'5' Chetwynd Tumbler Ridge Hudson's Hope 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 600 475 230 230 300 450 775 950 600 495 495 130 130 50 210 290 290 450 550 910 1233 2320 2864 2980 2980 2980 2980 3080 63 58 38 38 53 73 124 157 176 193 199 162 162 149 154 70 132 149 149 226 283 471 630 1090 1326 1378 1349 1349 1338 1369 783 875 707 707 1029 1355 2280 2970 4186 4878 5052 4621 4621 4467 4603 10800 8550 4140 4140 5400 8100 13950 17100 10800 8910 8910 2340 2340 910 3822 5278 5278 8190 10010 16562 22441 42224 52125 54236 54236 54236 54236 55440 1008 928 608 608 848 1168 1984 2512 2816 3088 3184 2592 2592 2384 "2464 779 1457 1638 1638 2490 3117 5185 6932 11991 14587 15161 14836 14836 14721 15055 13497 14757 11664 11664 16928 22395 37681 48985 67831 78806 81491 74004 74004 71341 72959 2022 2516 2637 2637 3233 3640 4581 5144 5765 5765 5765 5765 5765 5765 5765 3798 5608 6008 5771 5771 5686 5999 1381 1559 1629 1629 1629 1629 1629 1629 1629 1629 the i n d i r e c t employment m u l t i p l i e r i s 0.05 as developed i n s e c t i o n 6.1.2. 5. the induced employment m u l t i p l i e r i s derived by m u l t i p l y i n g induced m u l t i p l i e r (1.23) x the d i r e c t jobs and d i v i d i n g by the average wage of that s e c t o r ($11,000). the i n d i r e c t m u l t i p l i e r of 0.05 i s developed i n s e c t i o n 6.1.3. the induced income m u l t i p l i e r i s 1.23 as developed i n s e c t i o n 6.1.3 x t o t a l wages /average wage of that s e c t o r , approximately $16,000/year. 1) co n s t r u c t i o n workers i n camps are excluded: these are 80% of a l l workers. 2) demographic assumptions: . sex: d i r e c t workforce: 91% male 9% female-service s e c t o r 60t male 40% female. . m a r i t a l s t a t u s : d i r e c t workforce: male 37% s i n g l e 63% married - s e r v i c e s e c t o r 37% s i n g l e 63% married . f a m i l y s i z e ! s i n g l e male (1.0), married male or female (3.8), separated female (2.8), s i n g l e female (1.0). 103 1978 to 1990. A peak of 950 is reached in 1985 but the average is 450 per year. The income gain to the Northeast economy is slightly over $105 million in constant 1977 dollars. 6.2.5 Profile 5 - Full Development Profile 5 represents the maximum possible development scenario. It has been included to enable the determination of the greatest pos-sible economic impact on the Northeast region. Every development listed in Section 3 is included in the analysis. Most are assumed to proceed according to schedules described in Section 3 with the following excep-tions. Quintette is delayed 5 years (as in Profile 4) and Utah is de-layed 5 years as well. Profile 5 differs from Profile 4 in the addition of Teck, Utah and the sawmill. These three developments would impact Chetwynd, Hudson's Hope and Tumbler Ridge respectively with regard to housing requirements. Profile 5 is the only profile that has a significant im-pact on Hudson's Hope. The impact of Utah's Carbon Creek project will be f e l t there as will a portion of the Cinnabar impact. Total employment is considerably greater in this profile com-pared to the others. A level of 6,509 permanent jobs is reached in 1992 when Quintette reaches f u l l employment. Employment buildup is most rapid between the years 1982 and 1987 when i t increases from 1,536 to 6,800 an average of 1,053 new positions a year. Annual income from TABLE 6.5 IMPACT SUMMARY, PROFILE 5 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 PLOYMENT: Construction 600 475 230 230 450 658 1363 1586 2030 689 495 130 130 D i r e c t 50 210 290 290 450 670 1090 1613 2885 3993 4242 4242 4242 4242 4342 I n d i r e c t ' 1 ' 65 58 38 38 68 101 191 240 257 269 262 225 225 212 217 Induced'^) 70 132 149 149 238 . 351 599 852 1372 1849 1945 1915 1915 1905 1950 Total 783 875 707 707 1206 1788 3243 4291 6544 6800 6944 6512 6512 6359 6509 COME: (ooo's) Construction 10800 8550 4140 4140 8100 11844 24534 28548 17100 12402 8910 2340 2340 D i r e c t 910 3822 5278 5278 8190 12060 19838 29357 52507 72672 77204 77204 77204 77204 79024 I n d i r e c t ' 3 ' 1008 928 608 608 1088 1616 3056 3840 3824 4304 4192 3600 3600 3392 3472 Induced'*' 779 1457 1638 1638 2623 3864 6590 9374 15091 20336 21395 21070 21070 20955 21449 Total 13497 14757 11664 11664 20001 29384 54018 71119 88522 109714 111701 104214 104214 101551 103945 PULATION:'5' Increment 535 1029 1150 1150 1854 2751 4637 6587 10364 14214 14948 14709 14709 14626 14971 Chetwynd 2022 2516 2637 2637 3271 4079 5169 5764 5764 5764 5764 5764 5764 5764 5764 Tumbler Ridge 4304 7031 7388 7149 7149 7066 7611 Hudson's Hope 1424 1803 2580 3102 4225 4602 4602 4602 4602 4602 o 1. the I n d i r e c t employment m u l t i p l i e r 1s 0.05 as developed 1n s e c t i o n 6.1.2. 2. the Induced employment m u l t i p l i e r 1s derived by m u l t i p l y i n g induced m u l t i p l i e r (1.23) x the d i r e c t Jobs and d i v i d i n g by the average wage of that s e c t o r ($11,000). 3. the i n d i r e c t m u l t i p l i e r of 0.05 i s developed 1n s e c t i o n 6.1.3. 4. the induced income m u l t i p l i e r 1s 1.23 as developed 1n s e c t i o n 6.1.3 x t o t /average wage of that s e c t o r , approximately $16,000/year. 5. 1) con s t r u c t i o n workers 1n camps are excluded: these are 80% o f a l l workers. . 2) demographic assumptions: . sex: d i r e c t workforce: 91% male 9% female-service s e c t o r 6fjt male 40% female. . m a r i t a l s t a t u s : d i r e c t workforce: male.37% s i n g l e 63% married - s e r v i c e sector 37% s i n g l e 63% married . family s i z e : s i n g l e male (1.0), married male or female (3.8), separated female (2.8), s i n g l e female (1.0). 105 these projects peaks at $112 million (1977 dollars) in 1988 and remains constant at $104 million annually from 1992 onward. Population increases dramatically throughout this scenario. This profile represents the maximum possible impact on a l l the commu-nities under consideration. Chetwynd, which is impacted by Sukunka, W.C.T., Teck and Cinnabar, reaches a population of 6,200 by the year 1987 and remains at this level thereafter (excluding natural growth). Hudson's Hope is impacted by Cinnabar and Carbon Creek, reaching a population of 4,900 by 1983. The remaining developments, Quintette and the sawmill, impact Tumbler Ridge. The new town will reach a pop-ulation of about 6,500 in 1992. Construction is once again a f a i r l y steady impetus to the area economy. A workforce is maintained over a 13 year period with peak re-quirements being 1,586 in 1985. All told, some 8,166 man years are involved injecting a total of $150 million into the economy in the form of wages. 6.3 Summary of Development Profiles The impact of the coal developments on the Northeast region would be of a scale to affect the structure of the regional economy. Coal would be the new dynamic sector of the economy replacing forestry and gas and o i l . Other sectors, agriculture and tourism, simply do not have much potential in terms of providing employment or drawing investment capital. 106 Coal development could see considerable inmigration to the re-gion, up to 15,000 people in the case of f u l l development. This could alter the social characteristics of the Northeast region - migration tends to be selective. As well the coal industry demands a specialized, highly trained labour force. For example, there may be considerable in-migration from the Maritimes and Alberta in Canada and perhaps over-seas . The role and relationship of the communities in the region will undergo changes. Large scale development would see a relative decline in the importance of such centres as Dawson Creek and Fort St. John. These centres will not receive a direct impact from coal development. In the case of Fort St. John other resource developments will likely provide a continued impetus to growth. The economic base of Dawson Creek is primarily related to its role as a service centre for agricul-ture. Coal development will have an indirect impact on the City but in terms of magnitude i t is not likely to reverse the relative decline in importance of that community. Some of the major features of each of the five development profiles are summarized in Table.6.6. TABLE 6.6 SUMMARY OF PROFILES Peak Profile Developments Production Jobs Community Implications Sukunka & 1. Sukunka/Bullmoose 3 .0 mi 11 ion tonnes 1100 Moderate impact on Chetwynd, Quintette 2. Babcock/Murray 5 .0 million tonnes 1750 new town of Tumbler Ridge 3. W.C.T. 50 created. B.P. Sukunka 1. Sukunka/BulImoose 2 .0 million tonnes 920 Heavy impact on Chetwynd One 2. W.C.T. 50 (pop. of 4,750 in 1985) B.P. Sukunka 1. Sukunka/BulImoose 3 .0 mi 11 ion tonnes 1100 Heavy impact on Chetwynd Two 2. W.C.T. 50 (pop. of 5,400 in 1986) Quintette/ 1. Sukunka/Bullmoose 3 .0 mill ion tonnes 1100 Heavy impact on Chetwynd Sukunka/ 2. Babcock/Murray 5 .0 million tonnes 1750 (pop. of 5,700 in 1986), Cinnabar 3. Cinnabar 0 .5 million tonnes 180 small impact on Hudson's 4. W.C.T. 50 Hope, new town development delayed five years Full 1. Sukunka/Bullmoose 3 .0 mi 11i on tonnes 1100 Maximum impact on Chetwynd Development 2. Babcock/Murray 5 .0 million tonnes 1750 (pop. 6,000 in 1987), 3. Cinnabar 0 .5 mil 1 ion tonnes 180 Maximum impact on Hudson's 4. Carbon Creek 2 .3 million tonnes 862 Hope (pop. of 4,900 in 1983) 5. Teck 0 .5 million tonnes 180 Tumbler Ridge reaches 6,500 6. W.C.T. 50 in 1992. 7. Sawmi11 220 108 6.4 Notes to Section 6.0 1. Quintette Coal Ltd., A Study of the Socio-Economic Impact  of the Proposed Mine Development, p. 20. 2. Resource Sub-Committee on Northeast Coal Development, Coal  Resource Evaluation, p. 86. 3. Ibid, p. 87. 4. Manpower Sub-Committee on Northeast Coal Development, Report  of the B.C. Manpower Sub-Committee on N.E. Coal Development, p. 50. 5. Quintette Coal Ltd., op. c i t . p. 49. 6. Cornerstone Planning Group Ltd., Population Projections and  Social/Cultural/Income Characteristics for the Proposed New  Town at Tumbler Ridge, B.C. 7. Resource Sub-Committee on Northeast Coal Development, op. c i t . , p. 60. 8. B.C. Research, Stage 2 Environmental Study of the Line Creek  Project, Vol. I., pp. 0-12. 9. Ibid., pp. 9-12. 10. C. Davis, Assessing the Impact of a New Firm on a Small  Scale Regional Economy, p. 171. 11. Environment and Land Use Committee Secretariat, B.C. Towns  Study. 109 7.0 COMMUNITY IMPACT The impact of the proposed developments on the communities of Chetwynd and Hudson's Hope, the only two existing communities that will be directly impacted by coal development in the Northeast, will be exa-mined. Other communities, especially Dawson Creek, may be indirectly affected by large scale development. However measured in terms of pop-ulation increases and subsequent demands on community services the im-pact will be minimal. The fact that Dawson Creek has had no growth over the last 10 years means that there is excess capacity in most community services. The types of community impact we will be concerned with are ef-fects on employment, population, housing, physical and social services, and commercial/retail floorspace requirements. 7.1 Chetwynd Chetwynd of a l l communities in the Northeast faces the greatest degree of uncertainty with respect to coal development. No matter which development profile takes place the impact upon Chetwynd is great. It appears from our analysis that the impact on Chetwynd is of a magnitude at least as great as the existing population. The predicted population in 1982 is expected to be about 3,000 in a l l profiles. The population in 1986 ranges from less than 3,000 represented by profile 1 no to approximately 6,200 in profile 5. Therefore Chetwynd is relative to the other communities emphasized in this section. 7.1.1 Demographic Impact It is essential to start an analysis of community impact with an outline of the likely effects of development on the population of Chetwynd and its demographic characteristics because the other rele-vant impact areas are all estimated on the basis of population thres-holds, basis of per capita standards or, in the case of commercial floor space requirements, some measure of income increment. The population increment resulting from each of the development profiles is summarized in Figure 7.1. These estimates were derived f o l -lowing the methodology described in Section 5.2 above. For comparison purposes physical service thresholds are included in the graph. These services thresholds basically are the levels or limits beyond which major investments in services are necessary. The notion of thresholds is dealt with more completely below. As can be seen from the graph there is at least until 1982 an expectation of approximately 3,000 people. This appears to be a real-i s t i c 5 year horizon for current planning efforts. Beyond that date things get pretty uncertain. For that reason the discussions of im-pacts in this paper focus on demands in the year 1982. I l l FIGURE 7.1 POPULATION IMPLICATIONS OF DEVELOPMENT SCENARIOS (1977 - 1982) FOR THE VILLAGE OF CHETWYND Population in OOO's 7.5 7.Q (Profile 5: B.P./Quintette/Teck/Cinnibar) 6.5. 6.0 2nd Service Threshold / (Profile 4: B.P./Quintette/Cin 5.5. / / / (Prof i le 3: B.P. 3 MT / / / NO NEW TOWN) 5.0. / / J/ (Profile 2: 2 MT / / NO NEW TOWN) 4.5. 4.0. 3.5. 3.0_ 1st Service Threshold^C 2.5, / / (Profile One: B.P. Quintette New Town: 0.8 MT 1982 phase-out) 2.0. 1.5. / 1.0 1 _1 1 l_ -JL _ J .-j . .1.. i i „ . i 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 112 The population impact on the Village of Chetwynd beyond 1982 is significantly affected by the timing of the Quintette project. This development will not have a direct population impact on Chetwynd because of the physical distance separating the village and the coal properties. However, there is an indirect effect because the proposed new town is located between the B.P. properties and the Quintette properties. Tumbler Ridge is an attractive locational alternative to Chetwynd in terms of reduced commuting time and expense by virtue of being approxi-mately 25 kilometers closer to the Sukunka/Bullmoose properties. The long term would likely see B.P. join Quintette in operating out of the new community at Tumbler Ridge. B.P. has expressed i t s intended settlement policy. 1 Direct employees would be located in Chetwynd from 1978 - 1981 inclusive. After 1981 a l l employees would be located in Tumbler Ridge presumably including those previously located in Chetwynd. The resulting population impact on Chetwynd of the strategy could be very substantial. Figure 7.2 compares the short term population impact with the impact assuming Chetwynd to be the permanent location for the workforce. It is obvious from a super-f i c i a l examination, that the choice of alternatives by B.P., as well as the timing of their operations are crucial to the future of Chetwynd. The difference amounts to a 250% differential in the relatively short time period between 1978 and 1985. Furthermore, i f the short term op-tion involving a gradual phasing out of Chetwynd is chosen there will be an absolute decline in population of approximately 500 involving 113 some 205 housing units in 1982. This would be disruptive from a com-munity point of view. Community services in particular schools and commercial f a c i l i t i e s would be built in expectation of a higher popu-lation. Both public and private costs could therefore be incurred. The question of the potential magnitude of the population loss for Chetwynd is a crucial one. Various points of view can be expressed: . The company will by virtue of its operating procedures and housing policies encourage the 240 workers who will be operating out of Chetwynd to move to Tumbler Ridge. The implications for Chetwynd would be catastrophic. . The company may remain relatively neutral leaving the choice of residence location up to the worker. Housing subsidies would be provided regardless of location. Profile 1 of this paper is based on such an assumption - i t assumes that workers hired up to 1982 will remain in Chetwynd but after that will locate at Tumbler Ridge, this re-sults in a slight population loss for Chetwynd. The Cornerstone projection makes a similar assumption a l -though the retention rate is much lower - perhaps 18% of the total workforce would commute. Two other points that should be kept in mind in considering options are the following: 114 * FIGURE 7.2 B.P. PROJECTIONS OF CHETWYND POPULATION 6000 5000 I 4000 I 3000 » 2000 1000 I 1st service threshold B.P. LONG TERM / / / / / / / 2nd service thresh/ld / B.P. SHORT TERM ' ' 1 1 1 1 I i i i t 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 115 FIGURE 7.3 7.5 7.Q 6.5 6.Q 5.5 5.a 4.5. 4.a 3.5-3.0 2.5J 2.0 1.5. 1.0 POPULATION GROWTH AND D E C L I N E : CHETWYND ASSUMING 1981 PHASE-OUT OF CHETWYND AND PHASE-IN OF THE NEW TOWN 2nd service threshold 1st service threshold .B.C. RESEARCH (0 retention 1982) ROSS TAYLOR (100% retention those hired before 1981) ^CORNERSTONE f20% retention 1982) 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 116 FIGURE 7.4 POPULATION GROWTH: CHETWYND ASSUMING 1982 PHASE-OUT OF CHETWYND AND PHASE-IN OF THE NEW TOWN 7.5 7.0 6.5 6.0 5.5. 5.0-1 4.5. 4.0. 2nd Service Threshold Ross Taylor Cornerstone B.C. Research -J 1 I L 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 117 . the prevailing pattern in the region of remote commuting in both the forest products and the oil and gas industry . the expressed willingness according to the North-east coal employment survey of Northeast residents to move to the townsite. One other consideration deserves mention here. According to the projections of the Tumbler Ridge townsite planners the combination of a rapid build-up of production by both B.P. and Quintette will re-sult in a phenomenal growth rate for Tumbler Ridge. It would grow from approximately 1,200 in 1980 to 4,000 in 1981 to approximately 6,000 in 1982. This has a number of likely consequences for the de-velopment of the community: . l o g i s t i c a l l y , the provision of the necessary housing units will push the construction industry to its technical limits . the high rate of growth will increase costs because of competition for labour . the community will likely run large fiscal deficits . social consequences could be severe due to the large number of unacquainted people on the site and the problems of delivering services when needed I FIGURE 7.5 118 TUMBLER RIDGE TOWNSITE POPULATION PROJECTIONS 1979 - 1987 13 12 11 10 en T3 n3 CO O 3 O Q_ / / / Mm / /'••'• *y?yZyy+?+ To To tal Ne un 1 / Popu i ation MM I / H I P . / B¥ w H B P * vim* •v.-* •f / J H Inetu<^ /' im *# / mm? map' W m Direct w / New Ti Occup. )wn Re. incy Ii idy fo i 1981 Consti is le: "uctioi >s thai i Pop. i 1000 1979 1980 1981 1982 1983 1984 1985 1986 1987 119 There would appear as a result advantages to the Province, the two companies and the Village in adopting a planning approach which at-tempts to moderate the potential decline of Chetwynd by maintaining a slower population build-up at Tumbler Ridge. This could be done through a development agreement which provides for the retention of a contingent of B.P. workers in Chetwynd who would commute to the minesites either on a daily basis using bus and/or helicopter or on a rotation basis -seven days on seven days off. These workers could be gradually phased out of Chetwynd in line with a desirable growth rate at Tumbler Ridge. Company housing policy would appear to be the crucial element in whether such an approach would be feasible. 7.1.2 Housing Requirements A number of assumptions must be made regarding housing charac-teristics and demand. Many families have more than one income earner. Some single workers will double up in accommodation. Therefore, there is not a one to one relationship between employment and housing demand. For the purpose of this exercise the ratio has been estimated at 1.4. This figure does not reflect the existing situation but is f e l t to be representative of additional demand generated by coal development. There are presently 35 hectares of land within the Village of Chetwynd designated as residential. During preparation of a community 2 plan for Chetwynd, Stanley Associates surveyed the current housing mix. This survey is summarized in the following table. 120 TABLE 7.1 CURRENT HOUSING MIX, CHETWYND Housing Density and Type 1 Low Density Residential Single Family and Duplex 2 Medium Density Residential Four-plex and Townhouses 3 Apartment 4 Mobile Home Park Percentage of Total Housing Units 261 54 52 64 61 11 12 15 5 TOTAL 431 100 Source Chetwynd Survey and Analyses, Stanley & Associates Engineering In projecting housing requirements, however, i t is more appro-priate to base the estimate on the housing mix of a typical British Columbia mining community as this should more accurately reflect the characteristics of additional demand for housing. The current housing mix in the municipality of Sparwood, a coal mining town in Southern British Columbia, is summarized below: TABLE 7.2 CURRENT HOUSING MIX, SPARWOOD Single Detached 49.4% Single Attached (Duplexes) 17.6% Apartments 14.8% Mobile Homes 16.5% Others 1.7% Source Environment and Land Use Secretariat, 1976: b 121 Applying these standards to expected demand in 1982, (Profile 1) and 1986 (Profile 4), a range of housing and land requirements can be derived as follows: TABLE 7.3 HOUSING REQUIREMENTS, CHETWYND  1982 and 1986 Existing Additional Units Additional Units Housing Form Stockl Minimum Impact Maximum Impact 1982 1986 P = 1487 p = 3233 p = 5764 1. Single Detached 244 1892 6603 2. Single Attached 17 67 233 3. Apartments 52 57 194 4. Mobile Homes 64 63 207 5. Other 54 7 --6. Total Units 431 383 1294 Source 'Village of Chetwynd Survey and Analysis 1977, Stanley and Associates Engineering 2 Assumes 51% single family 3 Assumes 51% single family 122 TABLE 7.4 RESIDENTIAL LAND REQUIREMENTS IN ACRES, CHETWYND 1982 1986 (Minimum (Maximum Housing Type and Density Impact) Impact) 1. Single detached @ 5 units/acre 102 170 2. Single attached @ 6 units/acre 30 51 3. Apartments @ 15 units/acre 10 17 4. Mobile units @ 8 units/acre 21 36 5. Other @ 5 units/acre 3 6 6. Total acres 166 280 7.1.3 Physical Services Provision of the physical services, water, sewer, and roads, etc., represent the greatest expense to a municipality experiencing rapid growth. Although assistance is available from senior levels of government the share of capital outlay borne by the municipality can place a burden on that community's taxpayers. This is especially the case when servicing must take place well in advance of the materi-alization of the expected population increase. In this situation the borrowing capacity of the community may be insufficient to raise the required funds. The following sections look at the capacity of-com-munity services to accommodate growth. 123 The Water Supply The water system is described in the Chetwynd Community Plan as follows: "The original water system was installed in 1958 and consisted of a dam on Windrem Creek with gravity flow to the Fort St. John Lumber Co. (now Canfor), Pacific Great Eastern Railway (now B.C.R.), and the Chetwynd Hotel. Inadequate supply and low operating pressures prompted the waterworks d i s t r i c t to consider an alternate source of water. Eco-nomic considerations and limited water supplies ruled our groundwater ..3 sources. In 1968 the Pine River was chosen as the alternate raw water source, and new feeder mains were construction and incorporated into the old distribution system. A booster station was constructed shortly after to supply potable water and f i r e protection to the Hospital, R.C.M.P., and the B.C. Forest Service. The Village of Chetwynd is presently upgrading their water system under the contract t i t l e of "Chetwynd Water Improvements 1976" (i n i t i a l design population 3,000, final 6,000). Under this contract the Pine River Pumping Station will be upgraded by replacing the two existing Johnston pumps with two 10 H.P. Floway vertical turbines. These Floway, low head, pumps will have an individual capacity of 360 U.S.G.P.M. Also the 1976 Water Improvements will negate the use 4 of the Windrem Creek Pumping Station." 124 Water demands for future population levels can be predicted assuming average daily demand remains constant on a per capita basis. This was estimated to be approximately 100 Imperial gallons per day. The two raw water sources, the Pine River and Windrem Creek, are cur-rently licensed to supply 600,000 and 70,000 Imperial gallons per day respectively. This would be adequate for conditions under a l l of the development profiles although dangerously close to capacity in profiles 3, 4 and 5 by the year 1992. Water Treatment The Chetwynd Community Plan comments as follows: "The existing water treatment f a c i l i t i e s consist of gas chlorination and hypochlorina-tion in the Pine River and Windrem Creek pumping stations respectively. The new water program s t i l l provides for chlorination of water before pumping into the distribution system. From water analyses taken on the Pine River i t is evident that the phenol concentration from both supply systems is above that of acceptable limits established by the Canadian Water Standards. High phenol concentrations could adversely'effect the quality of the potable water. The new upgrading program will eliminate Windrem Creek as a source and therefore any further discussions on 5 water treatment in this section will be directed at the Pine River." Turbidity is the major problem during Spring run-off, creating undesirable conditions in the water supply system. Under the new up-grading program large open reservoirs are being utilized to store water 125 pumped from the Pine River during low turbidity periods. The stored water can then be utilized during times of high turbidity. The treatment system has a design population of 3,000 and with modification could serve 6,000 people. The system should easily handle growth until 1982 and could manage the maximum growth scenario with modification to the system. Sewage Treatment The sewage treatment system consists of an aerated lagoon f a c i l -ity with a polishing pond. The system consists of a three cell aerated lagoon system, a blower house and a chlorination chamber. The capacity and retention periods comply with British Columbia pollution control standards. The outfall was designed for a population of 3,000 at peak flows. The recently renovated system can easily accommodate the expected growth until 1981. Changes would be required i f the Village grew beyond 3,000 people as anticipated in profiles 2 to 5. Roads and Drainage Both the road and the storm drainage systems are currently in need of upgrading. Only 30% of the roads in Chetwynd are paved. The storm drainage system consists of ditches and culverts only. 126 7.1.4 Human Services The principal categories of social services we are concerned with are: Education, Health, Human Resources and Protective Services. In some cases the delivery agencies employ per capita standards or mini-mum acceptable levels of service but some of the agencies do not have any established standards due to the nature of the service they provide. Education Basic elementary and secondary school services as well as cer-tain specialized school services are delivered by the Peace River South School District, an elected body which secures i t s funding partly through Provincial operating and capital grants and partly through property taxes levied by District municipalities and the Regional District. Approximately 90% of approved capital costs are picked up by the Province and 10% is carried by local taxpayers. Approximately 60% of operating costs are picked up by the Province and 40% by local taxpayers. The two elementary schools in Chetwynd are currently over-crowded. The lower birth rates have kept school population in check. The Chetwynd area has according to the School Board had a history of lower educational expectations for its children which has kept crowding at the higher levels of the system down. 127 It appears that Chetwynd will need an additional elementary school of five classrooms in a K-6 format even i f the B.P. developments don't proceed as planned. TABLE 7.5 CHETWYND VICINITY EDUCATIONAL FACILITIES INVENTORY - 1976 School No. of Spare School Type Classrooms Capacity Enrollment Capacity Windrem K-5 8 195 233 --Don Titus K-5 8 225 218 7 Moberly Lake K-3 2 60 30 30 Chetwynd Elementary 6-7 7 210 184 26 Secondary 8-12 15 315 320 — TOTAL 40 1 ,005 985 20 Source Chetwynd Survey and Analysis, Stanley and Associates Engineering Standards for educational services are based on a student popu-lation rather than total population. The province-wide pupil:teacher ratio is approximately 20:1 at the present time. This figure includes al l teaching staff but not non-teaching staff such as clerical or main-tenance. Average class size for elementary and secondary schools is 30 pupils, and an average of 50 is the norm for kindergarten. Average en-rollment for schools is as follows: elementary, 330; junior, 750; junior-secondary, 1,000. 128 Facilities are already at capacity in Chetwynd but not c r i t i c -ally overcrowded. Development will mean the need for additional elemen-tary and secondary schoola. If minimal development takes place one new elementary school of approximately 300 students and 12 classrooms would be needed. Full development could mean an additional 1,000 elementary and 500 secondary pupils. In this case two elementary and one secondary school would be necessary as around 50 classrooms would be needed. A fu l l time staff of 75 would be required. Secondary Health Services Health service needs for both Chetwynd and Hudson's Hope are currently met in Chetwynd. Presently the 30 bed hospital is being utilized at 43% capacity. Based on the 43% occupancy rate and a service standard of 4.25 beds per 1,000 population a doubling of the service population would not affect hospital capacity. Only i f the higher growth scenarios were evident would there be a need for expansion. Other Health Services Other components of the health system tend to be affected in terms of additional professional and other staff requirements. For in-stance the average ratio of general practitioners per population is 1:2,200 throughout British Columbia. Therefore two or three additional G.P.'s must be attracted to Chetwynd or Hudson's Hope. Likewise two or three dentists would be needed i f development proceeds. One addition-al public health nurse would be required to maintain the current stand-129 ard of 1 per 4,000 population. All of the above positions have space requirements but i f some or most of them can be consolidated in one building, costs can be minimized. Human Resources Human Resources maintains an office in Chetwynd but not in Hudson's Hope. The Chetwynd office has one human resources officer. One more officer may be required to handle the increased caseload that would be associated with coal development. Protection In communities under 5,000 population one police officer is re-quired for every 750 people. All the requirements of the police force are looked after by the R.C.M.P. including salaries, building costs and vehicles. For this the province is billed a f l a t $35,000 per year per man. The Chetwynd Community Plan described the existing situation as follows: "Public protection and provincial and federal law enforce-ment is the responsibility of the Chetwynd Detachment of the RCMP. The present detachment consists of a staff ser-geant and five constables who are responsible for policing an area containing between 5,500 and 6,500 persons. The 130 power formulas and financial arrangements are set out in the standard Provincial-Federal Agreement. At present, the manpower standard followed is one constable per 750 population. Out of the total manpower allotment over the detachment area, the Village is responsible for generating 90 percent of police work. Out of this 90 percent, the greatest time is spent dealing with juvinile crimes such as break-ins, auto theft, and liquor offences. Reasons given by the police for the problems with juveniles range from lack of parental supervision to the school dropout problem. The dropout problem has been recognized in the community and an alternate school program is being operated out of the Chetwynd Secondary School. Future plans of the police include the establishment of a 2-man highway de-7 tachment." Provided that the existing situation remains relatively constant, i.e. the current problems above are not exacerbated then a manpower in-crease of 2 should be capable of handling growth up until 1982. Should the maximum profile occur a manpower increase of approximately 6 would not be out of line. The costs to the Province would be $70,000 and $210,000 respectively. Other Human Services In addition to the above categories of social services increased demand will be placed on the recreation, the judicial and library systems. 131 It is d i f f i c u l t to set standards for these services however, as the dif-ference between the minimum acceptable level and the desirable standard is so great. Summary The attached Table 7.6 summarizes the physical and social ser-vice thresholds for the key services. It can be seen that growth be-yond the 3,000 population level will involve considerable capital ex-pense. Key physical service components are designed for that level. With regard to the education system, any growth will require expansion. 7.1.5 Commercial Impact Commercial/Retai1 Floorspace Requirements Estimating demand for retail floorspace is done by a three step process. First, average proportion of personal income spent on retail trade items is estimated. Secondly, the proportion of this income spent locally in each retail sector is estimated. Lastly, this is translated into floorspace requirements by the appropriate figure for sales per gross area. From Statistics Canada family expenditure data the proportion of income spent on each of the relevant categories can be obtained. In 1969, the latest year for which these figures are available, the 132 TABLE 7.6 Component CHETWYND VILLAGE THRESHOLDS FOR SERVICES Threshold Populations Without Modification With Modification 1. Water Supply 2. Water Distribution and Transmission 3. Water Treatment 4. Pumping and Storage 5. Sanitary Sewage Treatment 6. Sanitary Sewage Collection 7. Hospital 8. Elementary School 9. Secondary School 3,000 6,000 3,000 3,000 6,000 3,000 3,000 3,000 at capacity at capacity 6,000 6,000 6,000 6,000 6,000 Source Stanley and Associates, 1977 133 breakdown is as follows: food, 0.18, general merchandise, 0.04, ap-parel, 0.07, hardware/furnishings, 0.05, automotive, 0.12, others, 0.03. The assignment of weights to each trade sector indicating what proportion of total sales are captured locally is done judgementally according to the nature of the goods involved and the structure of the local economy. Obviously, perishables and other lower order goods will be purchases locally more often than consumer durables and special-ity items. The weights assigned for the categories of retail trade in Chetwynd are: food, 0.70; general merchandise, 0.65; apparel, 0.35; hardware/furnishings, 0.50; automotive, 0.25; other, 0.50. The remaining step is to calculate floorspace requirements by multiplying income spent locally by a figure for annual sales per square meter of gross leasable area. The following sales per floor area figure are used: food group, $2,400 per sq. meter; general merchandise, $1,700 per sq. meter; apparel, $1,300 per sq. meter; hardware and home furnish-ings, $1,000 per sq. meter; automotive, $2,000 per sq. meter; and other establishments, $1 ,400 per sq. meter. When the above co-efficients are multiplied by income generated by development an estimate of additional floorspace requirements is generated. For example, i f $10 million is injected into the local economy the floorspace requirements for the food group would be $10 134 million x 0.18 {% of gross income spent on feed) x 0.70 (proportion captured locally) / 2,400 (sales per sq. meter) = 525 sq. meter. Using this model the additional floorspace requirements in Chetwynd are calculated for profiles 3 and 1, the situations of maxi-mum and minimum requirements respectively. The results are summarized in Table 7.7. TABLE 7.7 CHETWYND: COMMERCIAL FLOORSPACE REQUIREMENTS Gross Total Floorspace Category Maximum (sq.m) Minimum (sq.m) 1981 1986 Food 1,446 889 General Merchandise 421 259 Apparel 519 320 Hardware/Home Furnishings 689 425 Automotive 413 255 Other 295 181 Total Floorspace Requirements 3,783 2,329 Source Environment and Land Use Committee Secretariat, 1976 7.1.6 Summary It is possible that Chetwynd will experience rapid growth in the next 8 to 10 years. The settlement policies of the coal companies 135 will determine the extent to which Chetwynd is directly affected. A development agreement negotiated between B.P. Coal and the Province would cl a r i f y the situation and f a c i l i t a t e planning for future growth. Growth thresholds of 3,000 and 6,000 beyond which infrastruc-ture investment is required particularly in the water and sewer systems are evident for Chetwynd. Growth up to, but not beyond, 6,000 will be beneficial to Chetwynd. The commercial sector will be expanded and the range of services offered improved. Growth beyond 6,000 may or may not have net benefits depending on further costs of growth and who pays them. 7.2 Hudson's Hope Hudson's Hope is less likely than Chetwynd to be significantly impacted by N.E. coal developments. It is only when the marginal'develop-ments of Cinnabar and Carbon Creek are brought into the analysis that an impact is f e l t in Hudson's Hope. These possibilities are represented in Profile 4 (Cinnabar only) and Profile 5 (Cinnabar and Carbon Creek). Of these two possibilities only the latter has a large scale population implication, however, as total population reaches 4,900 in 1985 (see Table 7.4). The present housing mix in Hudson's Hope is 48% single detached, 2% single attached, 7% apartments and 43% mobile units. Applying the 136 FIGURE 7.6 POPULATION IMPACT, HUDSON'S HOPE Population in 000's 7.5 . 7.0 . 6.5 . 6.0 . 5.5 . (High Estimate) 5.0 . Profile 5 (Low Estimate Profile 4 1 i • • 1 1 1 i i i i i i i 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 137 same assumptions and standards as used for Chetwynd above, the pro-jected housing requirements for Hudson's Hope are as follows: TABLE 7.8 HOUSING REQUIREMENTS, HUDSON'S HOPE Housing Type Number of Units Land Requirements (acres) Single detached 517 103 Single attached (duplexes) 184 31 Apartments 155 10 Mobile Homes 173 22 Other 18 4 Total 1,047 170 Hudson's Hope is in good shape to handle moderate expansion in terms of land availability but significant improvements to the physical infrastructure are required i f a population increase on the scale im-plied by development at Carbon Creek is to take place. There is some slack in the system at present, mainly because the population of Hudson's Hope was formerly over 3,000 whereas'today i t is approximately 1,300. This drop in population happened after construction of the W.A.C. Bennett Dam was completed. A construction workforce numbering well over 1,000 at peak times is followed by a permanent or operating workforce of 150 - 200 based in Hudson's Hope. 138 Capacity of the water system is adequate for present purposes with a storage capacity of 100,000 gallons. This will not accommodate considerable population growth of the scale implied by the Carbon Creek development. For growth of this magnitude upgrading of the water sys-tem is necessary. Increased storage capacity to approximately 500,000 gallons would be required and an increase in the diameter of the lines would probably be necessary. In terms of social services, impact is significant but less than at Chetwynd. If only Cinnabar is developed (Profile 4) the im-pact on the educational system would be slight enough to be absorbed by the existing f a c i l i t i e s . However, i f Carbon Creek comes on stream nearly 1,000 additional pupils can be expected. This would require the addition of one elementary and one secondary school. Health ser-vices needs will be primarily met in Chetwynd, as has been discussed above. If Carbon Creek is developed, there will be a substantial im-pact on the service sector. The same type of analysis as was done for Chetwynd is applied to Hudson's Hope. The proportion of total sales captured locally was estimated as: food, 0.60; general merchandise, 0.55; apparel, 0.25; hardware/furnishings, 0.40; automotive, 0.25; and other 0.40. The other values of family expenditures and sales per floor area are assumed to be the same as those estimated for Chetwynd. 139 TABLE 7.9 HUDSON'S HOPE: COMMERCIAL FLOORSPACE REQUIREMENTS Category Gross Total Floorspace (sq. m.) Food 1,069 General Merchandise 306 Apparel 320 Hardware/Home Furnishings 474 Automotive 356 Other 204 Total Floorspace Requirements 2,729 7.3 Dawson Creek As stated earlier, Dawson Creek is not expected to be directly impacted by coal development. However, there may be some impact on the service sector, particularly in the government, medical and hotel/motel sectors. The retail sector may also be impacted to a certain extent. A new major shopping centre has recently opened so i t is not likely that further expansion in terms of floorspace will occur unless major development takes place in the coal sector. It does not appear that forestry and coal developments will directly affect Dawson Creek. The principal prospect for economic de-velopment on Dawson Creek remains to be its role as a regional service and supply centre. Most of the key government offices in the North-140 east region are located in Dawson Creek as well as the widest selection of commercial outlets. The alternatives to shopping in Dawson Creek for many types of goods are rather long trips to either Prince George or Grande Prairie. Dawson Creek should therefore benefit indirectly from coal development. 7.4 The Region Coal and forestry developments could have large scale impacts on the entire Northeast region, particularly in the area near Chetwynd. Major development would see the roles and relationships of communities within the region shift as Dawson Creek continues to decline relatively within the region and Tumbler Ridge emerges as a major new centre of development. Chetwynd seems likely to continue growing at least until 1982. Hudson's Hope will probably stabilize in the short run but may grow from 1981 onward. Other dynamic centres in the region such as Fort Nelson and Fort St. John will continue to grow being stimulated by the o i l and gas and forestry sectors. Based on this analysis of potential coal developments and the Northeast Report 75, the following regional population projections have been made. 141 65,000 FIGURE 7.7: POPULATION TRENDS AND PROJECTIONS PEACE RIVER: 1961-1986 60,000 55,000 J 50,000 45,000 J 40,000 J 35,000 30,000 25,000 20,000 Trend Line 2. Forestry development . . 3. Forestry development and Coal development 15,000 1961 1966 1971 1976 1981 1986 142 FIGURE 7.8 POPULATION CHANGE AND PROJECTIONS PEACE RIVER COMMUNITIES . actual change . trend line . forest development . coal and forest development 13,000 I , , , . . . , n 1 m l T I T i l I I I i i i l l III I I i 1 I i II I I I H I I II i I i ' ' I 1961 1966 1971 1976 1981 1986 1991 143 Notes to Section 7.0 1. B.P. Exploration Canada Ltd., Stage I Preliminary Impact Assessment. 2. Stanley Associates, Village of Chetwynd Survey and Analysis. 3. Ibid. 4. Ibid, p. 28. 5. Ibid. p. 30. 6. Environment and Land Use Committee Secretariat, B.C. Town's  Study. 7. Stanley Associates, Chetwynd Community Plan. 144 8.0 SUMMARY AND CONCLUSIONS Coal reserves in Northeastern British Columbia are very exten-sive and generally of a higher quality than reserves elsewhere in the province and other, competitive sources of coal including the United States and Australia. However, northeast coal is not readily accessible to markets and production costs are high due to complex geological for-mations and geographic isolation. Costly infrastructure investments are necessary to move large volumes of coal to export markets. Total investment in road, r a i l , townsite and. port f a c i l i t i e s may be as high as $2.0 b i l l i o n to meet the requirements of f u l l development. However, selective development of some properties on a smaller scale is feasible without major infra-structure investments. The combined annual production of a l l of the proposed projects totals 11.3 million tonnes per year at f u l l production. Of this total the largest single project is Quintette Coal with a proposed annual pro-duction of 5.0 million tonnes. Other large scale proposals include British Petroleum Limited, 3.0 million tonnes per year; and Utah Mines, 2.3 million tonnes per year. Even at the maximum proposed level of production reserves in the Peace River Coalfield are sufficient to sus-tain operations for at least 25 years. 145 8.1 Regional Impacts The potential impact of coal development is of a great magni-tude and would profoundly affect the economic, demographic and social structure of the region as well as impacting the physical environment. If a l l the potential developments were to take place, the f u l l develop-ment scenario, total direct employment would exceed 4,300 jobs. In-direct and induced employment given this level of direct employment is estimated to be over 2,100 jobs resulting in total employment, directly and indirectly attributable to coal development, or approximately 6,500 positions. This figure does not include the temporary impacts of the construction workforce in the pre-production phase of the operation. The population increase associated with this level of development is nearly 15,000 and the annual wage b i l l is upwards of $0.1 b i l l i o n . Other development profiles involve a smaller scale of develop-ment and hence total employment would not be as great. For example, the minimum development profile - development of Sukunka to 2.0 million tonnes per year - has a total employment impact estimated at 1,455. Al-though this does not really constitute a major impact when considered from a regional perspective, there will be significant local impacts, most notably in Chetwynd. The roles of the various communities in the regional settlement system will undergo change as a result of even minimum development. Particularly affected will be Chetwynd, Hudson's Hope and Dawson Creek. Dawson Creek may decline somewhat in its capacity as regional service centre. Chetwynd may gain somewhat in this capacity although i t 146 likely would be overshadowed by the new town of Tumbler Ridge, i f i t is built. 8.2 Community Impacts Coal development will have a large impact upon Chetwynd even i f i t is assumed that only a minimal level of output will be produced. An increase in the level of overall production does not proportionate increase the impact on the village. In fact, in certain circumstances an increase in coal exploitation may result in a reduced impact at Chetwynd. This apparent contradiction is explained by the effects of the proposed new town on employee distribution. Tumbler Ridge is closer to the Sukunka property than is Chetwynd. The attractiveness of a shorter daily commute is sure to improve the drawing power of Tumbler Ridge relative to Chetwynd, negating the positive attractions of an established community with available housing and a wider range of services, at least in the i n i t i a l stages of the new town's develop-ment. Based on a recent Coal Guidelines submission, i t appears that Sukunka will be developed f i r s t . 1 As a result Chetwynd will i n i t i a l l y absorb most of the impact but by 1982 will have become the secondary centre with respect to coal development. The option of developing Sukunka to an output level of 2.0 million tonnes per year using Chetwynd as a base has significant growth implications for Chetwynd. Population will increase from 2,000 in 1978 147 to 3,100 in 1982, 4,200 in 1984 and level at about 4,700 in 1985. Full development at Sukunka could result in an additional 180 direct jobs over and above that of the f i r s t option resulting in a stable popula-tion close to 5,400. Other development profiles could have an even greater impact populationwise with the exception of Profile 1. Due to the timing of Tumbler Ridge, the population of Chetwynd will decline slightly between 1982 and 1983 stabilizing at about 2,700. Stable population under the conditions projected in Profile 4 and 5 would be 5,700 and 6,200 respectively. The final stable population turns out to be of c r i t i c a l impor-tance to the Village of Chetwynd. In assessing the capacity to ac-commodate growth i t becomes clear there are distinct thresholds at 3,000 and 6,000 people beyond which considerable infrastructure in-vestment is required, particularly in the water and sewer systems. Most development possibilities would necessitate heavy investment and place a significant financial burden on Chetwynd. The threshold for schools is even lower as the system is presently at capacity. Other than the above infrastructure problems, Chetwynd is in a good position to accommodate growth up to 5,000 to 6,000. Most of the increase in demand for social services can be handled by staff additions only. That i s , the increase in demand is not on a scale that involves the passing of thresholds so that for example, new build-ings or other f a c i l i t i e s are required, with the exception of education 148 where two or three new schools would be required. Land availability for housing should not be a great problem with many i n f i l l areas and large blocks adjacent to present, development. Aside from the physical impacts of growth there could be a host of other less tangible impacts as a result of major coal develop-ment. The economic structure of Chetwynd will be radically altered. Presently the economic structure is reasonably diversified with the economic base being mainly the forest industry with other major em-ployers being the coal mine, B.C. Rail and the school d i s t r i c t . De-velopment of coal will change Chetwynd into a "single industry" town. Heavy population growth will change the character of the community. This could be resented by the established residents. Hudson's Hope is much less likely to be directly impacted by Northeast coal developments than is Chetwynd. Only under f u l l develop-ment conditions when the relatively marginal project of Carbon Creek comes into play is there a significant impact on Hudson's Hope. In these circumstances the population could reach upwards of 4,900 by 1986 from its present 1,300. 8.3 Factors Influencing Development The decision to develop the coal resources of the northeast is based on expectation of profit. This in turn is related to perception of the future market for coking coal, capital costs, and production and 149 marketing costs. Some of these factors cannot be influenced one way or the other but policy decisions will have a good deal of impact on some of the above factors in terms of pro f i t a b i l i t y of exploiting coal. The market for coal is almost totally beyond the control or in-fluence of the Province. Price is related to world steel output and is therefore dependent on world economic cycles because steel production tends to be indicative of general economic performance. This limits the scope and effectiveness of potential intervention measures. The Province can actively promote B.C. coal through trade missions, a process that is ongoing with regard to many of B.C.'s natural resources. The market can be monitored for signs of improvement so that a quick response is possible. Directly affecting the price or quantity demanded of coal i s , however, quite beyond the capabilities of the Province of British Columbia. There are other factors over which l i t t l e , i f any, influence can be exerted directly. Many of the production and capital costs are higher in northeast British Columbia because of the relative remoteness of the area and the complex geological formations in which the coal is found. The problems encountered mining coal out of the s p l i t seams found in the Peace River Coalfield are of a technical nature and hence there can be no planning solutions. Factors related to remoteness can be compensated for to a certain degree through government action how-ever. 150 There are at least three facets of remoteness that have a bear-ing on the final cost of delivered coal. First, remoteness increases the cost of transporting the product to market. Second, remoteness will increase the operating costs of the project. Third, the capital costs likewise are increased by remoteness. All of the above factors detract from the competitive position of northeast coal on world markets by in-creasing its cost and reducing the profit margin. There being no local market for northeast coal, the relative remoteness of the areas adds considerably to the costs of delivering the product to market. Spatial remoteness can be offset to a certain degree by investment in transportation f a c i l i t i e s but this entails huge capital requirements. Required transportation f a c i l i t i e s include road access to the mines, branchline r a i l access routes into the coalfields, and port f a c i l i t i e s at Ridley Island. In addition, some improvement on the existing CNR line from Prince George to Prince Rupert are necessary. These investments would require a substantial portion of total capital invested within British Columbia during this period. Operating costs tend to be higher for resource developments in the hinterland mainly due to higher labour costs. Although wage rates tend to be the same as in southern B.C. indirect costs are higher. Com-pensation may be necessary in the forms of transportation allowances, housing subsidies, recreation f a c i l i t i e s , and others. In such situations labour turnover is invariably high because of remoteness and the higher 151 cost of livin g . The cost of labour turnover can become a substantial proportion of total operating cost because of the considerable expense of training employees. Capital costs of northeast coal development may tend to be higher because of three related factors. The f i r s t factor, development, or pre-production, costs, will probably be higher owning to greater ex-pense of transporting men and equipment to the minesite. Road and rail' connections must be built for access to the minesite. A larger inventory of working capital may be required as com-pared with operations closer to major supply centres such as Vancouver or Edmonton. Larger stocks of process supplies, replacement parts, fuel and so on must be held at the minesite because the local economy simply will not be able to supply these needs. As a result, total investment per unit of productive capacity is higher than in comparable operations with better access to such needs. Finally, investment may be necessary in certain f a c i l i t i e s that, in other locations, would possibly have been provided by other agencies. It is d i f f i c u l t to attract entrepreneurs in the commercial sectors of food, shelter, clothing, recreation and others. As a result, there is a tendency for social overhead capital investment to lag behind invest-ment in directly productive activity. The company often finds i t neces-sary to undertake most or a l l of this investment i t s e l f . 152 8.4 Options for the Region This section proposes to consider which groups or institutions will benefit from coal development and also to outline some of the op-tions for the region i f maximum community benefits are to be realized. Five main "actors" have been identified as being central to the impacts of coal development. These are: the Federal Government; the Provincial Government; the respective mining companies; the people of the affected communities of the northeast; and the people of the northeast region as a whole. The implications for these actors will be considered for each of four types of development options. These are: to postpone develop-ment temporarily or indefinitely; development on a small scale; develop-ment on a large scale but with no government investment; and, develop-ment on a large scale with government investment. The four options will be examined in turn below. 8.4.1 Delayed Development In the absence of coal development i t can be expected that trends in the region will remain pretty much as they are at the present time. Projecting these trends into the future, one can expect regional popu-lation to increase slightly although individual communities such as 153 Fort St. John will likely experience more rapid growth and others such as Dawson Creek may decline slightly or remain stable. Major sectors of the economy besides coal such as agriculture and tourism do not have a great deal of potential for employment creation. Likewise, forestry does not hold much potential for expansion without the infrastructure that would accompany coal development. Once in place this infrastructure would have a beneficial side effect of improving the accessibility of forestry products in the region. This raises the possibility that selec-tive outmigration could occur as young adults entering the labour force find i t d i f f i c u l t to secure employment in the region. Females may be particularly affected because the employment structure is male oriented, there being an emphasis on the primary sectors and a poorly developed service sector. Certain communities would be drastically affected by coal de-velopment while others would receive only tin direct impacts or spinoffs. Chetwynd will likely experience moderate growth in the absence of coal development. Independent projects such as the gas scrubbing plant and the possibility of a new sawmill or expansion of an existing one should assure this. Similarly, Fort St. John will in a l l probability experience considerable growth regardless of whether or not coal development pro-ceeds because of gas projects that are not affected by coal decisions. Hudson's Hope and Dawson Creek have both been declining in pop-ulation in recent years. There are signs that population may have sta-154 bilized f i n a l l y however, Neither of these communities have much case to expect significant population increase unless coal development proceeds. The economic base of Hudson's Hope is tied to the operation of power f a c i l i t i e s at the W.A.C. Bennett Dam. The operating phase of the Site One Dam will only generate an additional 15 to 20 jobs. Employment ex-pansion in Dawson Creek is related to its role as regional supply and service centre in the absence of any significant economic development potential in the city i t s e l f . With no development occurring the other central actors - the federal and provincial governments and the mining companies - are not really affected except to the extent of their investments in exploration, fe a s i b i l i t y studies and so on.. None of the above actors are really im-pacted by this possibility of delayed development, at least at the pre-sent time. Hence no one really benefits. On the other hand, no party is adversely affected either. Perhaps most regretable is that the un-employed of the region will not gain the opportunity to enter the mining workforce. Even this is not a clearly demonstratable since the unem-ployed do not necessarily have the s k i l l s required in mining operations. It remains to be seen what proportion of workers would originate from outside the region or province. 8.4.2 Small Scale Development By small scale development is meant one or two million tonnes a year in total. This would correspond to Scenario 2, development of 155 Sukunka to an output of two million tonnes per year. The Sukunka f i e l d is the only one that could be economically feasible at such a low rate of extraction. Other fields require larger infrastructure investments and hence are only feasible given higher levels of output. The regional implications of small scale development are not that great but there are significant implications for the Village of Chetwynd. The employment and population related impacts have been out-lined above. The significance is that Chetwynd would undergo f a i r l y rapid growth and this carries both positive and negative implications. Positive impacts would include threshold related aspects such as better recreational f a c i l i t i e s , increased selection of commercial goods, a di-versified economic base and so on. Negative implications might include such phenomena as inflated housing and other costs, social disruption due to heavy inmigration, a "boom and bust" situation associated with the construction phase of the operation and displacement of local busi-ness ventures by larger, potentially more efficient, operators from outside the region. The economic implications of small scale coal development are not particularly significant from the point of view of the Federal Government. This is not to say that there will be no impact, but that in comparison with total federal expenditures these impacts are rela-tively insignificant. There are a number of ramifications for the Province of B.C., however. Although direct investment in transportation 156 and townsite infrastructure is not required, the Province is directly or indirectly responsible for a number of social services that will have heavy demands placed upon them. Additionally, the Province is committed through various cost sharing schemes to pick up a proportion of costs associated with expansion and improvements to physical ser-vices such as roads, water, sewer and others. This will be more or less offset by income from royalties and other taxes paid by the mining companies and its employees. All royalties accrue to Victoria while tax revenue goes to both Victoria and Ottawa. Given the assumption that a profit seeking mining company would not choose to develop even at a modest scale unless a reasonable profit could be anticipated, i t would appear that the mining company and Ottawa would be clear cut benefactors under conditions of small scale develop-ment. The mining company because they expect to show a profit, and Ottawa because they will receive some revenue yet will not be respon-sible for any of the expenses. Evaluating the position of Chetwynd and the Province is more complicated because there are both positive and negative factors. Some of these factors are not readily quantifiable and others are value judge-ments. For example, some residents consider population growth per se as a good thing and others consider i t bad. Certain of the expenses of pop-ulation growth can be quantified - social and physical servicing for 157 example - but i t is impossible to determine or evaluate the effects of a change in character of a community on its residents. To keep this ques-tion in its proper perspective i t must be remembered that we are talking of an order of magnitude of change that is not overwhelming in this in-stance. Therefore, social disruption will not be as pronounced as under conditions of f u l l development. Hence, in the writer's opinion, there are marginal benefits to both the Province and the Village of Chetwynd. 8.4.3 Large Scale Development with No Government Investment Large scale development will have massive impacts on a l l five actors, even i f governments do not take an equity position or provide some or a l l of the necessary infrastructure. Even at the regional level the economic structure will be altered and the impact for indi-vidual communities can be enormous. A new town would be created that would be the second largest community in the northeast. This could result in a redefinition of community roles within the region. Com-munities such as Chetwynd and Hudson's Hope could more than double in size in a very short time period. A situation could be created whereby established residents become alienated from the new local leadership thus losing control over the public decision-making process. Even though the assumption is made that there is no direct government involvement, both governments will be affected by coal development of this scale. The federal government will be affected 158 in terms of a favourable.impact on the international balance of payments and the receipt of substantial tax revenues. The provincial government will also be in receipt of revenues from royalties and other taxes but the effects on the province go much deeper than that. Assuming there is no government intervention in other aspects of development such as hiring policies there will undoubtedly be heavy mi-gration into the region. Even though the pool of unemployed labour pre-sently in B.C. is greater than the numerical requirements of even f u l l development there is a structural mismatch in terms of labour force s k i l l s and the requirements of open pit and underground mining. Despite the fact that costs associated with labour force turnover are a major component of operating costs, i t is unlikely that a private firm would operate a manpower training program. Even i f they would, there would not be the same emphasis on training B.C. residents that a provincially run training program would have. Furthermore, an employment survey of the northeast indicated that of the unemployed about half were willing to work in open pit operations but less than 2% were willing to work 2 underground. Unfortunately a large proportion of workforce require-ments are underground, and this proportion increases over time. There-fore, i t is almost certain there will be an inflow of labour from areas where a skilled labour pool exists. Also, with such a large project as northeast coal, there will be an influx of unskilled transients attracted by the myth of high wages in the north. However, there are no high paying jobs for unskilled workers in this region. In fact, wages are lower in the northeast than the provincial average. 159 Once again the assumption is made that there are net positive benefits for the private mining companies, otherwise they would chooose not to go ahead with development until conditions were perceived as facourable. Given the great cost of the infrastructure requirements to move the coal to export markets this is a distinct possibility at current market prices for coking coal. In the future, i f prices rise, conditions may seem more favourable. 8.4.4 Large Scale Development with Government Investment Even though tonnage of coal extracted, total revenue, employment, income, and population impact could be the same as is the case with no government intervention, the effects on the actors can be quite different. The most fundamental difference is related to the profitability of the various projects. With total investment into the billions of dollars for f u l l development, private companies may be unable or unwilling to raise the investment capital. Therefore, i t is possible that the final decision whether or not to develop is contingent upon working out an in-vestment sharing formula between the two governments, the mining com-panies and other entities such as the railroad. At least this would tend to be the case under marginal conditions of profi t a b i l i t y . With government involvement in the entire process beginning with the planning stages control can be exercised over coal development for the benefit of the public in general and the communities of the northeast in particular. For example, by retaining a measure of con-160 trol over transportation infrastructure a multi-resource development plan can be implemented. Expansion of the forestry industry is more or less depending on the transportation infrastructure of the coal oper-ations because forestry alone would not justify the expense. Similarly, a single multi-purpose townsite can be planned. Such a new town would be more diversified economically and generally more viable socially than would be a number of smaller hew towns, one for each project. Another significant benefit of government intervention involves manpower policies. A coordinated manpower training program could reduce the need for importing labour from outside B.C. and Canada. If north-east coal development does not result in employment for people of the region and the province, the desirability of government investment of many millions of dollars comes into question. Employment opportunity is the single most important benefit for many of the residents of the northeast. There is also increased social disruption the greater is inmigration to the area, especially i f the migrants are from a differ-ent culture which might be the only alternative as the number of skilled miners in Canada is far below the labour force requirements of northeast coal development. In sum, the question of government involvement in coal develop-ment boils down to a tradeoff between the expense of investment and the degree of control that may be gained through involvement. Whether this additional control over timing, hiring policy, townsite development, transportation decisions, and other aspects ju s t i f i e s the expense is a political consideration. 161 8.5 Concluding Comments A summary of some of the implications of the four types of de-velopment possibilities is presented in Table 8.1 below. It should be emphasized that these four development possibilities do not replace the five development scenarios generated in Section 6.2. Instead, they represent a more general classification based on public involvement in the process. One conclusion to be drawn from Table 8.1 is that the alterna-tive that is most capable of accommodating change and otherwise planning for coal development is large scale development with government inter-vention. This is particularly true i f a local or regional perspective is adopted. If maximum benefits from development are to be captured in the northeast region then coordinated resource planning is essential. The Province is best equipped to undertake such a task. Policies and programs from many diverse sectors such as manpower, transportation, townsite development, human resources, education, environment and many others must be coordinated. Clearly, the private sector does not have the necessary broad perspective to accomplish such an undertaking. Northeast coal potentially may benefit the affected communities, the Peace River - Liard Region and the Province of British Columbia as well as Ottawa and the private sector. However, this is contingent upon a competent planning process that can balance social, economic and poli-162 TABLE 8.1 SUMMARY OF DEVELOPMENT IMPLICATIONS ACTOR DELAY DEVELOPMENT SMALL SCALE DEVELOPMENT LARGE SCALE, NO GOVERNMENT INVESTMENT LARGE SCALE, WITFT GOVERNMENT INVESTMENT FEDERAL No impact GOVERNMENT PROVINCIAL No impact COMMUNITIES Existing trends REGION Existing trends Marginal impact Marginal impact Direct im-pact on Chetwynd Marginal impact Impact On balance of payments Revenue inflow Uncertain, de-pends on set-tlement policy of private sector Heavy inmigra-tion of workers Investment f a c i l i t i e s in port Transportation and community infrastruc-ture investments, planning ini t i a t i v e Planning may reduce uncertainty and social disruption More benefits to remain in region PRIVATE No impact Profit for Assumes plann-SECTOR B.P. Sukunka ing function Not responsible for planning tical concerns. Certainly the background studies have documented most questions relating to environmental sensitivities, efficiency c r i t e r i a and many social concerns. Out of this has evolved policy related to coal development in the Northeast. Therefore, i f and when conditions appear favourable for development everything will be in place and de-velopment may proceed without lengthy delays. 163 One possible shortcoming in this process may be the institu-tional framework for planning. There is no one agency that is respon-sible for the planning function. Instead what could be called a refer-ral approach is utilized whereby line agencies, each responsible for delivery of a particular service or function, are kept in touch with each other. Perhaps i t would be well advised to develop an institu-tional arrangement specifically with this end in mind. This end how-ever, could well stand on its own as the focus of a separate study. Given the possibility that coal development may not take place for a number of years, i t could prove to be a worthwhile effort. An ef-ficient planning agency could reduce many of the unnecessary delays that are so costly to the developer yet do not necessarily benefit any other entity. 8.6 Notes to Section 8.0 1. B.P. Exploration Canada Ltd., Stage I Preliminary Impact  Assessment. 2. Cornerstone Planning Group, Northeast Coal Employment  Survey, p. 42. 164 BIBLIOGRAPHY Baur, E.J. Assessing the Social Effects of Public Works Projects. Fort Bel voir, Va.: Research Paper No. 3, U.S. Army Corps of Engineers, 1973. Bendavid, Aurom. Regional Economic Analysis'. New York: Praeger Publishers, 1974. B.C. Research. Stage 2 Environmental Study of the Line Creek Project, Vol. I. Vancouver: B.C. Research, 1977. B.P. Exploration Canada Ltd. Prospectus for Sukunka/Bullmoose Property. Unpublished paper, 1977. . Stage I Preliminary Impact Assessment. British Petroleum Canada Ltd., 1977. Cornerstone Planning Group Ltd. Northeast Coal Employment Survey. Vancouver: Cornerstone Planning Group Ltd., 1977. . Population Projections and Social/Cultural/Income Character- ist i c s for the Proposed New Town at Tumbler Ridge, B.C. Unpublished paper, 1977. Davis, C. "Assessing the Impact of a New Firm on a Small Scale Regional Economy," Plan Canada, (September/December 1976), 171-176. . An Interindustry Study of the Metropolitan Vancouver Economy. Urban Land Economics, Report No. 6. Vancouver: University of British Columbia, undated. Department of Housing. River City. An Analysis of Cost of Public Ser- vices in a New Town, Population 10,000. Victoria: Department of Housing, 1976. Detomasi, D.D. The Decentralization of Population and/or Economic  Activity: A Method for Assessing Its Impact on Small Centres, mimeo, 34 pp. Dror, Yehzekel. "A Third Look at Future Studies," Technological Fore- casting and Social Change, 5, 109 - 112. Environment and Land Use Committee Secretariat. B.C. Towns Study. Unpublished paper, 1976. . Guidelines for Coal Development. Victoria: Ministry of Environment, 1976. . Provincial Service Requirements and Costs for Proposed New Community. Victoria: Ministry of Environment, 1976. 165 Environment and Land Use Subcommittee. Preliminary Environmental Report  on Proposed Transportation Links and Townsites. Victoria, Ministry of Environment, 1977. Francis, Mark. "Urban Impact Assessment and Community Involvement. The Case of the John Fitzgerald Kennegy Library," Environment and  Behaviour, Vol. 7, No. 3 (September 1975), 373-404. Garrison, C. "The Impact of a New Industry: An Application of the Economic Base Multiplier to Small Rural Areas," Land Economics, 48, (4), 329-337. Hoover, E.M. An Introduction to Regional Economics. 2nd ed., New York: Alfred A. Knopf, 1975. Johnston Associates. Mackenzie Market Study. Vancouver: Johnston Associates, 1975. . Dawson Creek Community Economic Analysis. Vancouver: Johnston Associates, 1975. Kahn, Herman, and Anthony Wiener. The Year 2000. New York: The MacMillan Company, 1967. Langford, H.A. Technological Forecasting Methodologies. Washington: American Management Association, 1969. Manpower Sub-Committee on N.E. Coal Development. Report of the B.C.  Manpower Sub-Committee on N.E. Coal Development. Victoria: Min-istry of Economic Development, 1977. Marti no, Joseph. Technological Forecasting for Decision-Making. New York: American Elsevier Publishing Co., Inc., 1972. Ministry of Economic Development. The Manual of Resources. Victoria: Ministry of Economic Development, 1977. . Northeast Coal Development Information Summary. Unpublished paper, 1977. . A Summary Report on Development Possibilities in the North Eastern Region of British Columbia. Victoria: : Ministry of Economic Development, 1975. Ministry of Municipal Affairs and Housing. Alternative Methods of  Financing and Developing Resource-Based Communities. Victoria: Ministry of Municipal Affairs and Housing, 1977. . Municipal Statistics. Victoria: Ministry of Municipal Affairs and Housing, 1975. 166 NeTles, H.V. The Politics of Development. Toronto: The MacMillan Company of Canada Ltd., 1972. Olsen, Marvin, and Donna Merwin. "Toward a Methodology for Conducting Social Impact Assessments Using Quality of Life Social Indicators," Methodology of Social Impact Assessment, ed. K. Finsterbusch and CP. Wolf. Stroudsburg, Penn.: Dowden Hutchinson and Ross Inc., 1977. Palmer, J., and M. St. Pierre. Monitoring Socio-Economic Change. Dept. of Indian Affairs and Northern Development. Ottawa: Information Canada, 1974. Quintette Coal Ltd., Commercial Summary. Unpublished paper, 1976. . Quintette Project Information Summary. Unpublished paper, . A Study of the Socio-Economic Impact of the Proposed Mine Development. Unpublished paper, 1976. Resource Sub-Committee on Northeast Coal Development. Coal Resource  Evaluation. Victoria: Ministry of Mines and Petroleum Resources, 1977. Richardson, H.W. Elements of Regional Economics. Harmondsworth, Middlesex: Penguin Books Ltd., 1969. Shields, Mark. "Grounded Theory Construction in Social Impact Assess-ment," Methodology of Social Impact Assessment, ed. K. Finster-busch and CP. Wolf. Stroudsburg, Penn.: Dowden, Hutchinson and Ross Inc., 1977. . "Social Impact Studies, An Expository Analysis," Environment and Behaviour, Vol 7, No. 3 (September 1975), 373-404. Stanley Associates. Village of Chetwynd Survey and Analysis. Vancouver: Stanley and Associates, 1977. Townsite and Community Development Sub-Committee on Northeast Coal De-velopment. Preliminary Feasibility Report on Townsite/Community  Development. Victoria: Ministry of Municipal Affairs and Housing, 1977. Transportation Sub-Committee on Northeast Coal Development. Northeast  Coal Study. Preliminary Report On Transportation Developments. Victoria: Ministry of Energy, Transportation on Communications, 1977. 167 Unecon Project Consultants. Quintette Coal Project Community Development  Cost Estimates. Vancouver: Unecon Project Consultants, 1976. Utah Mines Ltd., Carbon Creek Coal Development Prospectus. Unpublished paper, 1976. . Carbon Creek Coal Development, Stage I Preliminary Impact Assessment. Volume 1, Vancouver: Utah Mines Ltd., 1976. Waters, W.G."Impact Studies and the Evaluation of Public Projects," Annals of Regional Science, 10 (1), (March, 1976), 98-103. Watts Marketing Research Ltd. Economic Demand Survey, Commercial and  Recreational Fa c i l i t i e s MacKenzie Townsite, B.C. Vancouver: Watts Marketing Research Ltd., 1966. Wolf, CP. "Social Impact Assessment: The State of the Art," Social Impact Assessment, ed. CP. Wolf, Washington, D.C: Environmental Design Research Association Inc., 1974. Yeates, M.H. and P.E. Lloyd. Impact of Industrial Incentives: Southern  Georgian Bay Region Ontario. Ottawa: Energy and Mines, Geographic Paper No. 44, 1970. 

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