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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 f u l f i l l m e n t of the requirements f o r 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 p r e s e n t i n g t h i s  thesis  an advanced degree at the L i b r a r y I  in p a r t i a l  the U n i v e r s i t y  s h a l l make i t  freely  f u l f i l m e n t o f the of B r i t i s h  available  for  requirements  Columbia, I agree  for  that  reference and study.  f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e copying o f t h i s  thesis  f o r s c h o l a r l y purposes may be granted by the Head of my Department or by h i s of  representatives.  this  It  thesis for financial  i s understood that copying o r p u b l i c a t i o n gain shall  not be allowed without my  written permission.  Department o f  Community and Regional Planning  The U n i v e r s i t y o f B r i t i s h Columbia 2075 Wesbrook P l a c e V a n c o u v e r , Canada V6T 1W5  Date  October 5,  1978  11  ABSTRACT The northeast coal sector of the B r i t i s h Columbia economy may be the f i r s t comprehensively planned resource development in this province.  I f development proceeds, i t w i l l mark the f i r s t time government  has taken the lead in planning townsite and community development, transportation, manpower and other key elements.  The implications of coal  development f o r existing communities within the region could be immense. The purpose of this thesis i s to determine the l i k e l y 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 i s a wide range of development p o s s i b i l i t i e s , the method chosen to estimate the effects u t i l i z e s 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 projection of the same variables in the absence of coal development.  Each  scenario i s described in terms of the geographic d i s t r i b u t i o n of impacts and corresponding demand f o r services to be provided in each community. The capacity of the communities to accommodate the predicted magnitude of change i s evaluated and the impact on the region as a whole i s examined.  Coal development has the potential to benefit the impacted communities, the region, and the provincial and federal governments as well as  private sector interests.  However, this i s contingent upon a compe-  tent planning process that can balance economic, s o c i a l , environmental and p o l i t i c a l concerns.  ii i  TABLE OF CONTENTS Page 1.0 1.1 1.2 1.3 1.4 2.0  INTRODUCTION  1  Importance of Northeast Coal to B r i t i s h Columbia Objectives of the Thesis Organization of the Thesis Notes to Section 1.0  1 3 5 7  BACKGROUND TO NORTHEAST COAL  8  2.1 The Northeast Coal Study 2.2 The Coal Guidelines Process 2.3 The Nature of Resource Planning 2.3.1 Planning in the Northeast 2.4 Notes to Section 2.0 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.6.1 3.6.2 3.7 3.8 4.0 4.1 4.2 4.3 4.4 4.5 5.0 5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.2 5.3 5.4  10 14 17 19 22  PROPOSED COAL MINING PROJECTS  24  Sukunka/Bullmoose (B.P. Canada) Babcock/Murray (Quintette Coal) Carbon Creek (Utah Mines) Cinnabar (Cinnabar Peaks) Teck (Brameda) Other Developments Westcoast Transmission Gas Scrubbing Plant Forest Products Summary of Development P o s s i b i l i t i e s Notes to Section 3.0  24 28 30 32 33 33 34 34 35 36  DESCRIPTION OF THE REGION  37  The Northeast Region Chetwynd Hudson's Hope Dawson Creek Notes to Section 4.0  37 39 44 46 48  METHODOLOGY  50  Economic Impact Methodology Economic Base Theory Input - Output Analysis Income - Expenditure Analysis Evaluation of the Models Parameters of the Income-Expenditure Approach Population M u l t i p l i e r Methodology Community Impact Methodology Notes to Section 5.0  50 52 56 60 65 66 68 71 77  iv  Page 6.0  ECONOMIC IMPACT 6.1 6.1.1 6.1.2 6.1.3 6.1.4 6.2 6.2.1 6.2.2 6.2.3 6.2.4 6.2.5 6.3 6.4  7.0 7.1 7.1.1 7.1.2 7.1.3 7.1.4 7.1.5 7.1.6 7.2 7.3 7.4 7.5 8.0 8.1 8.2 8.3 8.4 8.4.1 8.4.2 8.4.3 8.4.4 8.5 8.6  79  Employment and Income Direct Impact Indirect Impact Induced Impact Geographic Distribution of Impacts Development P r o f i l e s Profile 1 Profile 2 Profile 3 Profile 4 Profile 5 Summary of Development Profiles Notes to Section 6.0  79 79 84 88 89 91 91 95 98 100 103 105 108  COMMUNITY IMPACT  109  Chetwynd Demographic Impact Housing Requirements Physical Services Human Services Commercial Impact Summary Hudson's Hope Dawson Creek The Region Notes to Section 7.0  109 110 119 122 126 131 134 135 139 140 143  SUMMARY AND CONCLUSIONS  144  Regional Impacts Community Impacts Factors Influencing Development Options f o r the Region Delayed Development Small Scale Development Large Scale Development with No Government Investment Large Scale Development with Government Investment Concluding Comments Notes to Section 8.0  145 146 148 152 152 154 157 159 161 163  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 D i s t r i c t  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. . .  TABLE  6.1  - Impact Summary, P r o f i l e 1:  80  B.P. Sukunka/Bullmoose  Quintette Babcock/Murray.  94  TABLE  6.2  - Impact Summary, P r o f i l e 2  97  TABLE  6.3  - Impact Summary, P r o f i l e 3  99  TABLE  6.4  - Impact Summary, P r o f i l e 4  102  TABLE  6.5  - Impact Summary, P r o f i l e 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 V i c i n i t y Educational F a c i l i t i e s Summary  TABLE  7.6  - Chetwynd V i l l a g e :  TABLE  7.7  - Chetwynd:  TABLE  7.8  - Housing Requirements, Hudson's Hope  137  TABLE  7.9  - Hudson's Hope:  139  TABLE  8.1  - Summary of Development Implications  Thresholds  . .  f o r Service  Commercial Floorspace Requirements . . . .  Commercial Floorspace Requirements. .  127 132 134  162  vi i  LIST OF FIGURES Paoe FIGURE  4.0  - Population Trends Peace River - Liard Regional D i s t r i c t 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) f o r the Village of Chetwynd  Ill  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  - Population Growth and Decline Chetwynd Assuming 1982 Phase-out of Chetwynd and Phase-In of the New Town  116  FIGURE  FIGURE  7.4  7.5  - Tumbler Ridge Townsite Population Projections 1979 - 1987  FIGURE  7.6  - Population Impact Hudson's Hope  FIGURE  7.7  FIGURE  7.8  - Population Trends and Projections, Peace River Region - Population Trends and Projections, Peace River Communities  118 136  141 142  vi i i  ACKNOWLEDGEMENTS I would l i k e to express my sincere appreciation f o r the valuable contributions of Dr. Craig Davis and Gary Paget.  Also I would  l i k e 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 i s resource planning in B r i t i s h Columbia.  As a s p e c i f i c 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 i s of particular interest for a number of reasons. It has been the object of an intensive federal-provincial planning effort.  The prime focus of this e f f o r t has been on the potential benefits  to the provincial and federal economies of developing a major coal exporting industry in the Northeast Region.  No other sector of the pro-  v i n c i a l 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 i s also seen as a lever f o r economic development of the Northeast Region. This region presently lags behind the province as a whole in many key aspects l i k e average income, economic d i v e r s i f i c a t i o n and other socioeconomic indicators.  1.1  Importance of Northeast Coal to B r i t i s h Columbia  The economy of B r i t i s h Columbia has t r a d i t i o n a l l y been dependent on primary resources.  Pulp and lumber account f o r 22.5% and 20.1% of  the Province's exports respectively.  1  Of the ten leading export commo-  d i t i e s 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 i s undergoing a r a t i o n a l i z a t i o n process to maintain p r o f 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 d o l l a r 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 s u f f i c i e n t 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, i s of interest from the point of view of an economic development strategy f o r 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 i s taking the lead in planning this sector.  Government involvement i s seen as necessary to en-  sure that development i s consistent with overall provincial goals.  Indi-  vidual coal developers w i l l not have this overall perspective in mind. The overall goal i s to promote economic growth so long as environmental and social costs do not exceed the economic benefits to the province.  3  Regional d i s p a r i t i e s , per se, are of secondary  importance in the planning  of this project.  Given these objectives, the planning process f o r the Northeast Coal Sector would seem to be e f f e c t i v e . been as thoroughly evaluated.  Certainly no other sector has  T r a d i t i o n a l l y , government's role has been  one of responding to the i n i t i a t i v e s of the private sector on an incremental or project by project basis.  For the f i r s t time there i s an over-  a l l strategy that includes other economic sectors such as forestry and tourism.  Government i s planning the key infrastructure components -  transportation and settlement. tors depends on road and r a i l  The f e a s i b i l i t y of a l l concerned  sec-  infrastructure being in place.  In many respects Northeast Coal represents a unique opportunity. It has forced an evaluation of resource development policy in B r i t i s h Columbia.  The stimulus was provided by the mining companies.  They  wanted commitments from the Provincial Government so that, when negotiating  with the Japanese, they could make certain guarantees  price and schedules.  To make any such guarantees  such as delivery  the mining companies  require policy commitments - p a r t i c u l a r l y 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 bringing  the coal onto the market, i t i s impossible to accurately predict the  4  level and timing of coal development.  Yet the implications of coal devel-  opment f o r the Peace River - Liard Region could be immense. . The current regional trends of economic stagnation and population decline may be reversed i f development proceeds.  The social and economic impact on i n d i v i d -  ual communities, especially Chetwynd could be even more dramatic.  Faced  with these p o s s i b i l i t i e s , i t i s clear that there i s a recognized need f o r planning at both the local and regional  level.  Systematic planning cannot be undertaken without r e a l i s t i c knowledge 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 f o r the future.  Fur-  thermore, a certain amount of lead time i s necessary - planning f o r 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 w i l l attempt to anticipate the l i k e l y effects of potential coal developments in the northeast of B r i t i s h Columbia. S p e c i f i c a l l y , 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 w i l l 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 i s the generation of scenarios which encompass the range of relevant development p o s s i b i l i t i e s . It i s f e l t that this approach i s the simplest method available that deals with the uncertainties surrounding  the probability of individual  projects being developed.  The f i r s t step i s 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 i d e n t i f i e d as potentially being affected are described with respect to population trends, employment structure, commercial structure and housing. c r i p t i o n is necessary  A f u l l community des-  as a base against which the predicted impacts of  development can be compared.  6  A t h i r d section considers assessment.  the methodology of economic impact  Three methods of estimating  are discussed  or predicting economic impact  and evaluated as to t h e i r 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 i s the population  impact.  A population  model serves  as the link between the economic analysis and the community impacts. rect, i n d i r e c t and population  Di-  induced employment are translated into a detailed  breakdown.  Another section is devoted to a summary of the impact of the coal developments on community services.  In p a r t i c u l a r housing, physical  vices and social services are examined.  Lastly, a summary and  ser-  conclusions  are presented including the impacts of development on the existing communities and steps that must be taken to accommodate change.  Before getting into the main body of the thesis, i t is useful review some of the background material  to northeast coal.  A knowledge of  certain events is essential to an understanding of the implications development.  Hopefully  of  this w i l l give the reader a feel for the North-  east Coal sector and the process as i t has unfolded so f a r . we turn our attention in the next section.  to  To this  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 exploration by Alexander MacKenzie and others i n the late eighteenth and early nineteenth centuries.  Over the years a number of mines have operated  o f f and on, mostly i n the Chetwynd area.  The l a s t of these closed i n 1964.  Interest i n northeast coal was once again stimulated by the export of Crowsnest coal to the large Japanese market f o r coking (metallurgic) coal.  The steel industry, most notably the Japanese steel industry,  is expected to be the main source of export demand f o r B r i t i s h Columbian coal.  Compared to the Crowsnest coal f i e l d , the Peace River seams are  more complex f o r mining and are located in a more severe geographic environment.  However, tests indicate that the measured reserves are of a  higher quality f o r coking as compared to Crowsnest coal and compare very favourably with other sources of supply i n United States and A u s t r a l i a , the main competitors f o r the Japanese market.  1  On this premise, several  mining companies engaged i n extensive exploration a c t i v i t y from 1969 u n t i l the present time.  A number of mining companies resumed major i n i t i a t i v e s in exploration and marketing  i n the mid-1970's.  Several took out options to de-  velop properties including Quintette Coal Limited - a j o i n t venture of Denison Mines, two Japanese steel companies and Imperial O i l Limited and B r i t i s h Petroleum  Canada Limited.  These two development proposals  would see 5 m i l l i o n and 3 m i l l i o n 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, e n t i t l e d "The Northeast Report '75", studied the economic development potential of the Northeast Region. Among the findings was that there i s a major opportunity f o r regional economic development and d i v e r s i f i c a t i o n of the economy through development of the coal f i e l d s .  The report cautioned that detailed and care-  ful planning would be required to maximize economic benefits while minimizing adverse social and environmental impacts.  At this time, there were no e x p l i c i t regional resource development p o l i c i e s within which to respond to the i n i t i a t i v e s 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 p o l i c i e s such as reclamation, pollution control and other requirements.  For their own part, the government  position was not clear on the question of assuming d i r e c t equity in coal development or to continue on as in the past assuming a supportive role in marketing e f f o r t s , provision of infrastructure and so on.  Against this background, i n January 1976, the Ministry of Economic 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 Communications; Environment; and Forests.  The respective ministers and deputy  ministers s i t on the committee with the exception of Forestry which i s 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 l i n k s , 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 proposed developments: (1)  the Environment and Land Use Sub-Committee (ELUSC), which i s responsible f o r the overall evaluation of environmental aspects of proposed developments;  11  (2)  the Transportation Sub-Committee  (TptSC), which i s respon-  s i b l e f o r the overview planning of transportation, communications and u t i l i t i e s networks; (3)  the Townsite and Community Development Sub-Committee  (TCDSC),  which is responsible f o r assessing tne need f o r new communit i e s , and for p r i o r i z i n g alternative locations f o r town development; (4)  the Manpower Sub-Committee  (MSC), which i s responsible f o r  developing labour supply policy recommendations; and (5)  the Coal Resources Sub-Committee  (CRSC), which i s responsi-  ble f o r evaluating the coal resource.  Seven reports have been released by the Cabinet Committee. of the findings of these reports are summarized below. the Peace River coal f i e l d are very extensive.  Some  The reserves of  The inferred inplace re-  sources have been estimated at 7.7 b i l l i o n tonnes.  Of this  approximately 3  300 m i l l i o n tonnes have been c l a s s i f i e d as inplace mineable reserves. The difference in c l a s s i f i c a t i o n between inferred resources and mineable reserves i s a variable of degree of confidence of existence (geological knowledge), and degree of f e a s i b i l i t y of production (economic knowledge). "Reserves" are those resources that have been accurately measured and determined to be mineable given current technology and economic conditions. The inplace reserves can sustain production f o r at least 25 years at rates of extraction currently being proposed.  In many cases the mine-  head costs of Northeast coal w i l l 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 f o r shipping coal f o r export i s the CNR r a i l i h e 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 s u b s t a n t i a l l y 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 r e l a t i v e to the commuting  distances to the various mine-  sites.  Direct employment could peak as high as 3,500 in 1987.  Labour  shortages w i l l not be l i k e l y f o r the open p i t operation in terms of a v a i l a b i l i t y of people but labour supply and demand may be mismatched q u a l i t a t i v e l y , especially f o r s k i l l e d 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 excessive provided minesites and related infrastructure are designed to avoid or reduce the i d e n t i f i e d impacts.  The medium to long term export potential for coking coal i s not as  optimistic as i t seemed in the early 1970's.  ments are not as great as once throught.  Japanese import require-  Steel production i s 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 f o r coking coal (volume and p r i c e ) , a s u f f i c i e n t supply of underground 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  f u l l scale development in the Northeast. However, development at some of the properties on a smaller scale may be f e a s i b l e .  An additional $12.6 m i l l i o n was allocated f o r 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 t i c a l factors of market conditions, underground labour supply  and underground mining technology, i d e n t i f i e d 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 f i n a l 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 as to whether a 1980 start-up could be  These studies were completed in March 1978.  1978  met.  As of this time no  decision to proceed has been made.  2.2  The Coal Guidelines Process  The Environment and Land Use Committee (ELUC) i s a cabinet committee composed of nine ministries responsible f o r resource use and conservation and major public f a c i l i t i e s such as highways.  ELUC has adopted  a document prepared by i t s secretariat e n t i t l e d "Guidelines f o r Coal 8 Development".  This document describes a four stage impact assessment  procedure required by the Provincial Government f o r the review of license and permit applications before coal mines can be developed.  The  is coordinated by a Coal Guidelines Steering Committee, comprised resentatives of the Ministry of Mines and Petroleum of Economic Development and the ELUC Secretariat.  process of rep-  Resources, Ministry The Coal Guidelines  Steering Committee i s a separate entity from the steering committee associated with the subcommittee structure of the Northeast Coal Study. The review process i s one that goes from a general overview of the project  15  to s p e c i f i c impact assessments and management proposals with review at each stage by the Coal Guidelines Steering Committee and the appropriate l i n e 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 i s reviewed by the Coal Steering Committee, i s a general outline of the proposed exploration, minesite and o f f s i t e development programs.  The Prospectus i s circulated to l i n e departments and t h e i r com-  ments are returned to the Coal Guidelines Steering Committee.  The next step i s the submission of a Stage I Report.  This i s a  preliminary i d e n t i f i c a t i o n and assessment of the major economic, social and environmental impacts of the proposed development on- the region and s p e c i f i c communities which w i l l be affected.  The Stage I Report w i l l  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 i s made of existing data f o r the region in order that information gaps may be i d e n t i f i e d .  After consulation iwth relevant Govern-  ment agencies, study and/or monitoring programs are i n i t i a t e d to f i l l the identified' information gaps.  A systematic documentation of the major  interactions between the proposed development and the environment - biophysical and socio-community - i s included at this stage as i s a prelim-  16  inary estimate of gross economic benefits.  Lastly, alternatives f o r m i t i -  gating or avoiding adverse environmental and social impacts must be i n cluded.  The Stage I Report i s submitted to the Coal Guidelines Steering Committee and circulated to various l i n e departments  f o r review.  If the  draft report conforms to the guidelines a formal commentary i s submitted to the developer indicating the degree to which the i d e n t i f i e d alternatives are l i k e l y 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 i s 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 p a r a l l e l s  the Stage I Report  except that more in-depth analysis i s called f o r . The same review process as for the Stage I Report i s applied to the Stage II Report.  Ac-  ceptance of the Stage II Report represents approval in p r i n c i p l e f o r the  development.  Stage III i s 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 required for statutory approvals.  Also during this stage monitoring pro-  grams for the construction and operation phases are to be designed. Successful projects are granted the necessary permit approvals and a production lease i s granted by the Lieutenant-Governor  in Council upon the  recommendation of the Minister of Mines and Petroleum  Resources.  The l a s t stage of the process i s the implementation ing monitoring programs. surface reclamation. velopment phase.  of continu-  Key areas include a i r and water quality and  The most intensive monitoring i s done in the de-  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 i s most often made by the private sector. p r o f i t concerns.  The private sector i s assumed to be motivated by  Limitations on development of resource based  industries  in the northeast as opposed to alternative regions of the provice are the result of estimations of p r o f i t a b i l i t y as perceived by private investors. This, in turn, i s 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 i s both d i r e c t , in that resources are owned by the Crown,  18  and i n d i r e c t , in the sense that the public sector has a broader mandate than the narrow, primarily economic one of individual developers. structure of the B.C. economy i s such that primary resources a l l other sectors.  The  support  Although the same could be said of most every economy,  this relationship i s p a r t i c u l a r l y strong in B.C. because other sectors are, r e l a t i v e l y speaking, underdeveloped.  This i s p a r t i c u l a r l y true, by  d e f i n i t i o n , of hinterland areas such as the northeast.  To the extent that the economy i s resource described as a negotiated  economy. ^ 1  based, i t could be  Prior to development of a resource,  negotiations take place between private sector developers and the appropriate government agencies.  Through this process government attempts  to r e a l i z e public goals and objectives. In exchange i s offered development rights (leases, permits, etc.) and, where appropriate, concessions such as infrastructure investments or tax breaks.  Planning  i s undertaken by both public and private sectors.  vate sector planning motivation. locally.  Pri-  i s characterized by decentralization and economic  Although decentralized, decisions are not necessarily made  Multi-national firms most often reserve policy and other fund-  amental decisions for the head o f f i c e , delegating only the routine decision-making to the location of the operation.  Public sector  planning  is broader i n scope and may include non-economic issues and objectives. Like private sector decisions, public policy decisions are often made in a d i f f e r e n t location from where they may be actually implemented ( i . e . V i c t o r i a or Ottawa).  19  There i s another dimension  of planning that deserves mention.  Planning may be sectoral and/or spatial in i t s scope.  Sectoral planning  usually refers to primary resource sectors such as f i s h i n g , forestry, coal and so on, but can include other economic sectors such as transportation, 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 a l l types. dimension  The spatial  of planning i s concerned with d i s t r i b u t i o n 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 concerned with allocation within a s p e c i f i c region or among certain social groups.  Resource planning tends to be sectoral although i t may be integrated with spatial or regional concerns planning process.  into an o v e r a l l , comprehensive  This i s usually the case with development planning  for an underdeveloped or declining region.  Comprehensive approaches are  less often exercised in developed or growth regions, the i m p l i c i t reasoning being that growth in i t s e l f i s an indicator of health hence structural intervention i s unnecessary.  2.3.1  Planning in the Northeast  When the mining companies began approaching  the government with  proposals f o r large scale development of northeast coal and requests f o r  20  provision o f townsite and transportation infrastructure there was tainty as to how to respond. Government  uncer-  The t r a d i t i o n a l role of the Provincial  in B.C. with regard to resource development has been a sup-  portive one.  The government would provide or a s s i s t in the provision of  infrastructure and would a c t i v e l y promote B.C. resources in foreign markets.  It has not been the practive to assume an equity position in re-  source development.  However, northeast coal represents a d i f f e r e n t  ation in some key respects. sion.  situ-  This was not just another incremental deci-  The entire region would be r a d i c a l l y altered s o c i a l l y , 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 i n -  vestments?  Out of this process has evolved a coal policy f o r the northeast. Basically the position adopted i s that coal development i s 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 f u l l scale infrastructure development on the basis of future expectations of market conditions that may or may not materialize. will  In the meantime small scale developments  be encouraged and marketing efforts w i l l  be confined.  Design and  policy analysis f o r transportation and townsite infrastructure i s being carried out under the terms of the second phase of the Subsidiary Agreement to Evaluate Northeast Coal Development and world markets w i l l be  21  continually monitored  so that decisions can be made quickly should  cir-  cumstances warrant this i n the future.  For the f i r s t time government i s taking the lead in planning resource development in B.C.  Instead of providing assistance in the develop-  ment of o f f s i t e infrastructure, government i s d i r e c t l y involved in designing  and analysing townsite and transportation infrastructure.  training and development programs w i l l be organized.  Manpower  A policy of fixed  royalties f o r thermal and metallurgic coal has been adopted.  A planning  process f o r large scale coal developments has been implemented to ensure that assessment of land use, environmental  and socio-economic  impacts  is undertaken p r i o r to the approval process.  While i t i s unquestionably an improvement from resource planning in the past, the northeast coal experience s t i l l comings.  has some major short-  For example, i t i s questionable that local interests are e f f e c t -  ively represented.  The decisions are being made in V i c t o r i a and in the  head o f f i c e s of the mining companies.  T y p i c a l l y , administrators and pro-  fessionals i n the region are the l a s t to be informed of important decisions or findings since lines of communication are weak.  Representation  of a l l affected bodies should be sought to the maximum extent f e a s i b l e . This i s already the case with conventional resource management in the province.  Here a committee structure i s employed to resolve c o n f l i c t s  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 D i s t r i c t s at the regional l e v e l . However, the planning links between provincial planners and local interests are not well defined.  The northeast coal planning exercise i s something of an experiment.  It i s 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 e s s e n t i a l l y ad hoc fashion and no agency has a clear mandate to formulate complete provincial and regional development strategies. planning.  Resource planning i s isolated from industrial development 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 industrial  goals and objectives i s formulated.  The i n s t i t u t i o n a l framework  is already in place, although the mandates of the committees may to be expanded to include these broader  2.4  have  concerns.  Notes to Section 2.0  -  1.  Resource Sub-Committee on Northeast Coal Development, Coal Resource Evaluation.  2.  Environment and Land Use Sub-Committee, Preliminary Environmental 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 F e a s i b i l i t y Report on Townsite/Community Development, V i c t o r i a : Ministry of Municipal A f f a i r s 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 P o l i t i c s 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. and impacted  3.1  Employment and income effects are described  communities are identified-.  Sukunka/Bullmoose (B.P. Canada)  B r i t i s h Petroleum  Canada, through B.P.  quired 100% control of the Bull moose property. held by Brameda Resources.  Canada Holdings, has acThis property was  formerly  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 i s located about 60 kilometers south of Chet-  wynd and Bullmoose about 100 kilometers south.  Access to the two  proper-  ties i s via two d i f f e r e n t roads as there i s 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 m i l l i o n tonnes of high quality coking coal, enough to support an annual rate of production of 3 m i l l i o n tonnes of saleable coal 2 for at least 20 years.  25  B.P. i s planning to phase development of the properties in two stages.  F e a s i b i l i t y of the second stage i s 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 Rupert and a Provincial Highway.  l i n e , a new port at Prince  Stage 2, which involves an increase in  yearly production from 0.8 m i l l i o n tonnes (the maximum production of stage I) to a maximum of 3 m i l l i o n tonnes, w i l l only be undertaken i f the required infrastructure i s in place.  It should not be inferred from the above that there are no i n f r a 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 r a i l  and port f a c i l i -  ties which have tonnage limits and yet are essential i f there i s to be access to export markets.  It i s proposed that in the i n i t i a l  phase coal w i l l be produced  from both the Sukunka and Bullmoose properties. oped in the Saddle Creek area (Bullmoose).  Two mines w i l l  be devel-  The workings of the Window  Mine (Sukunka) w i l l be extended towards the Saddle Creek mines so that a connection between these mines w i l l eventually be made i n 1981 or soon 3 after.  The coal that i s produced prior to completion of the connection  w i l l be trucked to Chetwynd for washing via roads up the Sukunka and Bullmoose Valleys.  After the connection i s made between the Window mine  and a Saddle Creek mine then the entire production (.5 m i l l i o n tonnes)  26  w i l l be trucked v i a the Window mine up the Sukunka Valley as the distance to Chetwynd i s shorter and transportation cost may be minimized. Production in the f i r s t stage w i l l  increase from an i n i t i a l 40,000  tonnes in 1978 to 500,000 tonnes in 1980.  Production w i l l remain at  500,000 tonnes until Stage 2 begins.  Coal produced in Stage I i s to be processed at a temporary wash plant i n Chetwynd.  The capacity of this f a c i l i t y w i l l be approximately 4  150 tonnes per hour.  The washery i s to be modular and can be trans-  ported by truck and assembled on s i t e .  The washery is expected to be in  use for about f i v e years after which i t could be dismantled and moved elsewhere.  Through use of the temporary washery i t w i l l be possible to  gather test data on the washing characteristics of the coal as well as to t r a i n mine workers.  This information is necessary in order to de-  sign a more e f f i c i e n t 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 m i l l i o n tonnes to 2 m i l l i o n tonnes and possibly 3 m i l l i o n tonnes. the  time f u l l  By  production i s reached a l l production w i l l be brought out  of the Saddle Creek mines. be operational.  By this time a permanent washing f a c i l i t y w i l l  The washery l i k e l y w i l l 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 WORKFORCE  CONSTRUCTION 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 a f t e r .  A feasi-  b i l i t y study completed in 1976 examined the p o s s i b i l i t y of producing 5 5 m i l l i o n 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 f o r 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 i s the major share-  holder in Quintette Coal Limited with 38.25% of the total equity.  The  remainder of equity i s 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 i n -  place reserves are estimated to be 1 b i l l i o n tonnes and potential i n Q place reserves are estimated to be greater than 2.8 b i l l i o n  tonnes.  Development w i l l be at two separate s i t e s , Babcock and Murray (also referred to as Wolverine).  The Murray i s proposed to be developed  first.  There are to be two open pits on the Murray s i t e , the S h e r i f f p i t , o r i g i n a l l y scheduled for a 1978 start-up, and the Frame p i t , scheduled f o r 1984.  At the Babcock area there are to be two open pits as well, the  29  Windy p i t , scheduled  f o r 1980, and the Roman p i t scheduled  addition to one underground mine.  Quintette plans to operate a coal pre-  paration plant (washery) at each of the s i t e s .  The f i r s t treatment  ity w i l l be adjacent to the S h e r i f f and Frame p i t s . scheduled full  f o r 1984, in  facil-  Construction is  to begin in 1977 and by 1980 i t i s expected to be operating at  capacity of 2 m i l l i o n tonnes per year.  The second wash plant, on  the Babcock s i t e , i s expected to reach i t s f u l l tonnes per year in 1983.  capacity of 3 m i l l i o n  Coal w i l l be transported from the preparation  plants to Prince Rupert in unit trains with a capacity of 10,000 tons. g It T S anticipated that s i x unit t r a i n sets w i l l 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 l i g h t  of more up-to-date information.  The following development schedule i s  currently the best available estimate.  30  TABLE 3.2 QUINTETTE DEVELOPMENT SCHEDULE YEAR  PRODUCTION PER YEAR (MILLIONS OF TONNES)  CONSTRUCTION WORKFORCE  1979  OPERATING WORKFORCE  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  Ministry of Economic Development, Interdepartmental memo, dated November 1, 1977.  Note:  Construction figures include a townsite labour force  3.3  Carbon Creek (Utah Mines)  Development rights to Carbon Creek are owned by Utah Mines Limited.  Carbon Creek i s located 30 kilometers west of W.A.C. Bennett Dam or  50 kilometers west of Hudson's Hope.  Chetwynd i s about 75 kilometers  southeast.  Hudson's Hope would be the preferred location f o r company  employees.  Recoverable reserves are f a i r l y extensive at 75 m i l l i o n  31  tonnes of which 39 m i l l i o n are recoverable by surface techniques and 35 m i l l i o n by underground methods. ^ 1  In the Utah Stage 1 Report i t i s indicated that construction i s 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 i n 1982. edule has been moved ahead one year.  There w i l l be two open p i t s , one  underground mine and one contour mine. clude:  In the table below the sch-  Infrastructure requirements i n -  a construction camp in the v i c i n i t y of the mine industrial com-  plex, a mine access route from the Bennett Dam, warehousing, o f f i c e s and housing for workers.  a wash plant, mine shops, 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 v i a unit trains to Prince Rupert.  TABLE 3.3 UTAH DEVELOPMENT SCHEDULE YEAR  PRODUCTION PER YEAR (MILLIONS OF TONNES)  CONSTRUCTION WORKFORCE  1978  108  1979  588  OPERATING WORKFORCE  1980  0.35  636  200  1981  0.80  350  385  1982  1.90  194  729  1983  2.30  Source  Urat Stage 1 Report  862  32  3.4  Cinnabar (Cinnabar Peaks)  This property i s 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 infrastructure already in place and the readily available access routes.  If development occurs, start-up could be as early as 1984 full  production of 0.5 m i l l i o n tonnes per year by 1985  schedule below).  with  (see development  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 d i r e c t communication with Cinnabar Peak Mines.  The workforce would l i k e l y be drawn equally from  Chetwynd and Hudson's Hope.  TABLE 3.4 CINNABAR DEVELOPMENT SCHEDULE YEAR  PRODUCTION PER YEAR (MILLIONS OF TONNES)  1983  CONSTRUCTION WORKFORCE  OPERATING WORKFORCE  150  1984  0.35  1985  0.5  180  1986  0.5  180  1987  0.5  180  Source  100  120  Ministry of Economic Development, Interdepartmental memo dated November 1, 1977.  33  3.5  Teck (Brameda)  The l a s t 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 m i l l i o n tonnes per year for perhaps 10 years.  However, i t i s a surface operation and could  therefore go ahead at r e l a t i v e l y short notice. velopment schedule below was tainty.  The timing of the de-  chosen a r b i t r a r i l y because of this uncer-  Construction and operating manpower build-up was  estimated  on the basis of company data from similar projects in the northeast rather than on d i r e c t communication with Teck.  TABLE 3.5 TECK DEVELOPMENT SCHEDULE YEAR  PRODUCTION PER YEAR (MILLIONS OF TONS)  1982  CONSTRUCTION WORKFORCE  OPERATING WORKFORCE  150  1983  0.35  1984  0.50  180  1985  0.50  180  3.6  100  120  Other Developments  In addition to coal development two other projects may impact on the study area in the future.  have an  It is f e l t that these potential  34  developments should be included in the analysis because they w i l l add to regional and community impact.  To a certain extent, they w i l l compete  with the coal projects for available labour and w i l l add to the demand for services.  3.6.1  increased  These projects are b r i e f l y outlined below.  Westcoast Transmission Gas Scrubbing Plant  Westcoast Transmission is building a pipeline and w i l l be building a gas scrubbing  plant near Chetwynd.  To construct the plant and a  pipeline an average workforce of around 500 w i l l be employed over a period the two years 1978 mately 50.  and 1979.  The operating work force would be  The community to be impacted i s Chetwynd.  approxi-  In fact W.C.T.  has already purchased a number of lots in Chetwynd for t h e i r employees.  3.6.2  Forest Products  There are a number of development p o s s i b i l i t i e s in the forestry sector of the Northeast.  Options include expansion of existing saw m i l l s  and the construction and operation of a new m i l l .  Two  sawmills in Chet-  wynd, Canfor and Chetwynd Forest Industries, were i d e n t i f i e d as having potential for expansion in the N.E. addition of up to 85 d i r e c t jobs.  Report.  11  This would result in the  In the same report the p o s s i b i l i t y of  a new mill producing 90 MM fbm at Tumbler Ridge is brought out. 12 employment was  estimated at  240.  Direct  35  3.7  Summary of Development P o s s i b i l i t i e s  The following table summarizes the developments  discussed above.  In a l a t e r section the projects are combined into f i v e development f i l e s f o r the region.  pro-  As can be seen from the table the total poten-  t i a l f o r the region i s very s i g n i f i c a n t , over 4,400 d i r e c t jobs could be created by 1992.  Timing of the projects could prove to be a problem  especially with regard to labour force a t t r a c t i o n .  TABLE 3.6 SUMMARY OF PROJECTS COMPANY  PRODUCTION  OPERATING EMPLOYMENT A  AFFECTED COMMUNITY  START-UP DATE  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 B  Sawmi11  90 mm fbm  Chetwynd  1982  OTHER DEVELOPMENTS 240  Tumbler Ridge  1982  —  50  Chetwynd  1979  Sawmill Expansion  130  Chetwynd  1978-79  W.C.T.  36  3.8  Notes to Section 3.0  1.  B.P. Exploration Canada Ltd., Prospectus f o r 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  6.  Proposed Mine Development.  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 Preliminary Impact Assessment, Volume I. 11. Ministry of Economic Development, A Summary Report on Development P o s s i b i l i t i e s in the Northeastern Region of B r i t i s h Columbia, p. 30. 12. Ibid.  37  4.0  DESCRIPTION OF THE REGION  In order to determine the impact of a project or number of projects 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 i s 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 communities most l i k e l y 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. 1971  this amounted to 43,996.^  population l i v e s there.  Population growth has been irregular in  the past as i s typical of resource based economies. 1971  In  population increased by 6.2%  Between 1966  and  compared to a 16.6% growth rate for the  2 province during the same period. 1961  to 1966,  During the previous f i v e year period, 3 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 i s distributed among a number of secondary settlements including Chetwynd, Hudson's Hope, Pouce Coupe and Taylor.  38  39  The economy of the Northeast region i s p r i n c i p a l l y based on forestry, agriculture and to some extent petroleum products. coal have the greatest potential for development.  Forestry and  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 i s r e l a t i v e l y young and is male biased, p a r t i c u l a r l y in the age 35 - 64 cohort.  This r e f l e c t s  the male orientation of the employment structure and the selective migration that tends to occur because of t h i s .  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 i s considerable fluctuation from year to year r e f l e c t i n g economic developments in surrounding areas.  Population i s divided very evenly among male and  female with 50% of the population and 69% of the labour force being male. The population of Chetwynd i s 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 i s p r i marily based on the forest industry and to a lesser extent on coal mining and agriculture. nomic development.  These two sectors also have the most potential for ecoPotential employment from a new sawmill or expansion  0  TABLE 4.0  EXPERIENCED LABOUR FORCE BY INDUSTRY PEACE RIVER LIARD REGIONAL DISTRICT F i n a n c e 4 ' Conmunlty Fishing & Town  Forestry  Aqrle. •  Trapping  Ins. & Mines  Construction  Hanuf.  K  F  H  F  H  F  H  F  M  105  5  75  5  10  -  45  5  265  55  445  15  -  -  -  -  10  -  5  F  H  F  Transp'n.  Trade  H  F  H  F  M  15  520  200  680  270  85  -  40  10  20  -  and B u s i n e s s P u b l i c Admin. Services  1 Defense  H  F  H  90  430  020  150  10  30  40  5  Real F s t . F  F  Unspec'd K  F  55  225  175  -  15  10  Peace R'vor Area: Dawson Creek Pcucc Coupe Rural Area F t . S t . John Rural Area Taylor R u r a l Area  ' -  5  85  -  -  -  80  -  210  5  175  10  175  65  -  65  80  -  40  160  240  5  195  105  60  5  35  5  5  -  275  20  170  20  365  25  410  65  415  200  00  55  310  540  100  35  160  125  105  35  20  -  -  -  115  -  00  5  120  10  220  30  145  55  15  20  90  185  55  -  65  45  10  -  10  -  5  20  45  -  10  -  25  -  -  25  35  5  -  70  10  20  20  5  5  35  70  5  5  15  5  -  25  15  -  20  50  40  -  -  45  10  -  -  -  -  5  -  -  -  30  5  10  5  20  -  20  5  165  70  5  -  -  -  55  5  25  -  30  -  50  5 • 20  5  -  90  -  30  -  55  15  95  -  55  -  50  -  20  5  -  -  10  65  -  -  -  -  -  -  -  10  -  -  -  -  -  5  -  -  -  5  -  -  -  -  -  5  -  -  10  -  -  -  -  -  5  -  125  -  70  15  15  15  -  5  50  65  60  15  15  -  -  -  10  -  20  60  5  15  10  5  -  15  25  915  145  350  15  15  -  620  35  905  605 270 220  1100  2025  -  Rural Area  15  N o b e r l e y IH I M s o n Hope R u r a l Area  Source:  5  390  Chetwynd  Sub-Total  5  S t a t i s t i c s Canada 1971 Census Tapes.  -'  90  95  1465  60  1675  415 1365  -  5  5  15  10  -  15  5  565 110  835  5 -  -  SCO  o  41  T A B L E 4.1 CHETWYND  DEMOGRAPHICS  DEMOGRAPHICS 1966  Population: Regional District  41,441  Municipality Households: Regional District  % 6  1971  43,996 1 , ?fiD  %  -  1976  %  Estimated 1981  43,841 1  4^ ?  11,050  Municipality Household size: Regional District  291 3.8  Municipality  4.2  source:  4.1  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 Housing Community  Profile.  %  42  of an existing one could amount to 285 new 1978-82.  jobs during the period  Coal mining could create even more employment.  6  The  pro-  posed gas scrubbing plant would provide an additional 50 jobs.  TABLE  4.2 EXISTING HOUSING STOCK CHETWYND, 1977  Source  1  Units  %  261  61  1.  Single detached  2.  Apartments  52  11  3.  Mobile homes  64  12  4.  Medium density residential  54  15  5.  Total  1.  Village of Chetwynd Survey and Analysis  2.  The Sukunka/Bullmoose Stage 1 Environmental Study Volume 1  431  Text B.P.  Exploration Canada Ltd. Nov.  1977  100%  indicates fur-  ther that 100 units were underway or in f i n a l  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 A f f a i r s and Housing, Community P r o f i l e s ) . Land a v a i l a b i l i t y for housing is adequate.  There are 80 serviced lots o  and 350 potential lots available for development.  43  The commercial sector of Chetwynd i s not very well developed. Chetwynd does not have a s i g n i f i c a n t r e t a i l 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. Meters  (Sq. Ft.)  SQ. METRES/CAPITA (SQ. FT/CAPITA) 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)  970  (10,800)  0.6 (  7.2)  0.2  ( 2.1)  13,610  (151 ,200)  9.1 (100.8)  3.4  (38.5)  Misc  TOTAL  *Primary trading area f o r retail/storage - 3,300 people Secondary trading area f o r 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  Hudson's Hope's 1976 t i a l decline from the 1966  9 1,319.  population was  level of 3,068.  This is a substan-  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 population is in the 0 - 1 5  age cohort and 33% is in the 15-34  is about average for the Northeast region.  cohort. ^ 1  This  Approximately 53% of the pop-  ulation and 76% of the labour force is male.  11  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 i s 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 i s 3.7,  s l i g h t l y below the regional average.  is no municipally-owned land available for housing, B.C.  Although there Hydro owns  many vacant l o t s . Like Chetwynd, Hudson's Hope does not service a large contiguous area.  Therefore, the commercial sector of the local economy i s not well  TABLE 4.4 HUDSON'S HOPE DEMOGRAPHICS  Population: Regional D i s t r i c t Municipality Households: Regional D i s t r i c t Municipality Household s i z e : Regional D i s t r i c t  1966  %  1971  41,441  6  43,996  43,841  1,741  1,319  3,068  %  1976  %  Estimated 1981  11,050 435 3.8  Municipality Comments - Employment associated with the operation of the Site One Reservoir i s expected to bring approximately 20 families into Hudson's Hope. An additional 50 people may s e t t l e in the general area. Source  Municipal A f f a i r s and Housing 1977, Community Profiles  %  46  4.4  Dawson Creek  Dawson Creek has been experiencing a population decline during the l a s t two census periods. in 1966  to 11,885 in 1971  Creek is s t i l l  The population is down from a high of 12,392  and 10,406 in 1976.  14  Despite this Dawson  the largest settlement in the Northeast  24% of the region's total population.  The triale:female ratio is 51/49  the age structure is f a i r l y young, although other communities such as Hudson's Hope. lation is in the 0-14  region and comprises and  not as young as some of the  Approximately 35% of the popu-  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 i t s role as a regional supply and service centre for the Peace River area, p a r t i c u l a r l y f o r 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 1g  single, 185 double, 430 multiple and 70 mobile.  including 2,480  There is a shortage of  rental accommodation despite the decline in population however. a v a i l a b i l i t y for housing  Land  is not a problem as the City owns considerable  land.  Because of i t s role as a service centre Dawson Creek has a r e l a t i v e l y well developed commercial/retail sector.  The r e t a i l structure of  Dawson Creek is summarized in the following table.  TABLE 4.5 DAWSON CREEK DEMOGRAPHICS  Population Regional D i s t r i c t Municipality  1966  %  1971  %  1976  41,441  6  43,996  -  43,841  12,474  Households: Regional D i s t r i c t  10,406  Estimated 198]  %  *  11,050  Municipality  3,162  Household s i z e : Regional D i s t r i c t Municipality  11,885  %  3.8 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 A f f a i r s and Housing 1977, Community Profiles  48  TABLE 4.6 DAWSON CREEK COMMERCIAL STRUCTURE RETAIL STORE TYPE  NO. OF STORES  Food and Beverage  15  68,439  9  114,684  38  107,775  9  20,441  Hardware & Home Furnishings  14  38,854  Other Retail  25  48,263  110  398,456  General Merchandise Automotive Apparel and Accessories  Total  Source  SQUARE FEET  Dawson Creek Economic Study Johnston Associates 1975  4.5  Notes to Section 4.0 1.  S t a t i s t i c s Canada, 1971 Census.  2.  Ibid.  3.  Ibid.  4.  Ministry of Municipal A f f a i r s and Housing, Community Profiles.  5.  Environment and Land Use Committee Secretariat, B.C. Towns Study.  6.  Ministry of Economic Development, A Summary Report on Development P o s s i b i l i t i e s i n the Northeastern Region of B r i t i s h Columbia, p. 30.  49  7.  Environment and Land Use Committee Secretariat, op. c i t .  8.  Ministry of Municipal  9.  Ibid.  A f f a i r s and Housing, op. c i t .  10. S t a t i s t i c s Canada, op. c i t . 11. Environment and Land Use Committee Secretariat, op. c i t . 12. S t a t i s t i c s Canada, op. c i t . 13. Environment and Land Use Committee Secretariat, op. c i t . 14. Ministry of Municipal  A f f a i r s and Housing, op. c i t .  15. S t a t i s t i c s Canada, op. c i t . 16. Ministry of Municipal  A f f a i r s 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 Northeast coal development,  i t becomes apparent there i s no single established  method to undertake such an analysis.  I t i s 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 a r t i c l e s  written c r i t i q u i n g various individual  approaches.^  The state of development  i s not surprising when you consider i t  has only been recently that impact studies have become an i m p l i c i t or exp l i c i t requirement for project approval. economic,  Statutory requirements to study  (or other) impacts before approval i s granted by the appropri-  ate government agency are not always i n place.  However, i t has become a  requirement i n fact, i f not l e g a l l y , as most departments make an impact study a necessary prerequisite f o r project approval or include some sort of impact requirements i n the terms of reference of contracts l e t out to private consultants.  For example, the Province's "Guidelines f o r Coal  Development" establishes a procedure f o r assessment of the biophysical and social-economic impacts of coal developments.  Coal companies must  follow this procedure, among other requirements, before approval i s granted by the Ministry of Mines and Petroleum Resources for development. Unfortunately, no s p e c i f i c methodology i s mentioned  in the Guidelines a l -  though they do identify components of an impact study.  51  The main body of the economic impact l i t e r a t u r e has been developed by private consultants sector.  under contract to government agencies or the  In some cases they may  private  be under contract to a private company  which is required to submit an impact statement. are designed f o r a s p e c i f i c project.  Most of these studies  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 i s i t s s i m p l i c i t y , both  conceptually  and  in terms of data demands.  c l a s s i f i e d into three categories:  Conceptually, models can  be  descriptive, predictive and normative.  Descriptive models simply represent an existing s i t u a t i o n .  Often they  are used to gain an understanding of a complex system through analysis of the component parts.  Descriptive models may  purpose of developing predictive models. causal tions.  also be employed f o r the  Predictive models, also called  or forecasting models, simulate future rather than current s i t u a Cause and e f f e c t relationships are demonstrated and  over time.  Impact analysis is an example of conditional  the consequences of a specified external otherwise undisturbed environment.  projected  prediction,  impact are predicted given an  Lastly, normative, or planning,  models are extensions of predictive modesl.  They are designed to predict  what range of performance i s acceptable in r e l a t i o n 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 i t s s i m p l i c i t y , i t s low cost and the quality  52  of data generally available. capacity of available data.  I t i s f u t i l e to design a model beyond the Although the economic base model may be  conceptually weak compared to other methods of impact analysis, i t i s r e l a t i v e l y cost e f f e c t i v e .  There are at least three accepted techniques or tools f o r undertaking economic impact analysis.  These are:  output, and income-expenditure analysis.  export base, input-  The following sections w i l l  discuss each of these theories as they may be applied to impact analysis.  Following this w i l l be an outline of the method of analysis pro-  posed f o r the study.  5.1.1  Economic Base Theory  Economic base theory i s 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 f i n a l demand.  The central idea i s that cer-  tain a c t i v i t i e s in a region lead and determine overall economic development.  These are called basic a c t i v i t i e s .  Other nonbasic a c t i v i t i e s are  consequences of the region's overall economic development.  Basic a c t i v i -  ties are those that produce goods or services f o r export outside the 1  region. reasoning  Basic a c t i v i t i e s bring income from the outside world.  The  i s , in a sense, that a region earns i t s wealth from the sale  of basic or export commodities to the outside world.  A l l other econo-  53  mic a c t i v i t i e s e x i s t as a result of the level of income and demand achieved within the region and therefore depend on basic a c 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)  i d e n t i f i c a t i o n of export or basic a c t i v i -  t i e s , (2) empirical determination  of the relationship between basic and  non-basic a c t i v i t i e s in the region (usually expressed in terms of an employment m u l t i p l i e r ) , (3) prediction of level of change in the basic sector (often this i s known), and subsequent calculation of impact on the non-basic sector, assuming the relationships i d e n t i f i e d in (2) remain  constant.  Operationally, the i n i t i a l  problem with the above method of  analysis i s distinguishing between basic and non-basic employment. There are at least four ways of drawing this d i s t i n c t i o n .  The f i r s t ,  and crudest, i s 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 commercial, local government, personal t i v i t i e s would be assigned  to the basic sector while  services and other similar ac-  to the non-basic category.  The obvious  flaw i n the above procedure i s that almost a l l firms or  establishments  in a region w i l l produce partly f o r export and partly f o r local consumption.  54  A second, and more sophisticated, approach in sorting out what is basic and non-basic is through location quotients.  A location quo-  t i e n t compares regional employment in a s p e c i f i c a c t i v i t y or category with the national average.  The implication being that surplus employ-  ment produces for export outside the region. also be constructed  A location quotient  may  by comparing percentage of national output (of an  a c t i v i t y ) to personal  income as a percent of the national t o t a l .  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 t h i r d method of categorizing economic a c t i v i t y i s actually measuring shipments of goods and services out of the region. information may  be next to impossible  to obtain however.  Detailed  In this event  a sample of firms in each category i s often surveyed to keep the project manageable.  Lastly a fourth approach to operationally defining basic and non-basic economic a c t i v i t y is known as the minimum requirements method. This approach involves selecting a large number of regions s i m i l a r to the one under study and computing the d i s t r i b u t i o n 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 requirements p r o f i l e .  The underlying assumption of this approach i s 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 basic an employment m u l t i p l i e r may  non-  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 i s basic the employment m u l t i p l i e r 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 base approach. to growth.  in the economic  For one, exports are considered to be the sole stimulus  The role of consumption in increased spending and the con-  cept of leakages in the economy are not e x p l i c i t l y considered.  Exports  are considered to be homogeneous in terms of their effects on the rest of the economy.  No treatment i s given the nature of the backward and  forward linkages and the subsequent industries.  employment in support or indirect  The constant r a t i o of base to service a c t i v i t y that follows  from the above s i m p l i f i c a t i o n i s u n r e a l i s t i c .  Not only i s this r a t i o  l i k e l y to be d i f f e r e n t 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 nonbasic i s a gross s i m p l i f i c a t i o n .  Although the impact of a job in the  coal industry with an income of $18,000 would c l e a r l y be d i f f e r e n t 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  i s an economic technique which e x p l i c i t l y focuses 4  on interdependences  among sectors of the economy.  of as a type of social accounting.  It can be thought  Much the same kind of approach i s used  as in systems of national income accounting in that double entry accounting i s the technique by which transactions between the region and external regions and among a c t i v i t i e s within the region are recorded. A l l 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 f i n a l product.  These  would be considered double counting in other social accounting procedures.  Transactions are recorded in dollars in order to document r e l a -  tionships in a common unit.  A c t i v i t i e s are categorized among the following major economic sectors: "Intermediate - private business a c t i v i t i e s within the region. The sector i s broken down into individual industries such as mining, food processing,;construction, or chemical products. 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 s e l l e r s (primarily of their own labour). Government - state, local and national public authorities, both within and outside the region.  It  57  Government - state, local and national public authorities, both within and outside the region. Outside world - a c t i v i t i e s (other than government) and i n d i viduals located outside the region. Capital - the stock of private c a p i t a l , including both fixed 5 capital and inventories."  A l l inter-industry relationships (sales and purchases) are displayed  in tables or matrices.  of three tables.  The standard input-output model consists  A transaction table records  basic data concerning  total flows of goods and services through a l l the sectors of the economy including intermediate in money terms. example.  and f i n a l demand.  Transactions  are recorded  It may be helpful to c l a r i f y the above with a simple  Suppose we have a four sector economy composed of agriculture,  manufacturing, services and households ( f i n a l demand). have sold the following:  Agriculture may  $20 to other firms in the agriculture sector,  $30 to manufacturing, $50 to firms in ther service sector and $25 to the household sector f o r a total output of $125.  Manufacturing may have pur-  chased inputs of $30 from agriculture, $50 from elsewhere within manufacturing, $20 from the service sector and $50 from the household sector ( i n the form of wages) f o r a total outlay of $150.  The transac-  tions table i s r e a l l y a descriptive account of the regional economy at a p a r t i c u l a r point in time.  58  TABLE 5.1 HYPOTHETICAL TRANSACTIONS TABLE  Purchasers  Intermediate Sales Agriculture Manufacutring  Sellers  Services  Final Sales Households  Total Outlay  Agriculture  20  30  50  25  125  Manufacturing  30  50  20  50  150  Services  45  10  30  40  125  Households  30  60  25  125  150  125  Total Outlay  A second table, the d i r e c t requirements table, shows the r e l a tive input purchases required by each processing put i t produces.  sector per unit of out-  This table, also knows as a technical c o e f f i c i e n t s  table, i s derived from the transactions  table.  Each individual entry  is arrived at by dividing that p a r t i c u l a r input by the total outlay of the sector concerned.  Using the same example to i l l u s t r a t e , the d i r e c t  requirements column for the manufacturing sector would read agriculture: 0.20; manufacturing: 0.33;  service: 0.06.  For every d o l l a r 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 l a s t table of the input-output a table of direct plus indirect requirements.  table i s known as  This table i s derived  from the c o e f f i c i e n t s table by matrix inversions.  The d i r e c t plus i n -  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 Agriculture  Manufacturing  Services  1.20  .30  .53  Manufacturing  .29  1.49  .21  Services  .45  .09  1.31  Input-output tables can be constructed at various levels of disaggregation  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 o f f between detail of analysis and costs to be incurred. In p a r t i c u l a r , input-output  studies are very data demanding.  data a v a i l a b i l i t y i s most often the bottleneck  in the study.  Hence, To com-  pensate for the heavy data requirements a number of r e s t r i c t i v e assumptions are necessary thus limiting.the v a l i d i t y of this approach. standard  assumptions include:  no multiproduct  industries, l i n e a r input  functions, no external economies, neglect of capital formation city variations.^  5.1.3  The  and capa-  1  Income-Expenditure Analysis  The  income-expenditure model can be represented  by some variation of the standard  Y = C+I+G+E equation.  mathematically One  modified  form of Keynesian analysis, the income/expenditure approach, has been t a i l o r e d to economic impact studies. the impact of a new  The model s p e c i f i c a l l y measures  or expanded a c t i v i t y 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 multip l i e r , the income/expenditure approach uses an income m u l t i p l i e r .  In one version of this model economic a c t i v i t y is conceptually 7 divided into d i r e c t , indirect and induced categories. Direct a c t i v i t y 1  is taken to be that of the new  enterprise or project.  a c t i v i t y attributed to firms in the region that s e l l  Indirect is that inputs to, or pur-  61  chase  outputs from, the new enterprise.  which i s attributed to consumption  Induced a c t i v i t y i s that  spending generated by wages and  salaries of direct and indirect employees.  The income m u l t i p l i e r es-  timates induced income given direct and indirect income generated to arrive at total regional income.  The relationship of d i r e c t , indirect  and induced a c t i v i t i e s is diagramatically represented in Figure 5.1.  Regional income i s increased by an amount greater than direct and indirect income because a portion of this income is spent l o c a l l y and retained in the economy in the form of wages, salaries and p r o f i t . Likewise, a certain proportion of these wages, salaries and p r o f i t s w i l l be spent l o c a l l y further increasing the regional income.  The mag-  nitude of this m u l t i p l i e r effect depends upon leakages in the economy which in turn depends upon the c h a r a c t e r i s t i c s of the population as well as the structure of the economy.  Leakage i s the process by which income i s l o s t from local economy.  This can occur through savings, non-local expenditures or non-local  taxation a l l of which take money out of local c i r c u l a t i o n .  Income not  l o s t from the economy through leakages i s divided between local and local consumption  expenditures.  taxation  Revenue of local government i s par-  t i a l l y retained as local income (wages and salaries and local expenditures on goods and services) and the remainder i s l o s t 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  1  Inputs (Imported)  Exported Production  Mine Projects  J  Inputs (locally supplied)  Direct Impact Labour Income!) Induced Impact .(Consumer Expenditure)  Service Industry Employment  63  in a way peculiar to the individual tastes and preferences of the population.  A certain proportion of income i s spent on food, clothing, transportation and so on.  This i s known as the expenditure pattern.  In each of the expenditures categories part of the income i s l o s t through leakages, part i s taxed by the local government and the remainder stays in the local area in the form of wages and s a l a r i e s .  Successive rounds of expenditures are generated by the proportion of local consumption expenditures and local government expenditures that i s captured l o c a l l y .  A relationship of this type i s mathematically  represented by the series k = l + r + r ^ + r ^ + . . . +  r o r k = 1 (1 - r,) n  where k i s the regional m u l t i p l i e r and r i s the proportion of expenditures captured l o c a l l y .  Therefore, total income generated in a regional  economy, Y^., equals k times the income generated by the new d i r e c t 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 m u l t i p l i e r follows.  ;  F i r s t , i t i s assumed that consumption, C, of local goods and services varies l i n e a r l y with disposable income: C = c  Q  + c-jY (1 - t  - t^)  where:  64  c  o  = constant  c-j = marginal propensity to consume locally-supplied Y = income t  n  commodities  \  = non-local taxes  t-j = local taxes i Secondly, i t i s 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 c  irig  = marginal propensity to import of the local consumer goods sector. = marginal propensity to import of local government  Thirdly, i t i s assumed that local government spending i s funct i o n a l l y related to revenues raised: G = t-jY + t C + R where: fa  t ^ = business tax revenue as a proportion of total  sales  R = senior government transfers  Fourthly, since R i s p o l i t i c a l l y determined in B.C. to be approximately $35 per person then: R = rP where: r = provincial grant per person  65  Lastly, population increase i s assumed to be functionally related to income: P = PQ + p-jY where PQ i s a constant, P, = marginal propensity f o r population to increase with local income  Combining assumptions one through f i v e , the local income mult i p l i e r can be stated as: k = 1 / 1 - c  5.1.4  1  1 + t ( l - m ) - m (l - t b  c  p  - t ^ - (t + r ]  P l  )(l -  Evaluation of the Models  Each of the three models discussed above has i t s l i m i t a t i o n s , both conceptually and p r a c t i c a l l y .  The economic base model, due to the  degree of aggregation, provides a f a i r l y non-basic sector.  crude measure of impact on the  However, i t i s attractive because the necessary data  is readily available.  Input-output would perhaps provide the most de-  t a i l e d analysis of the economy but the data requirements are costly and time consuming.  The income-expenditure  model i s more detailed than ex-  port-base but less so than input-output. fall  between the simple requirements  Likewise, data  requirements  of the export base model and the  demanding input-output model.  Time constraints and the expense of data c o l l e c t i o n e f f e c t i v e l y rule out input-output analysis for the purposes of this exercise.  This  e f f e c t i v e l y leaves a choice of economic base or income/expenditure  as  66  the model upon which the economic impact analysis i s to be based. income/expenditure approach was favoured f o r three main reasons. income i s a more sensitive unit of measure than i s employment.  The Firstly,  An impli-  c i t assumption in the economic base approach i s that a l l jobs are equivalent in t h e i r e f f e c t s .  This i s c l e a r l y not the case - the average d i r e c t  job may pay $18,000 while the average indirect only $12,000.  Secondly,  the degree of disaggregation permitted i s much greater i n the income/expenditure method.  This allows greater detail in assigning induced im-  pact to sectors of the local economy. e x p l i c i t l y recognizes leakages.  Thirdly, the income/expenditure  This i s p a r t i c u l a r l y relevant in a re-  gion such as the Northeast where leakage i s extremely high due to the small market size and poorly developed backward and forward linkages i n 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 nomy, Y  c  c  where Y_ i s the total income generated in a regional eco-  i s the income generated by the new d i r e c t a c t i v i t y and K i s  the m u l t i p l i e r . K = l-c(l+t  b  The m u l t i p l i e r can be derived as follows:  1 (1-mg) - m ) ( l - t - t ) - ( l - m ) ( r p l c  n  1  g  + tl)  The following discusses the parameters of the m u l t i p l i e r .  If  possible, the parameters are estimated for Chetwynd but i f data i s un-  67  available estimates are made on the basis of regional data or income group data.  C,] - The marginal propensity to consume l o c a l l y supplied commod i t i e s , i s considered to be a residual component of the total consumption after personal savings, non-local expenditures and local and nonlocal taxation. C-| = 0.657.  Expressed as a proportion of local disposable income,  What this means i s that f o r every additional d o l l a r of i n -  come 66<£ w i l l be spent l o c a l l y .  The value of s, t-j and t  from Family Expenditure Pattern data of S t a t i s t i c s Canada.  were obtained 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 v i l l a g e income exported outside the  local area.  I t i s estimated by examining the expenditure pattern of the  Village of Chetwynd.  The assumption i s 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. proximately 18% of the budget).  (Debt charges are ap-  68  M , the marginal  propensity to import of the local consumer  goods sector, must, in the absence of s p e c i f i c data, be estimated on the basis of the economic structure of the community. the value of the M_  to be 0.671  Davis estimated  in Prince George, a c i t y of 60,000.  That i s , 67% of the goods consumed are imported  9  by the service sector.  Obviously the value in Chetwynd would be higher than this due to a lower level of integration of the economy. timated to be  £  was  therefore es-  0.70.  Personal taxes B.C.  The value of M  comprise 0.136  urban areas of from 1,000  of average family expenditure in  - 29,999 population. ^ 1  Local taxes are  a small proportion of this since Chetwynd has a low m i l l rate. total 0.136 ing 0.106  an estimated 0.03  Of the  would be local taxes (t-j) and the remain-  would be non local taxation (t ).  Based on a provincial per capita grant of $35,000 and a marginal population/employment ratio of 2.7, rpl was  estimated to equal  0.01.  5.2  Population M u l t i p l i e r Methodology  Converting employment to population estimates involves two c r i t i c a l assumptions, one involving female p a r t i c i p a t i o n 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% the total population i s female and the average household  of  size i s 4 . I .  11  69  It may not be v a l i d to assume that these ratios w i l l remain constant i f major development takes place but newcomers to the community would exh i b i t c h a r a c t e r i s t i c s similar to resource or primary towns in B.C., least in the short run.  at  For example, the direct employment has been  t r a d i t i o n a l l y male orientated. Unless s p e c i f i c p o l i c i e s e f f e c t i v e l y promote the hiring of females, that sector of the labour force w i l l remain male dominated.  Typically inmigrants are younger and have a higher  proportion of singles than the existing population.  Therefore, i t i s  probably a closer approximation of r e a l i t y to assume that the characteri s t i c s of the in-migrant population w i l l be the same as those observed in B.C.  resource communities.  As a result the experience in other  B.C.  towns w i l l be r e l i e d on.  A model has been developed by Cornerstone Planning Group Limited to generate population estimates for the proposed new Tumbler Ridge,  (see Figure 5.2).  town at  In a model such as this certain as-  sumptions must be made and in this case assumptions are based on results from studies of s i m i l a r B.C.  resource towns.  Sex d i s t r i b u t i o n of d i r e c t  employees i s assumed to be 91% male and 9% female based on current employment practises in similar projects in the Kootenays rather than desired or optimum hiring p o l i c i e s .  Marital c h a r a c t e r i s t i c s of d i r e c t  employees are assumed to be the following: ried; female:  male: 37% s i n g l e , 63% mar-  4% separated, 19% single, 77% married and assumed to be  married to d i r e c t or service sector employees. i s t i c s are assumed to be as follows:  Family size character-  single male, 1.0, married (male  70  FIGURE 5.2  POPULATION MODEL  Di rect Employees j  Single 37%  Married 63%  Service Sector Employees  peparated 4%  Single 19%  Single 37%  Total Population Associated with Direct Employees  (Separated 4%  Total Population Associated with Service Sector Employees  Total Population Associated with Direct and Service Sector Employees  Source:  Married 63%  Cornerstone Planning Group Limited, 1977  Single 19%  71  or female), 3.8, separated female, 2.8 and single female 1.0.  Females  married to male employees are accounted f o r in the 3.8 persons per family assigned to married male employees.  The sex d i s t r i b u t i o n of service sector employees i s assumed to be 60% male and 40% female.  Marital characteristics and family size  characteristics of service sector employees i s assumed to be the same as those f o r d i r e c t  employees.  Population i s expected to increase at a rate of 2% per year due to natural increase.  This high rate of annual increase i s j u s t i 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.) i s a procedure f o r anticipating the unintentional conse12 quences of purposive social action. tainty in the planning process.  I t i s a means of reducing uncer-  Implicitly the intention i s to fore-  s t a l l 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. this i s not the case.  Unfortunately  The f i e l d of S.I.A. i s best characterized by i t s  72  practioners and what they study than by any d i s t i n c t theoretical pers13 pectives.  In this respect S.I.A. methodology i s at a comparable  stage of development with economic impact assessment. ends here however.  The s i m i l a r i t y  Whereas there appears to be research efforts in  progress to develop methods firmly grounded i n economic theory f o r identify!' 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 i t s systematic theoretical development." Although there i s a lack of established methodology and expert i s e with respect to S.I.A., this does not mean that conventional social research methodologies are not applicable.  A l l 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, i n s t i t u t i o n a l analysis, value analysis, multivariate analysis, social network analysis, social forecasting, and matrix 15 methodologies.  The a r t of designing a social impact study l i e s in  coordinating these diverse methodologies in a manner that y i e l d s the desired result f o r a p a r t i c u l a r study.  A review of the l i t e r a t u r e re-  veals that many research efforts are directed towards a s p e c i f i c s i t u 16 ation or case sutdy,  while others study S.I.A. methodology in the  most general of t e r m s .  17  The state of the a r t i s that social impact  assessment methodology has developed only to the point of determining  73  what questions to ask and which variables are s i g n i f i c a n t .  When the  relevant variables have been determined techniques such as those l i s t e d 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 a v a i l a b i l i t y or other resource constraints.  Identification of the consequences of a social action i s complicated by the complex nature of social interactions between the agents of change and those members of the society that are affected. is depicted  in Figure 5.3  below.  The  process  In this interactive model of social  impact social factors are as much a cause of the impact as they are the e f f e c t s .  "Instead of assuming that the social e f f e c t i s the re-  sult of a s p e c i f i c cause or chain of causes. . . we think of an  effect  FIGURE 5.3 INTERACTIVE MODEL OF SOCIAL IMPACT  EXOGENOUS FACTORS -(6 HISTORY  "(4)  PROJECT  IMPACT i  Source  Wolf 1974  p. 11  <2y  ADAPTATION  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 d i r e c t impact (1) is the i n i t i a l change in the i d e n t i f i e d variables. t i a l response by the impacted units.  Francis  19  Step (2) i s the i n i -  (1975), Olsen  20  , and  others have noted that this response i s d i f f e r e n t i a l , that i s , referent groups must be i d e n t i f i e d because what i s 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 response to public opposition. step (3).  This p o s s i b i l i t y i s represented by  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 process further i n terms of estimating the impact of the project.  A typical impact study proceeds in steps as outlined below. A p r o f i l e of the referent region or community i s prepared. l i n e for l a t e r comparison includes a description of a l l variables.  This base-  the s a l i e n t  The level of detail of the p r o f i l e w i l l vary according to  the s p e c i f i c needs of the study but the variables may be grouped into six general categories of impact:  displacement and relocation, demogra21  phic, i n s t i t u t i o n a l , economic, community cohesion, and l i f e s t y l e s . The i d e n t i f i c a t i o n of d i f f e r e n t i a l groups and the spatial dimensions of the p r o f i l e are c r i t i c a l because what i s 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 c o s t s .  2 2  FIGURE 5.4 IMPACT ASSESSMENT STEPS WITHOUT PROJECT PROJECTION  PROFILE  Source  Wolf 1974,  The future.  WITH PROJECT PROJECTION  IDENTIFY SIGNIFICANT IMPACTS  DESCRIBE AND DISPLAY  EVALUATE  p. 21.  next step i s to project the variable performance into the  The time frame w i l l depend upon the s p e c i f i c requirements of  the study but i t must be long enough to cover the time lag between the 23 imposition  of costs and the r e a l i z a t i o n of the benefits.  This pro-  jected end state of the system i s compared to a second projection of the variables with the project included to y i e l d an objective estimate of magnitude o f impact.  These results are interpreted for second-order  consequences and may be evaluated in terms of policy goals and objectives . The art of projecting or forecasting i s s t i l l  in the early  24 stages of i t s development. be recognized.  The limitations of this technique must  Futures forecasting i s based e x p l i c i t l y or i m p l i c i t l y  on models which are subsets of r e a l i t y .  Certain factors or variables  are assumed to represent the total system and a l l variation i n the system  i s assumed to be explained  by the interrelationships of these  76  variables.  As a r e s u l t , predictions are e s s e n t i a l l y estimations of  future parameter performance based on past parameter development and 25 the present state-of-the-art of prediction.  In r e a l i t y at least a  portion of the total change in the system w i l l be due to variables  ex-  cluded from the analysis for the sake of s i m p l i c i t y 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  Thus, a so c a l l e d  model i s concerned with.  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 To i l l u s t r a t e t h i s , suppose a system i s represented by 20 key and each of these variables could be projected  admission. variables  10 years into the  with a probability of 0.8.  The probability of the predicted end 20 actually being correct would be 0.8 or approximately 0.012.  future state  As a concluding thought i t is useful to remember what the purpose of a forecast i s in a planning context. r e a l l y only decision making aids.  Forecasting  techniques are  Of primary importance is the a b i l i t y  to d i f f e r e n t i a t e between alternative courses of action.  Planners design  alternative futures which are f e a s i b l e and then i d e n t i f y policy i n s t r u ments which increase the probability of r e a l i z a t i o n 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 s a t i s f i e s this c r i t e r i o n i s the extent to which i t is useful to planners.  77  5.4  Notes to Section 5.0  1.  See f o r 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 A c t i v i t y ; C. Garrison, The Impact of New Industry:  An Application of  the Economic Base M u l t i p l i e r 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 Vancouver Economy, p. 1.  5.  E.M. Hoover, An Introduction to Regional  6.  H.W.  7.  C. Davis, Assessing the Impact of a New Firm on a Small  Richardson, Elements of Regional  Regional  Economics, p. 223.  Economics, p. 142. Scale  Economy.  8.  For the original discussion see Davis, op. c i t .  9.  Davis, Ibid.  10. S t a t i s t i c s Canada, Family Expenditure  Patterns.  11. Environment and Land Use Committee Secretariat, B.C. Towns Study. 12. C P . Wolf, Social Impact Assessment:  The State of the A r t ,  p. 3. 13. Mark Shields, Grounded Theory Construction in Social Assessment, p. 64. 14.  Ibid.  Impact  78  15. C P . 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 f o r Conducting Social Impact Assessment, Using Quality of L i f e Social Indicators; Mark Shields, Social Impact Studies, An Expository Analysis; C P . 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 f o r 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 i s outlined in this section.  The economic indicators to be considered are employment, i n -  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 d i r e c t , indirect and induced a c t i v i t y . 6.0).  (See Table  A further d i s t i n c t i o n is made between the temporary construction  phase and the operations phase.  Following this f i v e p r o f i l e s covering  the entire range of development p o s s i b i l i t i e s are presented.  Within  each p r o f i l e is included a discussion of the economic implications implied by that level of development.  Lastly, the impact of each p r o f i l e  is summarized including a geographical d i s t r i b u t i o n 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 . employment and income) on the local economy associated with or due to, the coal developments in question.  In other words i t i s simply the number  of new jobs created in the development and the resulting wage b i l l .  80  The projected manpower build-ups f o r each development have been presented above.  This section looks at the d i r e c t effects of these  developments.  TABLE 6.0 DEFINITIONS, DIRECT, INDIRECT AND M- = E-  +  E  L  +  INDUCED IMPACT  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 f i n a l 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 i n d i r e c t l y 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. Energy and Mines, (Ottawa, 1970).  44  81  The f i r s t step in determining  the total d i r e c t 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 examine existing coal operations in B.C.  to  ( i . e . Fording & Kaiser) and  combine this with communications with company o f f i c i a l s to obtain averages for the coal industry.  Wage rates are estimated from union agree-  ments and escalated according to A n t i - I n f l a t i o n Board Guidelines.  To  keep the analysis manageable, occupational categories w i l l be limited to:  supervisory and c l e r i c a l  (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 w i l l  ment^  be used in the study.  Qunitette has projected the following breakdown at f u l l  employ-  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%.  as  Employment by occupation  at Fording Coal (1975) was  3 follows: administration, 18%; mining, 68%; preparation, 14%. The Manpower Subcommittee gives the following breakdown based on various 4 c o l l e c t i v e agreements in the industry: 65%; preparation,  15%.  administration, 20%; mining,  82  In summary, administrative or supervisory and c l e r i c a l 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 y i e l d s figures of 17% administrative, 69% mining (including maintenance) and 14% preparation.  If we assume 35% of mining manpower  could be c l a s s i f i e d as maintenance personnel (based on data from Denison Mines) our f i n a l breakdown i s 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. average for the industry was  $15,500 in 1975,  The  overall  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  rates for workers in the preparation  and underground rates as do  plants.  It is more d i f f i c u l t to arrive at an estimate for administrative s t a f f as only a portion of these employees are unionized, and there is considerable variation within this category. earnings are in 1977  dollars.  A l l estimates of yearly  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 i s available the assumption w i l l be made that W.C.T. employees w i l l be paid at a rate comparable to underground coal miners.  Earnings of construction workers were not derived  from union rates because overtime and seasonal e f f e c t i n such situations.  shutdowns can have an  An a r b i t r a r y assumption has been made  that construction workers w i l l average $18,000 per annum.  A number of assumptions must be made in order to determine the d i r e c t impact of the construction phase. housed i n construction camps.  Most of the workers w i l l be  From a regional perspective the d i r e c t  impact could be the same as the impact of an operational workforce except f o r the fact that the impact would be short term rather than long term in duration.  The d i f f i c u l t y arises in assessing the impact on the  various communities.  For example, even though i t i s to be expected  84  that most employees w i l l  be housed in the camps, a certain number w i l l  probably choose to l i v e in one of the existing communities.  Any e s t i -  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 i s their intention that a l l construction workers be housed in camps to minimize disruptive impacts on communities in the region.  However, experience with other  major developments in B.C. suggests that approximately 15% of married workers would choose to l i v e in town.  Based on this experience the  assumption i s made that 10% of the construction work force w i l l  locate  in existing communities.  6.1.2  Indirect Impact  The indirect impact of a project is the impact due to the i n creased a c t i v i t y of firms in the region which s e l l  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 i n d i r e c t impact i t i s important to distinguish between open p i t and underground mines during both the construction and operation phases.  Of course, in both open p i t and underground developments the  actual costs and input requirements w i l l depend on s i t e s p e c i f i c conditions.  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  d i s t r i b u t i o n of the i n d i r e c t  impact by examining the c a p a b i l i t i e s of the various communities in the Region to supply the equipment and/or materials needed.  There are f i v e categories of potential indirect impact. are:  These  mine preparation, mine equipment, preparation f a c i l i t i e s , mine-  s i t e infrastructure and o f f s i t e infrastructure. The f i r s t four categories can be attributed to the construction phase while the categories of o f f s i t e infrastructure and  (to a lesser extent) mine equipment are  applicable to the operations phase.  The cost of pre-production  or preparation a c t i v i t y varies mainly  with mine size and stripping r a t i o in the case of open p i t 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 s i t e s p e c i f i c 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 s i g n i f i c a n t l y  among these mining methods.  Equipment needs during the construction phase include both developmental needs and start-up needs.  Start-up equipment i s included  in the construction phase rather than the operations phase because i t is a "one-shot" e f f o r t that precedes production. however, is included in the operations phase.  Equipment replacement  86  Approximately 80% of the investment in mining equipment f o r an open p i t operation i s f o r shovels, loaders and t r u c k s .  7  This involves  waste trucks and shovesl i n the preproduction stage and coal trucks and shovels for the operation phase.  Equipment requirements f o r 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 s p e c i f i c requirements vary with seam  thickness and other s i t e conditions as well as level of production.  Preparation f a c i l i t i e s b a s i c a l l y 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 s p e c i f i c q u a l i t i e s of the coal ( i . e . the washability).  Preparation f a c i l i t i e s would e s s e n t i a l l y be the same f o r open p i t and underground operations.  Minesite infrastructure includes the o f f i c e s , warehouses, repairshops, power l i n e s , etc.  The type of input required here i s the  various construction materials such as metals, concrete, lumber, etc. O f f s i t e infrastructure includes access road, spur lines and other communication  links.  Taking the local economy into account i t i s l i k e l y that only a small amount of the capital expenditures locally.  of the mines would be captured  This i s p a r t i c u l a r l y true of heavy equipment which comprises  87  such a large proportion of a coal mines capital expenditures. doubtful that the N.E.  region could capture much of this  It is  expenditure.  Likewise for underground mines the d r i l l i n g equipment is too highly specialized to be supplied l o c a l l y .  Even replacement parts or d r i l l i n g  b i t s , etc. would more l i k e l y 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, l i s t e d the f o l -  lowing commodities and services as those l i k e l y to be purchased l o c a l l y Q by the mine in the Kootenay region,  small vehicle and equipment pur-  chases, ( f u e l , o i l , grease, t i r e s , e t c . ) , steel f a b r i c a t i o n , vehicle maintenance, vehicle and equipment rentals, o f f i c e supplies and ment rentals, and general  equip-  trades and services ( i . e . carpenters, painters,  e l e c t r i c i a n s , sand, gravel, t o p s o i l , lumber, etc.).  Given the  circum-  stances of the Northeast i t is assumed the same types of commodities and services as above w i l l p o t e n t i a l l y be supplied l o c a l l y .  To this  l i s t must be added the impact due to residential construction, government spending on land servicing i n s t i t u t i o n a l buildings and services, and commercial expansion.  The key question is what proportion of total mine fall  into the above categories.  expenditures  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 i s 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 d e f i n i t e knowledge on their purchasing requirements purchasing patterns.  or  B.C. Research estimated indirect employment to 9  amount to 5% of the direct workforce. assumption  However, this i s an arbitrary  and i s 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. lack of information rules this approach out.  However  The degree of uncertainty  surrounding expenditure patterns i s too great for the analysis to be carried out acceptably in this fashion.  Instead, the approach w i l l  be  to estimate an indirect employment m u l t i p l i e r on the basis of the capacity of the region to supply commodities and services required in the operation and construction phases. 0.05  and 0.10  respectively.  These have been estimated at  Although subject to the limitations dis-  cussed above these estimates are the best available to the author.  The  corresponding income impact i s estimated to average $16,000 per job based on average weekly wage data from S t a t i s t i c s Canada f o r various industry groups in B.C. 6.1.3  Induced Impact  The induced impact may  be defined as that impact due to econo-  mic a c t i v i t y generated by the consumption spending from the income of  89  those d i r e c t l y and  i n d i r e c t l y employed.  The  IU  induced impact w i l l  be  measured using the income expenditure approach.  Inserting 1.255  these values into the m u l t i p l i e r equation a value of  is reached for k.  Conversion of the income m u l t i p l i e r to an employ-  ment m u l t i p l i e r is accomplished by multiplying  the direct and  wage b i l l by k, adjusting this to r e f l e c t p r o f i t s , and figure by the average service sector wage. yields an employment m u l t i p l i e r of 1.43. economic base m u l t i p l i e r of 1.77  6.1.4  dividing this  In this study the conversion  This compares with the observed  in Chetwynd.^  Geographic Distribution of Impacts  The of how  indirect  d i s t r i b u t i o n of benefits  and where the benefits  is a major concern.  of coal development are to be  is d i f f i c u l t to answer precisely and  question  distributed  requires a number of assumptions.  For the most part Tumbler Ridge, Chetwynd and w i l l be receiving  The  the great majority of the benefits  Hudson's Hope  of d i r e c t impact  as they would be the principal communities in terms of meeting housing requirements.  Distribution of indirect benefits purchasing patterns of the mines. the existing economic structure  is primarily determined by  This of course w i l l  of the region.  the mines w i l l not be available in the region.  be influenced  by  Many of the inputs to This is especially true  of inputs during the operating phase which are largely comprised of specialized machinery.  There i s greater potential  during the construction  90  phase although this phase is of limited duration.  Heavy machinery w i l l  probably be mostly purchased through Vancouver or Edmonton. equipment and machinery may  Smaller  be supplied from regional d i s t r i b u t o r s .  Dawson Creek, of a l l Northeastern communities would be best able to capture some of these benefits.  Only a limited portion of the i n d i r e c t  benefits w i l l accrue to the lower order centres, Chetwynd and Hudson's Hope.  These centres w i l l be capable of supplying  some inputs such as  f u e l , t i r e s , repair service but these w i l l not be of a great magnitude.  Indirect benefits to the region appear to be limited because of the nature of the coal industry and i t s 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 d i v e r s i f i c a t i o n of the regional economy.  To capture this potential requires  consideration by the Government and the coal companies.  explicit  A policy of  buying regional goods and services wherever possible would produce considerable regional benefit.  The remaining category of impact, induced, w i l l be distributed according  to the geographical  indirect labour forces.  consumption patterns of the d i r e c t and  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  such as Chetwynd and Hudson's Hope do not provide the f u l l  centres range and  variety of selection of goods and services that workers desire.  As a  91  result income w i l l leak from the local area to the extent that people shop in other communities.  A good portion of this consumption w i l l  accrue to Dawson Creek because of i t s well developed vice c e l l .  commercial ser-  A further portion w i l l be captured outside the region in  centres such as Grande P r a i r i e , Prince George, Edmonton and Vancouver.  6.2  Development Profiles  In order to e f f e c t i v e l y cover the entire p o s s i b i l i t i e s a scenarios approach i s u t i l i z e d .  range of development Five development pro-  f i l e s are presented ranging from minimal development scenario to a maximum development scenario.  The choice of p r o f i l e s was made to comple-  ment development scenarios generated f i l e s are arranged  i n the N.E. Coal Study.  roughly in order of their probability  The pro-  of occurence.  It should be noted that this ranking i s based on the considered judgment of the author as to the timing of the various developments.  6.2.1  P r o f i l e I - B.P., Sukunka, Bullmoose and Quintette, Babcock, Murray  P r o f i l e I represents the scenario currently the focus o f government policy.  P r o f i l e 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 m i l l i o n tonnes in 1986, this p r o f i l e assumes considerably  92  brighter market conditions than either p r o f i l e s 2 or 3. Babcock/Murray  Coal from  i s to be shipped by r a i l d i r e c t l y 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 s h i f t s to a plant s i t e 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 i n -  cluded in this p r o f i l e 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 w i l l be temporarily housed in camps until the townsite i s ready for occupancy, around 1982.  The existence of Tumbler Ridge w i l l  affect the housing plans of B.P. Tumbler Ridge i s closer to the operations than i s Chetwynd.  B.P. w i l l have an economic incentive in the  form of reduced cost of commuting to promote the location of their ployees in Tumbler Ridge.  em-  It i s assumed that once the temporary wash  plant i s removed and a permanent f a c i l i t y operational, the focus of their operations w i l l s h i f t from Chetwynd to Tumbler Ridge.  In this  analysis i t w i l l be assumed that a l l employees hired up to 1982 w i l l locate in Chetwynd and those hired from 1983 on w i l l locate in Tumbler Ridge as from this time forward Sukunka coal i s to be shiffed v i a r a i l in conjunction with Quintette coal. "east side" option.  This mine alignment i s known as the  93  Employment build-up proceeds rapidly in this p r o f i l e . construction employment rises from 183 in 1978 reaches a maximum of 4,347 in 1987.  to 3,118  in 1982  salaries.  town increases rapidly from an  300 housed in a temporary camp in 1979 in 1985.  A maximum of approximately  and  This results in a regional income  increment of $69 m i l l i o n (1977 dollars) annually in wages and  Population of the new  Non-  to over 6,000 in 1982  initial and about 8,000  16,500 i s reached from 1987 and  on-  ward.  Up until 1982  the impact on the Village of Chetwynd i s the same  as in other p r o f i l e s in which a new workforce of approximately  town i s not assumed.  A permanent  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 o f f however, as some workers would undoubtedly choose Tumbler Ridge because of the shorter commuting distance. Chetwynd w i l l f u l l f i l l  Since  a role as a sub-regional service centre the as-  sumption i s made that losses due to coal employees relocating in Tumbler Ridge w i l l be approximately  cancelled by service sector gains due to i n -  creased a c t i v i t y in the region. stages of the new  This should hold at least in the early  town's history.  Construction impact is considerable in this p r o f i l e . 5,510  man years throughout 1978  to 1985  injecting close to $100  into the regional economy in d i r e c t wages.  Some million  The peak year is 1980 when  a workforce of 980 i s required at the Sukunka and Quintette s i t e s .  IMPACT SUMMARY, PROFILE 1;  Table 6.1  B.P. SUKUNKA/BULLMOOSE QUINTETTE BABCOCK/MURRAY  1978  1979  1980  1981  1982  1983  1984  1985  1986  1987  1988  1989  1990  1991  1992  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  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  OUTPUT (Tonnes): B.P. Quintette EMPLOYMENT: 600  950  980  830  795  795  330  230  50  210  373  1280  1984  2200  2440  2620  2800  2900  2900  2900  • 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  3517  4047  4199  4197  4347  4347 . 4347  4347  4347  4347  10800  17100  17640  14940  14310  14310  5940  910  3822  6789  23296  36109  40040  44408  52780  1008  1696  1872  2352  2864  3040  2480  779  1879  2711  7057  10505  11573  13497  24497  29012  47645  63788  Construction DIrect Indirect  INCOME:  1  3913  2900 ' 2900  2900  (000's)'  Construction 01rect Indirect^ Induced* Total  4140 47684 50960. 52780  52780  52780  52780  52780  2240  2320  2320  2320  2320  2320  2320  12345  13146 13832  14326  14326  14326  14326  14326  14326  68963  65173  67434 67032  69426  69426  69426  69426  69426  69426  2464  POPULATION: Total  Increment  Chetwynd Tumbler Ridge  535  1339  1918  4950  7355  8101  8625  9182  9653  9998  9998  9998  9998  9998  9998  2022  2516  2637  2637  3233  2888  2888  2888  2888  2888  2888  2888  2888  2888  2888  2313  4122  5213  5737  6294  6765  7110  7110  7110  7110  7110  7110  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. 1) the induced employment m u l t i p l i e r i s d e 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 j o b s and d i v i d i n g by the average wage o f 2) t h a t 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 o f 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 / a v e r a g e wage o f t h a t s e c t o r , a p p r o x i m a t e l y $16,000/year. 1. 2.  c o n s t r u c t i o n workers i n camps a r e excluded workers. demographic assumptions:  these a r e 80% o f a l l  91% male 9% f e m a l e - s e r v i c e s e c t o r 60b male 40% female, m a r i t a l s t a t u s : d i r e c t w o r k f o r c e : male 37% s i n g l e 63% m a r r i e d - s e r v i c e s e c t o r 37% s i n g l e 63% m a r r i e d f a m i l y s i z e ! s i n g l e male ( 1 . 0 ) , married male o r female (3.8), s e p a r a t e d female ( 2 . 8 ) , s i n g l e female ( 1 . 0 ) .  . sex: d i r e c t w o r k f o r c e  95  6.2.2  P r o f i l e 2 - B.P. Sukunka, "West Side" Option  In this p r o f i l e partial development of Sukunka/Bullmoose i s the only coal development that takes place.  Production is limited to a max-  imum of 2.0 m i l l i o n tonnes per year reached in 1984 and remains constant at this level u n t i l the year 2004.  A l l coal i s transported through the  Sukunka Valley, o r i g i n a l l y 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 production remains at 2.0 m i l l i o n tonnes per year from 1984 onwards and direct employment reaches 920 i n 1985 and remains at this level the year 2004.  until  In addition to B.P.'s coal development the W.C.T. gas  plant i s included in this p r o f i l e .  Operating employment i s as described  in Section 3.6.1.  P r o f i l e 2 maintains maximum f l e x i b i l i t y .  Compared to other op-  tions the infrastructure requirements are s l i g h t , mainly r a i l and highway improvements.  Coal would be shipped by r a i l to existing  facilities  in North Vancouver (Neptune Terminals) and workers located i n Chetwynd. This compares to the costly alternatives of building major new port f a c i l i t i e s at Ridley Island near Prince Rupert and a new townsite at Tumbler Ridge. can  However, i f , at a l a t e r date, the situation warrants i t , output  be increased to 3.0 m i l l i o n tonnes per year and the f a c i l i t i e s at  Ridley Island and Tumbler Ridge used.  This would l i k e l y be contingent  96  on at least one other major development such as Quintette taking place in order to j u s t i f y the expense of the additional infrastructure.  Chetwynd is the only community that is d i r e c t l y impacted in this p r o f i l e .  The assumption has been made that a new  town w i l l not be  b u i l t unless Quintette's Babcock and Murray properties are exploited. Direct employment in this p r o f i l e 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. f i c a n t increases occur in 1978 1984  (242 new jobs).  (783 new jobs), 1982  (322 new  Signi-  jobs), and  At the peak the d i s t r i b u t i o n of jobs is as follows:  d i r e c t sector, 970; support i n d u s t r i e s , 49; and the induced sector, 436. The resulting income increment to the regional economy reaches a maximum of around $27 m i l l i o n (1977 d o l l a r s ) once peak employment i s reached.  Population generated by development totals 3,347 i n this p r o f i l e , 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 i s a growth rate  of nearly 29% per year.  Construction a c t i v i t y is a major impact component in the early years of p r o f i l e I.  The peak construction workforce is 600 in  and this declines to 200 in 1984  and 0 in 1985.  1978  Altogether some 2,335  man years of employment are created in the region with an associated  TABLE 6.2  IMPACT SUMMARY, PROFILE 2  1978  1979  1980  1981  600  475  230  50  210  290  1982  1983  1984  230  300  300  200  290  450  550 58  1985  1986  1987  1988  1989  1990  1991  1992  790  970  970  970  970  970  970  980  970  60  49  49  49  49  49  49  49  49  EMPLOYMENT: Construction 01 r e c t Indirect  ^'  63  58  38  Induced  <>  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  2  Total  INCOME: Direct  Indirect Induced Total POPULATION: Increment  1. 2.  53  (ooo's)  Construction  Total  38  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 Impact Chetwynd (5) 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  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. 1) the i n d u c e d employment m u l t i p l i e r i s d e 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 j o b s and d i v i d i n g by the average wage o f 2) t h a t 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 o f 0.05 i s developed i n s e c t i o n 6.1.3. 4. the i n d u c e d 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 / a v e r a g e wage o f t h a t s e c t o r , a p p r o x i m a t e l y $16,000/year.  c o n s t r u c t i o n workers i n camps are e x c l u d e d : workers. demographic assumptions: . sex: d i r e c t workforce:  these a r e 80% o f a l l  91% male 9% f e m a l e - s e r v i c e s e c t o r 605 male 40% female. . m a r i t a l s t a t u s : d i r e c t w o r k f o r c e : male 37% s i n g l e 63% m a r r i e d - s e r v i c e s e c t o r 37% s i n g l e 63% m a r r i e d f a m i l y s i z e ! s i n g l e male ( 1 . 0 ) , m a r r i e d male o r female 3.8), s e p a r a t e d female ( 2 . 8 ) , s i n g l e female ( 1 . 0 ) .  98  wage b i l l of about $42 m i l l i o n (1977) in t o t a l .  Most of the workers  w i l l be housed in camps located outside existing communities reducing disruptive influences on Chetwynd and other communities.  6.2.3  P r o f i l e 3 - B.P.  Sukunka 2  This p r o f i l e d i f f e r s from P r o f i l e 2 only in that output i n creases to 3.0 m i l l i o n 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 beginning in 1984 year.  after production reaches a level of 2.0 m i l l i o n tonnes per  O r i g i n a l l y , coal i s trucked to Chetwynd but beginning in 1984  i t w i l l be shipped via r a i l spur d i r e c t l y from the minesite.  There i s some uncertainty, surrounding townsite location. alternatives are major expansion Valley.  of Chetwynd or a new  The  town in the Sukunka  On the one hand the commuting distance from Chetwynd approaches  the maximum feasible l i m i t but on the other hand i t is questionable i f a d i r e c t workforce of 1,100  j u s t i f i e s the expense of a new town.  P r o f i l e 3 represents the maximum possible impact on the V i l l a g e of Chetwynd assuming a new  town i s not b u i l t .  Chetwynd could reach a  total population of around 5400 by the year 1986.  This population i n -  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.  IMPACT SUMMARY, PROFILE 3  TABLE 6.3  EMPLOYMENT: Construction Di r e c t  1981  1982  1983  1984  1985  1986  1987  1988  1989  1990  1991  1992  1150  600  475  230  230  300  300  200  100  50  210  290  290  450  550  790  970  1150  1150  1150  1150  1150  1150  53  58  60  59  58  58  58  58  58  58  58  Indirect'^  63  58  38  38  132  149  149  226  271  371  444  517  517  517  517  517  517  517  Induced' '  70 783  875  707  707  1029  1179  1421  1493  1725  1725  1725  1725  1725  1725  1725  4140  4140  5400  5278  5278  2  Total  INCOME:  (ooo's)  Construction D1rect Indirect' ' 3  1008  928  Induced'*' Total POPULATION (5) Increment Chetwynd  1. 2  1980  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. the i n d u c e d employment m u l t i p l i e r i s d e 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 j o b s and d i v i d i n g by the average wage o f t h a t 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 o f 0.05 i s developed i n s e c t i o n 6.1.3. 4. the i n d u c e d 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 v e r a g e wage o f t h a t s e c t o r , a p p r o x i m a t e l y $16,000/year.  5400 3600 1800 20930 20930 8190 10010 14378 17654 20930 20930 20930 20930 20930 928 928 928 928 928 928 928 944 960 928 848 5683 5683 2490 2984 4081 4882 5683 5683 5683 5683 5683  608  608  1638  1938  1150  1150  1746  2091  2854  3411  3968  3968  3968  3968  3968  3968  3968  2637  3233  3578  4341  4834  5455  5455  5455  5455  5455  5455  5455  27541 27541 27541 11664 11664 16928 19322 23119 25280 27541 27541 27541 27541  2637  5.  1) 2)  c o n s t r u c t i o n workers 1n camps a r e e x c l u d e d : workers. demographic assumptions: sex:  '  9 e s  d i r e c t workforce:  these a r e 80% o f a l l  91% male 9% f e m a l e - s e r v i c e s e c t o r 60S male 40% female. . m a r i t a l s t a t u s : d i r e c t w o r k f o r c e : male 37% s i n g l e 63% m a r r i e d - s e r v i c e s e c t o r 37% s i n g l e 63% m a r r i e d . f a m i l y s i z e ! s i n g l e male ( 1 . 0 ) , m a r r i e d male o r female (3.8), s e p a r a t e d female ( 2 . 8 ) , s i n g l e female ( 1 . 0 ) .  TOO  At the peak operating l e v e l , reached i n 1986, there w i l l 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 m i l l i o n annually (1977 d o l l a r s ) .  Construction a c t i v i t y i s also s i g n i f i c a n t  in p r o f i l e 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 m i l l i o n dollars.  in 1977  The assumption i s made that only 10% of the workforce w i l l  choose to l i v e outside construction camps thus minimizing this potential impact on Chetwynd.  6.2.4  P r o f i l e 4 - Quintette, Sukunka and Cinnabar  P r o f i l e 4 d i f f e r s from e a r l i e r p r o f i l e s not only in the i n c l u sion of Cinnabar but also in the timing of Quintette. the Babcock/Murray property i s delayed until 1985.  Production from  The Production  sche-  dule f o r Sukunka i s basically the same as in P r o f i l e 1 and 3 and the shipping pattern i s the same as in P r o f i l e 1.  The townsite needs w i l l  be met in Chetwynd, however, as the delay of the Quintette project w i l l hold up construction on the townsite f i v e years.  Cinnabar comes on stream in 1984, in this p r o f i l e , reaching f u l l production of 0.5 m i l l i o n tonnes in 1985.  The f e a s i b i l i t y of this  101  development i s at least partly contingent on the establishment of an agreement with B.P. for use of the Chetwynd wash plant in 1983, B.P. establishes a permanent f a c i l i t y .  after  Since Cinnabar i s located be-  tween the established centres of Hudson's Hope and Chetwynd, i t i s assumed that 50% of the housing requirements w i l l be met in each community.  Employment buildup i s f a i r l y regular throughout except for the period between 1983 to 1987.  Buildup during this period i s very rapid  because both Cinnabar and Quintette s t a r t up during this time.  Employ-  ment peaks in 1988 at a level of 5,052 but levels o f f to 4,603 in 1992 and onwards.  This carries an annual regional income increment of $73  m i l l i o n , almost half of which w i l l accrue to Tumbler Ridge.  As can be expected, the population generated by the developments in this p r o f i l e i s s i g n i f i c a n t .  Regional growth i s about 10,600  over the 15 year period under consideration. mum (not  Chetwynd reaches a maxi-  population of 5,700 in 1986 and remains at this level thereafter 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 a c t i v i t y involved in P r o f i l e 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  IMPACT SUMMARY, PROFILE 4  TABLE 6.4  1987  1338  1369  5052  4621  4621  4467  4603  495  130  130  2864  2980  2980  38  38  53  73  124  157  176  193  199  132  149  149  226  283  471  630  1090  1326  783  875  707  707  1029  1355  2280  2970  4186  4878  10800  8550  4140  4140  910  3822  5278  5278  Induced' '  70  (ooo's)  Indirect' '  1008  928  608  608  Induced'*'  779  1457  1638  1638  3  1349  495  2320  Indirect' '  Direct  1349  600  1233  58  Construction  154  1378  950  910  63  INCOME:  149  775  550  290  Total  3080  162  450  450  230  210  2  2980  162  300  290  475  50 1  2980  230  600  1981  EMPLOYMENT: Direct  1992  5400 8100 13950 17100 10800 8910 8910 2340 2340 8190 10010 16562 22441 42224 52125 54236 54236 54236 54236 55440 848 1168 1984 2512 2816 3088 3184 2592 2592 2384 "2464 2490 3117 5185 6932 11991 14587 15161 14836 14836 14721 15055  13497 14757 11664 11664 16928 22395 37681 48985 67831 78806 81491  Total POPULATION:' '  1990  1984  1980  Construction  1991  1989  1988  1983  1979  1985  1986  1982  1978  74004 74004 71341  72959  5  Chetwynd  2022  2516  2637  2637  3233  3640  4581  5144  Tumbler Ridge Hudson's Hope  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. 1) the induced employment m u l t i p l i e r i s d e 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 j o b s and d i v i d i n g by the average wage o f 2) t h a t 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 o f 0.05 i s developed i n s e c t i o n 6.1.3. the i n d u c e d 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 / a v e r a g e wage o f t h a t s e c t o r , a p p r o x i m a t e l y $16,000/year.  1381  1559  1629  5765  5765  5765  5765  5765  5765  3798  5608  6008  5771  5771  5686  5999  1629  1629  1629  1629  1629  1629  c o n s t r u c t i o n workers i n camps a r e e x c l u d e d : workers. demographic assumptions: . sex: d i r e c t workforce:  1629  5765  these a r e 80% o f a l l  91% male 9% f e m a l e - s e r v i c e 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 w o r k f o r c e : male 37% s i n g l e 63% m a r r i e d - s e r v i c e s e c t o r 37% s i n g l e 63% m a r r i e d . f a m i l y s i z e ! s i n g l e male ( 1 . 0 ) , m a r r i e d male o r female (3.8), s e p a r a t e d female ( 2 . 8 ) , s i n g l e female (1.0).  103  1978 to 1990. A peak of 950 i s reached in 1985 but the average i s 450 per year.  The income gain to the Northeast economy i s s l i g h t l y over  $105 m i l l i o n in constant 1977 d o l l a r s .  6.2.5  P r o f i l e 5 - Full Development  P r o f i l e 5 represents the maximum possible development scenario. It has been included to enable the determination of the greatest poss i b l e economic impact on the Northeast region. in Section 3 i s included in the analysis.  Every development l i s t e d  Most are assumed to proceed  according to schedules described in Section 3 with the following exceptions.  Quintette i s delayed 5 years (as in P r o f i l e 4) and Utah i s de-  layed 5 years as well.  P r o f i l e 5 d i f f e r s from P r o f i l e 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.  P r o f i l e 5 i s the only p r o f i l e that has a s i g n i f i c a n t im-  pact on Hudson's Hope.  The impact of Utah's Carbon Creek project w i l l  be f e l t there as w i l l a portion of the Cinnabar  impact.  Total employment i s considerably greater in this p r o f i l e compared to the others.  A level of 6,509 permanent jobs i s reached in  1992 when Quintette reaches f u l l employment.  Employment buildup i s  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  IMPACT SUMMARY, PROFILE 5  TABLE 6.5  1991  1992  4242  4242  4342  225  225  212  217  1945  1915  1915  1905  1950  6944  6512  6512  6359  6509  77204  79024  1989  1990  1983  1984  1985  1986  230  450  658  1363  1586  2030  689  495  130  130  290  450  670  1090  1613  2885  3993  4242  4242  38  38  68  101  191  240  257  269  262  132  149  149  238  . 351  599  852  1372  1849  783  875  707  707  1206  1788  3243  4291  6544  6800  10800  8550  4140  4140  8100  11844  24534  28548  17100  12402  8910  2340  2340  910  3822  5278  5278  8190  12060  19838  29357  52507  72672  77204  77204  77204  1979  1980  600  475  230  50  210  290  65  58  70  1981  1987  1988  1982  1978 PLOYMENT: Construction Direct Indirect' ' Induced'^) 1  Total COME:  (ooo's)  Construction Direct Indirect' ' 3  Induced'*' Total  o  4304  4192  3600  3600  3392  3472  15091  20336  21395  21070  21070  20955  21449  71119  88522  109714  111701  104214  104214  101551  103945  6587  10364  14214  14948  14709  14709  14626  5764  5764  5764  5764  5764  5764  5764  5764  4304  7031  7388  7149  7149  7066  7611  3102  4225  4602  4602  4602  4602  4602  1008  928  608  608  1088  1616  3056  3840  779  1457  1638  1638  2623  3864  6590  9374  13497  14757  11664  11664  20001  29384  54018  535  1029  1150  1150  1854  2751  4637  3824  PULATION:' ' 5  Increment  2022  Chetwynd Tumbler  2637  2637  3271  4079  5169  Ridge  Hudson's Hope  1. 2.  2516  1424  t h e 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. t h e Induced employment m u l t i p l i e r 1s d e 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 t h e average wage o f t h a t s e c t o r ($11,000). 3. t h e i n d i r e c t m u l t i p l i e r o f 0.05 i s d e v e l o p e d 1n s e c t i o n 6.1.3. 4. t h e i n d u c e d 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 / a v e r a g e wage o f t h a t s e c t o r , a p p r o x i m a t e l y $16,000/year.  1803  5.  2580  1) c o n s t r u c t i o n workers 1n camps a r e e x c l u d e d : workers. . 2) demographic assumptions: . sex: d i r e c t workforce:  14971  these a r e 80% o f a l l  9 1 % male 9% f e m a l e - s e r v i c e 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 w o r k f o r c e : male.37% s i n g l e 63% m a r r i e d - s e r v i c e s e c t o r 37% s i n g l e 63% m a r r i e d . f a m i l y s i z e : s i n g l e male ( 1 . 0 ) , m a r r i e d male o r female (3.8), s e p a r a t e d female ( 2 . 8 ) , s i n g l e female ( 1 . 0 ) .  105  these projects peaks at $112 m i l l i o n (1977 dollars) in 1988 and remains constant at $104 m i l l i o n annually from 1992 onward.  Population increases dramatically throughout this scenario. This p r o f i l e represents the maximum possible impact on a l l the commun i t i e s under consideration.  Chetwynd, which i s 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 i s 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 w i l l reach a pop-  ulation of about 6,500 in 1992.  Construction i s 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.  A l l t o l d , some 8,166 man years are  involved injecting a total of $150 m i l l i o n 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 a f f e c t 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 c a p i t a l .  106  Coal development could see considerable inmigration to the region, up to 15,000 people in the case of f u l l development.  This could  a l t e r the social characteristics of the Northeast region - migration tends to be s e l e c t i v e .  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 overseas .  The role and relationship of the communities in the region w i l l undergo changes.  Large scale development would see a r e l a t i v e decline  in the importance of such centres as Dawson Creek and Fort St. John. These centres w i l l not receive a d i r e c t impact from coal development. In the case of Fort St. John other resource developments w i l l provide a continued impetus to growth.  likely  The economic base of Dawson  Creek i s primarily related to i t s role as a service centre f o r a g r i c u l ture.  Coal development w i l l have an indirect impact on the City but  in terms of magnitude i t i s not l i k e l y to reverse the r e l a t i v e decline in importance of that community.  Some of the major features of each of the f i v e development p r o f i l e s are summarized in Table.6.6.  TABLE 6.6 SUMMARY OF PROFILES Profile  Peak Jobs  Developments  Production  Sukunka & Quintette  1. 2. 3.  Sukunka/Bullmoose Babcock/Murray W.C.T.  3 .0 mi 11 ion tonnes 5 .0 million tonnes  1100 1750 50  B.P. Sukunka One  1. 2.  Sukunka/BulImoose W.C.T.  2 .0 million tonnes  920 50  Heavy impact on Chetwynd (pop. of 4,750 in 1985)  B.P. Sukunka Two  1. 2.  Sukunka/BulImoose W.C.T.  3 .0 mi 11 ion tonnes  1100 50  Heavy impact on Chetwynd (pop. of 5,400 i n 1986)  Quintette/ Sukunka/ Cinnabar  1. 2. 3. 4.  Sukunka/Bullmoose Babcock/Murray Cinnabar W.C.T.  3 .0 mill ion tonnes 5 .0 m i l l i o n tonnes 0.5 million tonnes  1100 1750 180 50  Heavy impact on Chetwynd (pop. of 5,700 in 1986), small impact on Hudson's Hope, new town development delayed five years  Full Development  1. 2. 3. 4. 5. 6. 7.  Sukunka/Bullmoose Babcock/Murray Cinnabar Carbon Creek Teck W.C.T. Sawmi11  3 .0 5 .0 0.5 2 .3 0.5  1100 1750 180 862 180 50 220  Maximum impact on Chetwynd (pop. 6,000 in 1987), Maximum impact on Hudson's Hope (pop. of 4,900 i n 1983) Tumbler Ridge reaches 6,500 in 1992.  mi 11i on million mil 1 ion million million  tonnes tonnes tonnes tonnes tonnes  Community Implications Moderate impact on Chetwynd, new town of Tumbler Ridge created.  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 f o r 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 w i l l be d i r e c t l y impacted by coal development in the Northeast, w i l l be examined.  Other communities, especially Dawson Creek, may be i n d i r e c t l y  affected by large scale development.  However measured in terms of pop-  ulation increases and subsequent demands on community services the impact w i l l be minimal.  The fact that Dawson Creek has had no growth  over the l a s t 10 years means that there i s excess capacity in most community services.  The types of community impact we w i l l be concerned with are effects 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 p r o f i l e takes place the impact upon Chetwynd i s great.  It appears from our analysis that the impact on Chetwynd i s of  a magnitude at l e a s t as great as the existing population.  The predicted  population in 1982 i s expected to be about 3,000 in a l l p r o f i l e s .  The  population in 1986 ranges from less than 3,000 represented by p r o f i l e 1  no  to approximately 6,200 in p r o f i l e 5. to the other communities emphasized  7.1.1  Therefore Chetwynd i s r e l a t i v e in this section.  Demographic Impact  It i s essential to s t a r t an analysis of community impact with an outline of the l i k e l y effects of development on the population of Chetwynd and i t s demographic c h a r a c t e r i s t i c s because the other r e l e vant impact areas are a l l estimated on the basis of population thresholds, basis of per capita standards or, in the case of commercial f l o o r space requirements, some measure of income increment.  The population increment resulting from each of the development p r o f i l e s i s 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 b a s i c a l l y 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 i s at least until 1982 an expectation of approximately 3,000 people.  This appears to be a r e a l -  i s t i c 5 year horizon for current planning e f f o r t s . things get pretty uncertain.  Beyond that date  For that reason the discussions of im-  pacts in this paper focus on demands in the year  1982.  Ill  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. /  2nd Service Threshold  6.0 5.5.  /  5.0.  /  /  /  /  / J/ / /  (Profile 4:  /  B.P./Quintette/Cin  / ( P r o f i l e 3: B.P. NO NEW TOWN)  3 MT  (Profile 2: 2 MT NO NEW TOWN)  4.5. 4.0. 3.5. 1st Service Threshold^C  3.0_ 2.5, 2.0. 1.5.  /  (Profile One: B.P. Quintette New Town: 1982 phase-out)  /  /  1.0 1977  1  _1  1978 1979  1  1980  l_  1981  -JL  _  1982  J  .-j  . .1..  i  i„.  1983 1984 1985 1986 1987  i  1988 1989  0.8 MT  112  The population  impact on the V i l l a g e of Chetwynd beyond  1982  is s i g n i f i c a n t l y affected by the timing of the Quintette project. development w i l l not have a d i r e c t population  This  impact on Chetwynd because  of the physical distance separating the v i l l a g e and the coal properties. However, there is an indirect e f f e c t because the proposed new located between the B.P.  properties and the Quintette  town i s  properties.  Tumbler Ridge i s an a t t r a c t i v e locational alternative to Chetwynd in terms of reduced commuting time and expense by virtue of being mately 25 kilometers  closer to the Sukunka/Bullmoose properties.  long term would l i k e l y see B.P. new  The  j o i n Quintette in operating out of the  community at Tumbler Ridge.  B.P.  has expressed i t s intended settlement p o l i c y .  employees would be located in Chetwynd from 1978 1981  approxi-  - 1981  1  Direct  inclusive.  After  a l l employees would be located in Tumbler Ridge presumably including  those previously located in Chetwynd.  The resulting population  Chetwynd of the strategy could be very substantial. the short term population  Figure 7.2  impact on compares  impact with the impact assuming Chetwynd to be  the permanent location for the workforce.  It i s obvious from a super-  f i c i a l examination, that the choice of alternatives by B.P., the timing of t h e i r operations  as well as  are crucial to the future of Chetwynd.  The difference amounts to a 250% d i f f e r e n t i a l  in the r e l a t i v e l y 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 w i l l  be an absolute decline in population of approximately 500 involving  113  some 205 housing units in 1982. This would be disruptive from a community point of view.  Community services in p a r t i c u l a r schools and  commercial f a c i l i t i e s would be b u i l t in expectation of a higher population.  Both public and private costs could therefore be incurred.  The question of the potential magnitude of the population loss for Chetwynd i s a crucial one. Various points of view can be expressed: . The company w i l l by virtue of i t s operating procedures and housing p o l i c i e s encourage the 240 workers who w i l l be operating out of Chetwynd to move to Tumbler Ridge. The implications for Chetwynd would be catastrophic. . The company may remain r e l a t i v e l y neutral leaving the choice of residence location up to the worker.  Housing subsidies  would be provided regardless of location.  P r o f i l e 1 of  this paper i s based on such an assumption - i t assumes that workers hired up to 1982 w i l l remain in Chetwynd but a f t e r that w i l l locate at Tumbler Ridge, this res u l t s i n a s l i g h t population loss f o r Chetwynd. The Cornerstone projection makes a s i m i l a r assumption a l though the retention rate i s 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  1st service threshold  6000  B.P. LONG TERM  I  5000  / / 4000  I  /  /  /  /  / 2nd service thresh/ld  3000 »  / 2000  B.P. SHORT TERM 1000  I  1978  ' 1979  ' 1980  1 1981  1 1982  1 1983  1 1984  I 1985  1986  i i i t 1987 1988 1989  115  F I G U R E 7.3  POPULATION GROWTH AND D E C L I N E :  CHETWYND  ASSUMING 1981 PHASE-OUT O F CHETWYND AND P H A S E - I N O F T H E NEW TOWN  7.5 7.Q 6.5 2nd  6.Q  service threshold  5.5  5.a 4.5.  4.a 3.51st service threshold  3.0  ROSS T A Y L O R  (100% retention those hired before 1981)  2.5J 2.0  ^CORNERSTONE f20%  1.5.  retention 1982)  .B.C. RESEARCH  (0 retention 1982)  1.0 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  2nd Service Threshold  5.5. 5.0-1 4.5. 4.0.  Ross Taylor  Cornerstone  B.C. Research -J  1977  1978  1979  1980  1981  1982  1983  1984  1  I  1985  1986 1987  L  117  . the prevailing pattern in the region of remote commuting in both the forest products and the o i l and gas industry . the expressed willingness according to the Northeast 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 w i l l result in a phenomenal growth rate for Tumbler Ridge. from approximately 1,200 6,000 in 1982.  in 1980 to 4,000 in 1981  It would grow  to approximately  This has a number of l i k e l y 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 w i l l push the construction industry to i t s technical  limits  . the high rate of growth w i l l increase costs because of competition for labour . the community w i l l l i k e l y run large f i s c a l  deficits  . social consequences could be severe due to the large number of unacquainted people on the s i t e and the problems of delivering services when needed  I  118 FIGURE 7.5  TUMBLER RIDGE TOWNSITE POPULATION PROJECTIONS 1979 - 1987 13  12  11  / /  10  /  Mm  / To tal Ne 1 To un Popu i ation  en  ./  T3  n3 CO  /  /'  /  3  /'••'•  /  MM  H I P  B¥  w HBP* vim*  im *#  •f  Inetu<^ •v.-*  J H  O  /  I  *y?yZyy+?+  mm?  map'  W  O Q_  m w  Direct  /  New Ti )wn Re.idy fo Occup.incy Ii i 1981  1979  1980  1981  1982  1983  Consti "uctioi i Pop. is le:>s thai i 1000 1984 1985 1986 1987  119  There would appear as a result advantages to the Province, the two companies and the V i l l a g e i n adopting a planning approach which attempts 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 o f f . These workers could be gradually phased out of Chetwynd in l i n e 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 charact e r i s t i c s and demand.  Many families have more than one income earner.  Some single workers w i l l 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 r a t i o has been estimated at 1.4. This figure does not r e f l e c t the existing situation but i s f e l t to be representative of additional demand generated by coal development.  There are presently 35 hectares of land within the V i l l a g e of Chetwynd designated as r e s i d e n t i a l .  During preparation of a community  plan f o r Chetwynd, Stanley Associates surveyed the current housing mix. This survey is summarized  in the following table.  2  120  TABLE 7.1 CURRENT HOUSING MIX, CHETWYND Housing Density and Type 1  Low Density Residential Single Family and Duplex  Percentage of Total Housing Units 261  61  Medium Density Residential Four-plex and Townhouses  54  11  3  Apartment  52  12  4  Mobile Home Park  64  15  5  TOTAL  431  100  2  Source  Chetwynd Survey and Analyses, Stanley & Associates Engineering  In projecting housing requirements, however, i t i s more appropriate to base the estimate on the housing mix of a typical  British  Columbia mining community as this should more accurately r e f l e c t the characteristics of additional demand f o r housing.  The current housing  mix i n the municipality of Sparwood, a coal mining town i n Southern B r i t i s h Columbia, i s 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 Source  1.7% Environment and Land Use Secretariat, 1976: b  121  Applying  these standards to expected demand in 1982, ( P r o f i l e  1) and 1986 ( P r o f i l e 4), a range of housing and land requirements can be derived as follows:  TABLE 7.3 HOUSING REQUIREMENTS, CHETWYND 1982 and 1986 Housing Form  Existing Stockl P = 1487  Additional Units Minimum Impact 1982 p = 3233  Additional Units Maximum Impact 1986 p = 5764  1.  Single Detached  244  189  2.  Single Attached  17  67  233  3.  Apartments  52  57  194  4.  Mobile Homes  64  63  207  5.  Other  54  7  6.  Total  431  383  Source  Units  2  660  -1294  'Village of Chetwynd Survey and Analysis 1977, Stanley and Associates Engineering  2 Assumes 51% single family 3 Assumes 51% single family  3  122  TABLE  7.4 RESIDENTIAL LAND REQUIREMENTS IN ACRES, CHETWYND  Housing Type and  Density  1982 (Minimum Impact)  1986 (Maximum Impact)  102  170  30  51  1.  Single detached @ 5 units/acre  2.  Single attached  3.  Apartments @ 15 units/acre  10  17  4.  Mobile units @ 8 units/acre  21  36  5.  Other @ 5 units/acre  3  6  6.  Total  166  280  7.1.3  @ 6 units/acre  acres  Physical  Services  Provision of the physical services, water, sewer, and roads, etc., represent the greatest expense to a municipality rapid growth.  experiencing  Although assistance i s 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 i s especially  the case when servicing must take place well in advance of the a l i z a t i o n of the expected population  increase.  borrowing capacity of the community may required funds.  materi-  In this situation the  be i n s u f f i c i e n t to raise the  The following sections look at the capacity of-com-  munity services to accommodate growth.  123  The Water Supply  The water system i s described i n the Chetwynd Community Plan as follows: "The original water system was i n s t a l l e d in 1958 and consisted of a dam on Windrem Creek with gravity flow to the Fort St. John Lumber Co. (now Canfor), P a c i f i c 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 d i s t r i b u t i o n 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 i s 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, f i n a l 6,000). the Pine River Pumping Station w i l l  Under this contract  be upgraded by replacing the two  existing Johnston pumps with two 10 H.P. Floway v e r t i c a l turbines. These Floway, low head, pumps w i l l 360 U.S.G.P.M.  have an individual capacity of  Also the 1976 Water Improvements w i l l 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 currently licensed to supply 600,000 and 70,000 Imperial respectively.  gallons per  day  This would be adequate for conditions under a l l of the  development p r o f i l e s although dangerously close to capacity in p r o f i l e s 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 d i s t r i b u t i o n system.  From water analyses  Pine River i t i s evident that the phenol concentration systems i s above that of acceptable Water Standards.  from both supply  l i m i t s established by the Canadian  High phenol concentrations  quality of the potable water.  taken on the  The new  could adversely'effect the  upgrading program w i l l  eliminate  Windrem Creek as a source and therefore any further discussions on 5 water treatment i n this section w i l l 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  grading program large open reservoirs are being u t i l i z e d  up-  to store water  125  pumped from the Pine River during low t u r b i d i t y periods.  The stored  water can then be u t i l i z e d during times of high t u r b i d i t y .  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 i t y with a polishing pond.  The system consists of a three c e l l aerated  lagoon system, a blower house and a chlorination chamber.  The capacity  and retention periods comply with B r i t i s h 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 p r o f i l e s 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.  storm drainage system consists of ditches and culverts only.  The  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 minimum 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 certain specialized school services are delivered by the Peace River South School D i s t r i c t , an elected body which secures i t s funding partly through Provincial operating and capital grants and partly through property taxes levied by D i s t r i c t municipalities and the Regional  Approximately  District.  90% of approved capital costs are picked up by the  Province and 10% i s carried by local taxpayers.  Approximately  operating costs are picked up by the Province and 40% by local  60% of 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 f o r i t s children which has kept crowding at the higher levels of the system down.  127  It appears that Chetwynd w i l l need an additional  elementary  school of f i v e classrooms i n 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 Type  School  No. of Classrooms  Capacity  Enrollment  Spare Capacity  Windrem  K-5  8  195  233  --  Don Titus  K-5  8  225  218  7  Moberly Lake  K-3  2  60  30  30  Elementary  6-7  7  210  184  26  Secondary  8-12  15  315  320  —  985  20  Chetwynd  TOTAL  Source  40  1 ,005  Chetwynd Survey and Analysis, Stanley and Associates Engineering  Standards for educational services are based on a student population rather than total population. The province-wide pupil:teacher r a t i o i s approximately 20:1 at the present time.  This figure includes  a l l teaching s t a f f but not non-teaching s t a f f such as c l e r i c a l or maintenance.  Average class size f o r elementary and secondary schools i s 30  pupils, and an average of 50 i s the norm for kindergarten. Average enrollment for schools i s as follows: junior-secondary, 1,000.  elementary, 330; junior, 750;  128  F a c i l i t i e s are already at capacity in Chetwynd but not c r i t i c a l l y overcrowded.  Development w i l l mean the need for additional elemen-  tary and secondary schoola.  If minimal development takes place one  elementary school of approximately be needed.  300 students and 12 classrooms would  Full development could mean an additional 1,000  and 500 secondary pupils.  new  elementary  In this case two elementary and one secondary  school would be necessary as around 50 classrooms would be needed.  A  f u l l time s t a f f of 75 would be required.  Secondary Health Services  Health service needs for both Chetwynd and Hudson's Hope are currently met in Chetwynd. at 43% capacity. of 4.25  Presently the 30 bed hospital i s being u t i l i z e d  Based on the 43% occupancy rate and a service standard  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 s t a f f requirements.  For i n -  stance the average ratio of general practitioners per population is 1:2,200 throughout B r i t i s h Columbia.  Therefore two or three additional  G.P.'s must be attracted to Chetwynd or Hudson's Hope.  Likewise  or three dentists would be needed i f development proceeds.  two  One addition-  al public health nurse would be required to maintain the current stand-  129  ard of 1 per 4,000 population.  A l l 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 o f f i c e in Chetwynd but not i n Hudson's Hope.  The Chetwynd o f f i c e has one human resources  officer.  One more o f f i c e r may be required to handle the increased caseload that would be associated with coal development.  Protection  In communities under 5,000 population one police o f f i c e r i s required for every 750 people.  A l l the requirements of the police force  are looked a f t e r by the R.C.M.P. including s a l a r i e s , building costs and vehicles.  For this the province i s b i l l e d a f l a t $35,000 per year per  man.  The Chetwynd Community Plan described the e x i s t i n g s i t u a t i o n as follows: "Public protection and provincial and federal law enforcement is the r e s p o n s i b i l i t y of the Chetwynd Detachment of the RCMP.  The present detachment consists of a s t a f f 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 i s one constable per 750 population.  Out of the total manpower allotment over the  detachment area, the Village i s responsible f o r generating 90 percent of police work.  Out of this 90 percent, the  greatest time i s spent dealing with j u v i n i l e crimes as break-ins, auto t h e f t , and liquor offences.  such  Reasons  given by the police f o r the problems with juveniles range from lack of parental supervision to the school problem.  dropout  The dropout problem has been recognized i n the  community and an alternate school program i s being operated out of the Chetwynd Secondary School.  Future plans of the  police include the establishment of a 2-man highway de7 tachment."  Provided that the existing situation remains r e l a t i v e l y constant, i.e. the current problems above are not exacerbated then a manpower i n crease of 2 should be capable of handling growth up until 1982.  Should  the maximum p r o f i l e occur a manpower increase of approximately 6 would not be out of l i n e .  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 w i l l be placed on the recreation, the j u d i c i a l and l i b r a r y systems.  131  It i s d i f f i c u l t to set standards f o r these services however, as the d i f ference between the minimum acceptable level and the desirable standard is so great.  Summary  The attached Table 7.6 summarizes the physical and social service thresholds f o r the key services.  I t can be seen that growth be-  yond the 3,000 population level w i l l involve considerable capital expense.  Key physical service components are designed for that l e v e l .  With regard to the education system, any growth w i l l require expansion.  7.1.5  Commercial Impact  Commercial/Retai1 Floorspace Requirements  Estimating demand f o r r e t a i l floorspace i s done by a three step process.  F i r s t , average proportion of personal income spent on r e t a i l  trade items i s estimated.  Secondly, the proportion of this income spent  l o c a l l y in each r e t a i l sector i s estimated. into floorspace requirements  Lastly, this i s translated  by the appropriate figure f o r sales per  gross area.  From S t a t i s t i c s Canada family expenditure data the proportion of income spent on each of the relevant categories can be obtained. In 1969, the l a t e s t year for which these figures are available, the  132  TABLE 7.6  CHETWYND VILLAGE THRESHOLDS FOR SERVICES Threshold Populations Without With Modification Modification  Component  1.  Water Supply  3,000  2.  Water Distribution and Transmission  6,000  Water  3,000  6,000  Treatment  3,000  6,000  4.  Pumping and Storage  6,000  5.  Sanitary Sewage Treatment  3,000  6,000  Sanitary Sewage Collection  3,000  6,000  7.  Hospital  3,000  8.  Elementary School  at capacity  9.  Secondary School  at capacity  3.  6.  Source  Stanley and Associates, 1977  6,000  133  breakdown i s 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 l o c a l l y i s done judgementally according to the nature of the goods involved and the structure of the local economy. w i l l be purchases i t y items.  Obviously, perishables and other lower order goods l o c a l l y more often than consumer durables and special-  The weights assigned f o r the categories of r e t a i l trade i n  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 i s to calculate floorspace requirements by multiplying income spent l o c a l l y by a figure f o r annual sales per square meter of gross leasable area. are used:  The following sales per f l o o r area figure  food group, $2,400 per sq. meter; general merchandise, $1,700  per sq. meter; apparel, $1,300 per sq. meter; hardware and home furnishings, $1,000 per sq. meter; automotive,  $2,000 per sq. meter; and other  establishments, $1 ,400 per sq. meter.  When the above c o - e f f i c i e n t s are multiplied by income generated by development an estimate of additional floorspace requirements i s generated.  For example, i f $10 m i l l i o n i s injected into the local  economy the floorspace requirements  f o r the food group would be $10  134  million x 0.18 {% of gross income spent on feed) x 0.70  (proportion  captured l o c a l l y ) / 2,400 (sales per sq. meter) = 525 sq. meter.  Using this model the additional floorspace requirements in Chetwynd are calculated f o r p r o f i l e s 3 and 1, the situations of maximum and minimum requirements  respectively.  The results are summarized  in Table 7.7.  TABLE 7.7 CHETWYND: COMMERCIAL FLOORSPACE REQUIREMENTS Gross Total Floorspace Maximum (sq.m) Minimum (sq.m)  Category  1981 Food  1986  1,446  889  General Merchandise  421  259  Apparel  519  320  Hardware/Home Furnishings  689  425  Automotive  413  255  Other  295  181  3,783  2,329  Total Floorspace Requirements  Source  Environment and Land Use Committee Secretariat, 1976  7.1.6  Summary  It i s possible that Chetwynd w i l l experience rapid growth in the next 8 to 10 years.  The settlement p o l i c i e s of the coal companies  135  w i l l determine the extent to which Chetwynd i s d i r e c t l y affected.  A  development agreement negotiated between B.P. Coal and the Province would c l a r i f y the situation and f a c i l i t a t e planning f o r future growth.  Growth thresholds of 3,000 and 6,000 beyond which infrastructure investment i s required p a r t i c u l a r l y in the water and sewer systems are evident for Chetwynd. beneficial to Chetwynd.  Growth up to, but not beyond, 6,000 w i l l be  The commercial sector w i l l 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 i s less l i k e l y than Chetwynd to be s i g n i f i c a n t l y impacted by N.E. coal developments.  I t i s only when the marginal'develop-  ments of Cinnabar and Carbon Creek are brought into the analysis that an impact i s f e l t in Hudson's Hope.  These p o s s i b i l i t i e s are represented  in P r o f i l e 4 (Cinnabar only) and P r o f i l e 5 (Cinnabar and Carbon Creek). Of these two p o s s i b i l i t i e s only the l a t t e r 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 i s 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  1977  •  1978  •  1979  1  1  1980 1981  1  1982  i 1983  i 1984  i 1985  i 1986  i 1987  i  i  1988 1989  137  same assumptions  and standards as used f o r Chetwynd above, the pro-  jected housing requirements f o r 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  18  4  Other Total  1,047  170  Hudson's Hope i s in good shape to handle moderate expansion in terms of land a v a i l a b i l i t y but s i g n i f i c a n t improvements to the physical infrastructure are required i f a population increase on the scale implied by development at Carbon Creek i s to take place.  There i s some  slack in the system at present, mainly because the population of Hudson's Hope was formerly over 3,000 whereas'today i t i s approximately 1,300. This drop in population happened after construction of the W.A.C. Bennett Dam was completed. over 1,000  A construction workforce numbering well  at peak times i s followed by a permanent or operating workforce  of 150 - 200 based in Hudson's Hope.  138  Capacity of the water system i s adequate f o r present purposes with a storage capacity of 100,000 gallons.  This w i l l 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 i s 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 i s s i g n i f i c a n t but less than at Chetwynd.  If only Cinnabar i s developed  ( P r o f i l e 4) the im-  pact on the educational system would be s l i g h t enough to be by the existing f a c i l i t i e s . nearly 1,000  absorbed  However, i f Carbon Creek comes on stream  additional pupils can be expected.  the addition of one elementary  and one secondary  This would require school.  Health ser-  vices needs w i l l be primarily met in Chetwynd, as has been discussed above.  If Carbon Creek is developed, there w i l l be a substantial pact on the service sector.  The same type of analysis as was  Chetwynd i s applied to Hudson's Hope. captured l o c a l l y was estimated as: 0.55;  apparel, 0.25;  other 0.40.  im-  done for  The proportion of total sales  food, 0.60;  hardware/furnishings, 0.40;  general merchandise, automotive,  0.25;  and  The other values of family expenditures and sales per  f l o o r area are assumed to be the same as those estimated f o r 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  7.3  2,729  Dawson Creek  As stated e a r l i e r , Dawson Creek i s not expected to be d i r e c t l y impacted by coal development.  However, there may be some impact on the  service sector, p a r t i c u l a r l y in the government, medical and hotel/motel sectors.  The r e t a i l sector may also be impacted to a certain extent.  A new major shopping centre has recently opened so i t i s not l i k e l y that further expansion in terms of floorspace w i l l occur unless major development takes place i n the coal sector.  It does not appear that forestry and coal developments w i l l d i r e c t l y a f f e c t Dawson Creek.  The principal prospect f o r economic de-  velopment on Dawson Creek remains to be i t s role as a regional service and supply centre.  Most of the key government o f f i c e s 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 t r i p s to either Prince George or Grande P r a i r i e .  Dawson Creek should therefore benefit i n d i r e c t l y  from coal development.  7.4  The Region  Coal and forestry developments could have large scale impacts on the entire Northeast region, p a r t i c u l a r l y in the area near Chetwynd. Major development would see the roles and relationships of communities within the region s h i f t as Dawson Creek continues to decline r e l a t i v e l y within the region and Tumbler Ridge emerges as a major new development. 1982.  centre of  Chetwynd seems l i k e l y to continue growing at least until  Hudson's Hope w i l l probably s t a b i l i z e in the short run but  grow from 1981  onward.  Other dynamic centres  may  in the region such as  Fort Nelson and Fort St. John w i l l continue to grow being  stimulated  by the o i l and gas and forestry sectors.  Based on this analysis of potential coal developments and Northeast Report 75, the following regional population have been made.  projections  the  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  Trend Line  35,000 2.  Forestry development  3.  Forestry development and Coal development  30,000  .  .  25,000  20,000  15,000 1961  1966  1971  1976  1981  1986  142  FIGURE 7.8  POPULATION CHANGE AND PROJECTIONS PEACE RIVER COMMUNITIES  .  13,000  I  n  .  trend line  .  forest development  .  coal and forest development , ,. . .,  ,  1  1961  m l  actual change  TI Til I I I  1966  i i  i l l III I I i 1 I i II I I I H I I II i I  1971  1976  1981  1986  i  1991  ' ' I  143  Notes to Section  1.  7.0  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 i n Northeastern B r i t i s h Columbia are very extensive and generally of a higher quality than reserves elsewhere in the province and other, competitive sources of coal including the United States and A u s t r a l i a .  However, northeast coal i s not readily accessible  to markets and production costs are high due to complex geological formations and geographic  isolation.  Costly infrastructure investments are necessary to move large volumes of coal to export markets.  Total investment  i n 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 i s feasible without major i n f r a structure  investments.  The combined annual production of a l l of the proposed projects totals 11.3 m i l l i o n tonnes per year at f u l l  production.  Of this total  the largest single project i s Quintette Coal with a proposed annual duction of 5.0 m i l l i o n tonnes. B r i t i s h Petroleum  pro-  Other large scale proposals include  Limited, 3.0 m i l l i o n tonnes per year; and Utah Mines,  2.3 m i l l i o n tonnes per year.  Even at the maximum proposed level of  production reserves in the Peace River C o a l f i e l d are s u f f i c i e n t to sustain operations f o r at least 25 years.  145  8.1  Regional Impacts  The potential impact of coal development i s of a great magnitude 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 d i r e c t employment i s estimated to be over 2,100 jobs resulting in total employment, d i r e c t l y and i n d i r e c t l y 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 i s nearly 15,000 and the annual wage b i l l  i s upwards of $0.1  billion.  Other development p r o f i l e s involve a smaller scale of development and hence total employment would not be as great.  For example,  the minimum development p r o f i l e - development of Sukunka to 2.0 m i l l i o n tonnes per year - has a total employment impact estimated at 1,455. A l though this does not r e a l l y constitute a major impact when considered from a regional perspective, there w i l l be s i g n i f i c a n t local  impacts,  most notably in Chetwynd.  The roles of the various communities in the regional settlement system w i l l undergo change as a result of even minimum development. P a r t i c u l a r l y affected w i l l be Chetwynd, Hudson's Hope and Dawson Creek. Dawson Creek may decline somewhat in i t s capacity as regional service centre.  Chetwynd may gain somewhat in this capacity although i t  146  l i k e l y would be overshadowed by the new town of Tumbler Ridge, i f i t is  built.  8.2  Community  Impacts  Coal development w i l l  have a large impact upon Chetwynd even  i f i t i s assumed that only a minimal level of output w i l l  be produced.  An increase in the level of overall production does not p r o p o r t i o n a t e increase the impact on the v i l l a g e .  In f a c t , in certain circumstances  an increase in coal exploitation may result in a reduced impact at Chetwynd. the  This apparent contradiction i s explained by the effects of  proposed new town on employee d i s t r i b u t i o n .  closer to the Sukunka property than i s Chetwynd.  Tumbler Ridge i s The attractiveness  of a shorter daily commute i s sure to improve the drawing power of Tumbler Ridge r e l a t i v e 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 ment.  stages of the new town's develop-  Based on a recent Coal Guidelines submission, i t appears that  Sukunka w i l l  be developed f i r s t .  1  As a result Chetwynd w i l l  initially  absorb most of the impact but by 1982 w i l l have become the secondary centre with respect to coal  development.  The option of developing Sukunka to an output level of 2.0 m i l l i o n tonnes per year using Chetwynd as a base has s i g n i f i c a n t growth implications for Chetwynd.  Population w i l l  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 d i r e c t jobs over and above that of the f i r s t option resulting in a stable population close to 5,400.  Other development p r o f i l e s could have an even  greater impact populationwise with the exception of P r o f i l e 1.  Due to  the timing of Tumbler Ridge, the population of Chetwynd w i l l decline s l i g h t l y between 1982  and 1983  s t a b i l i z i n g at about 2,700.  Stable  population under the conditions projected in P r o f i l e 4 and 5 would be 5,700 and 6,200 respectively.  The f i n a l stable population turns out to be of c r i t i c a l tance to the Village of Chetwynd.  impor-  In assessing the capacity to ac-  commodate growth i t becomes clear there are d i s t i n c t thresholds at 3,000 and 6,000 people beyond which considerable infrastructure i n vestment i s required, p a r t i c u l a r l y in the water and sewer systems. Most development p o s s i b i l i t i e s would necessitate heavy investment and place a s i g n i f i c a n t 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 s t a f f 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 a v a i l a b i l i t y  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 development.  The economic structure of Chetwynd w i l l be r a d i c a l l y altered.  Presently the economic structure i s reasonably d i v e r s i f i e d with the economic base being mainly the forest industry with other major employers being the coal mine, B.C.  Rail and the school d i s t r i c t .  De-  velopment of coal w i l l change Chetwynd into a "single industry" town. Heavy population growth w i l l change the character of the community. This could be resented by the established residents.  Hudson's Hope i s much less l i k e l y to be d i r e c t l y impacted Northeast coal developments than i s Chetwynd. ment conditions when the r e l a t i v e l y marginal  Only under f u l l  by  develop-  project of Carbon Creek  comes into play i s there a s i g n i f i c a n t impact on Hudson's Hope.  In  these circumstances the population could reach upwards of 4,900 by 1986 from i t s present 1,300.  8.3  Factors Influencing Development  The decision to develop the coal resources of the northeast i s based on expectation of p r o f i t .  This in turn i s 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 w i l l have a good deal of impact on some of the above factors in terms of p r o f i t a b i l i t y of exploiting coal.  The market for coal i s almost t o t a l l y beyond the control or i n fluence of the Province.  Price i s related to world steel output and i s  therefore dependent on world economic cycles because steel production tends to be indicative of general economic performance.  This l i m i t s the  scope and effectiveness of potential intervention measures.  The Province  can a c t i v e l y promote B.C. coal through trade missions, a process that i s 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 i s possible.  Directly affecting the price or quantity demanded of coal  i s , however, quite beyond the c a p a b i l i t i e s of the Province of B r i t i s h Columbia.  There are other factors over which l i t t l e , i f any, can be exerted d i r e c t l y .  influence  Many of the production and capital costs are  higher in northeast B r i t i s h Columbia because of the r e l a t i v e 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 C o a l f i e l d are of a technical nature and hence there can be no planning solutions.  Factors  related to remoteness can  be compensated f o r to a certain degree through government action however.  150  There are at least three facets of remoteness that have a bearing on the f i n a l cost of delivered coal.  F i r s t , remoteness increases  the cost of transporting the product to market. increase the operating costs of the project. likewise are increased by remoteness. from the competitive  Second, remoteness w i l l  Third, the capital  costs  A l l of the above factors detract  position of northeast coal on world markets by i n -  creasing i t s cost and reducing the p r o f i t margin.  There being no local market for northeast coal, the r e l a t i v e remoteness of the areas adds considerably to the costs of delivering the  product to market.  Spatial remoteness can be o f f s e t 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 c o a l f i e l d s , and port f a c i l i t i e s at Ridley Island.  In addition, some improvement on  the existing CNR l i n e from Prince George to Prince Rupert are necessary. These investments would require a substantial portion of total  capital  invested within B r i t i s h 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. i n d i r e c t 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. labour turnover  In such situations  i s invariably high because of remoteness and the higher  151  cost of l i v i n 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 higher because of three related factors.  tend to be  The f i r s t factor, development,  or pre-production, costs, w i l l probably be higher owning to greater expense of transporting men  and equipment to the minesite.  Road and r a i l '  connections must be b u i l t for access to the minesite.  A larger inventory of working capital may be required as compared 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 w i l l not be able to supply these needs.  As a r e s u l t , total  investment  per unit of productive capacity i s higher than in comparable operations with better access to such needs.  F i n a l l y , 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 i s d i f f i c u l t to a t t r a c t entrepreneurs  in the commercial sectors of  food, shelter, clothing, recreation and others. a tendency f o r social overhead capital investment ment in d i r e c t l y productive a c t i v i t y .  As a r e s u l t , there i s to lag behind invest-  The company often finds i t neces-  sary to undertake most or a l l of this investment  itself.  152  8.4  Options f o r the Region  This section proposes to consider which groups or i n s t i t u t i o n s w i l l benefit from coal development and also to outline some of the options f o r the region i f maximum community benefits are to be realized. Five main "actors" have been i d e n t i f i e d 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 f o r these actors w i l l be considered f o r each of four types of development options.  These are: to postpone develop-  ment temporarily or i n d e f i n i t e l y ; development on a small scale; development on a large scale but with no government investment; and, development on a large scale with government investment.  The four options w i l l  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 w i l l remain pretty much as they are at the present time. Projecting these trends into the future, one can expect regional population to increase s l i g h t l y although individual communities such as  153  Fort St. John w i l l l i k e l y experience more rapid growth and others such as Dawson Creek may  decline s l i g h t l y 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 e f f e c t of improving the a c c e s s i b i l i t y of forestry products in the region. tive outmigration  This raises the p o s s i b i l i t y that selec-  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  p a r t i c u l a r l y 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 d r a s t i c a l l y affected by coal  de-  velopment while others would receive only tin direct impacts or spinoffs. Chetwynd w i l l l i k e l y experience moderate growth in the absence of coal development.  Independent projects such as the gas scrubbing  the p o s s i b i l i t y of a new assure t h i s .  plant and  sawmill or expansion of an existing one  should  S i m i l a r l y , Fort St. John w i l l in a l l p r o b a b i l i t y experience  considerable growth regardless of whether or not coal development proceeds because of gas projects that are not affected by coal decisions.  Hudson's Hope and Dawson Creek have both been declining in population in recent years.  There are signs that population may  have sta-  154 b i l i z e d f i n a l l y however,  Neither of these communities have much case to  expect s i g n i f i c a n t 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. One  The operating phase of the Site  Dam w i l l only generate an additional 15 to 20 jobs.  Employment ex-  pansion in Dawson Creek is related to i t s role as regional supply  and  service centre in the absence of any s i g n i f i c a n t economic development potential in the c i t y  itself.  With no development occurring the other central actors - the federal and provincial governments and the mining companies - are not r e a l l y affected except to the extent of t h e i r investments in exploration, f e a s i b i l i t y studies and so on..  None of the above actors are r e a l l y  im-  pacted by this p o s s i b i l i t y of delayed development, at least at the present time.  Hence no one r e a l l y benefits.  is adversely affected either.  On the other hand, no party  Perhaps most regretable i s that the un-  employed of the region w i l l not gain the opportunity to enter the mining workforce.  Even this is not a c l e a r l y 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 m i l l i o n tonnes a year in t o t a l .  This would correspond  to Scenario 2, development of  155  Sukunka to an output of two m i l l i o n tonnes per year.  The Sukunka f i e l d  i s the only one that could be economically feasible at such a low rate of extraction.  Other f i e l d s 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 s i g n i f i c a n t implications for the V i l l a g e of Chetwynd.  The employment and population  lined above.  related impacts have been out-  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 d i -  v e r s i f i e d economic base and so on.  Negative implications might include  such phenomena as i n f l a t e d 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, p o t e n t i a l l y more e f f i c i e n t , operators from outside the  region.  The economic implications of small scale coal development are not p a r t i c u l a r l y s i g n i f i c a n t from the point of view of the Government.  Federal  This is not to say that there w i l l be no impact, but that  in comparison with total federal expenditures these impacts are r e l a tively insignificant. Province of B.C.,  There are a number of ramifications for the  however.  Although d i r e c t investment in transportation  156  and townsite infrastructure is not required, the Province is d i r e c t l y or i n d i r e c t l y responsible for a number of social services that w i l l have heavy demands placed upon them.  A d d i t i o n a l l y , the Province is  committed through various cost sharing schemes to pick up a proportion of costs associated with expansion and improvements to physical services such as roads, water, sewer and others.  This w i l l be more or  less offset by income from royalties and other taxes paid by the mining companies and i t s employees.  A l l royalties accrue to V i c t o r i a  while tax revenue goes to both V i c t o r i a and Ottawa.  Given the assumption that a p r o f i t 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 development.  The mining company because they expect to show a p r o f i t , and  Ottawa because they w i l l receive some revenue yet w i l l not be respons i b l e for any of the expenses.  Evaluating the position of Chetwynd and the Province i s more complicated  because there are both positive and negative factors. Some  of these factors are not readily quantifiable and others are value judgements.  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 i s impossible to determine or evaluate the effects of a change in character of a community on i t s residents.  To keep this ques-  tion in i t s proper perspective i t must be remembered that we are talking of an order of magnitude of change that i s not overwhelming in this i n stance.  Therefore, social disruption w i l l not be as pronounced as under  conditions of f u l l development. are marginal  8.4.3  Hence, in the writer's opinion, there  benefits to both the Province and the Village of Chetwynd.  Large Scale Development with No Government Investment  Large scale development w i l l have massive impacts on a l l f i v e actors, even i f governments do not take an equity position or provide some or a l l of the necessary  infrastructure.  level the economic structure w i l l  Even at the regional  be altered and the impact for i n d i -  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 r e d e f i n i t i o n of community roles within the region.  Com-  munities such as Chetwynd and Hudson's Hope could more than double in size i n 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 i s no d i r e c t government involvement, both governments w i l l be affected by coal development of this scale.  The federal government w i l l  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  w i l l also be in receipt of revenues from royalties and other taxes but the effects on the province go much deeper than that.  Assuming there i s no government intervention in other aspects of development such as hiring p o l i c i e s there w i l l undoubtedly be heavy migration into the region. sently in B.C.  Even though the pool of unemployed labour pre-  i s greater than the numerical  requirements  of even f u l l  development there i s a structural mismatch in terms of labour force s k i l l s and the requirements  of open p i t and underground mining.  Despite  the fact that costs associated with labour force turnover are a major component of operating costs, i t i s 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. run training program would have.  residents that a p r o v i n c i a l l y  Furthermore, an employment survey of  the northeast indicated that of the unemployed about half were w i l l i n g to work in open p i t operations but less than 2% were w i l l i n g to work 2 underground.  Unfortunately a large proportion of workforce require-  ments are underground, and this proportion increases over time.  There-  fore, i t i s almost certain there w i l l be an inflow of labour from areas where a s k i l l e d labour pool e x i s t s .  Also, with such a large project as  northeast coal, there w i l l 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. lower in the northeast than the provincial  average.  In f a c t , wages are  159  Once again the assumption i s made that there are net positive benefits f o r 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 i s a d i s t i n c t p o s s i b i l i t y at current market prices f o r coking coal.  In the future, i f prices r i s e ,  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 i s the case with no government intervention, the effects on the actors can be quite d i f f e r e n t . The most fundamental difference i s related to the p r o f i t a b i l i t y of the various projects.  With total investment into the b i l l i o n s of dollars  for f u l l development, private companies may be unable or unwilling to raise the investment c a p i t a l .  Therefore, i t i s possible that the f i n a l  decision whether or not to develop i s contingent upon working out an i n vestment sharing formula between the two governments, the mining companies and other e n t i t i e s such as the r a i l r o a d .  At least this would  tend to be the case under marginal conditions of p r o f i 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 p a r t i c u l a r .  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 i s more  or less depending on the transportation  infrastructure of the coal oper-  ations because forestry alone would not j u s t i f y the expense. a single multi-purpose townsite can be planned.  Such a new  Similarly, town would  be more d i v e r s i f i e d economically and generally more viable s o c i a l l y than would be a number of smaller hew  towns, one for each project.  Another s i g n i f i c a n t benefit of government intervention manpower p o l i c i e s .  involves  A coordinated manpower training program could reduce  the need for importing labour from outside B.C.  and Canada.  I f north-  east coal development does not r e s u l t in employment for people of the region and the province, the d e s i r a b i l i t y 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 i s also increased  social disruption the greater i s  inmigration  to the area, especially i f the migrants are from a d i f f e r -  ent culture which might be the only alternative as the number of s k i l l e d miners in Canada i s 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 degree of control that may  be gained through involvement.  Whether this  additional control over timing, hiring p o l i c y , townsite development, transportation a political  decisions, and other aspects j u s t i f i e s the expense is  consideration.  the  161  8.5  Concluding Comments  A summary of some of the implications of the four types of development p o s s i b i l i t i e s i s presented in Table 8.1 below.  I t should be  emphasized that these four development p o s s i b i l i t i e s do not replace the f i v e development scenarios generated in Section 6.2.  Instead, they  represent a more general c l a s s i f i c a t i o n based on public involvement in the process.  One conclusion to be drawn from Table 8.1 i s that the alternative that i s most capable of accommodating change and otherwise planning for coal development i s large scale development with government intervention.  This i s p a r t i c u l a r l y 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 i s essential. The Province i s 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 B r i t i s h Columbia as well as Ottawa and the private sector.  However, this i s contingent upon  a competent planning process that can balance s o c i a l , economic and p o l i -  162  TABLE 8.1 SUMMARY OF DEVELOPMENT IMPLICATIONS LARGE SCALE, NO GOVERNMENT INVESTMENT  LARGE SCALE, WITFT GOVERNMENT INVESTMENT  Marginal impact  Impact On balance of payments  Investment in port facilities  Marginal impact  Revenue inflow  Transportation and community infrastructure investments, planning i n i t i a t i v e  COMMUNITIES Existing trends  Direct impact on Chetwynd  Uncertain, depends on settlement policy of private sector  Planning may reduce uncertainty and social disruption  REGION  Existing trends  Marginal impact  Heavy inmigration of workers  More benefits to remain in region  PRIVATE SECTOR  No impact  P r o f i t f o r Assumes plannB.P. Sukunka ing function  DELAY DEVELOPMENT  SMALL SCALE DEVELOPMENT  FEDERAL GOVERNMENT  No impact  PROVINCIAL  No impact  ACTOR  t i c a l concerns.  Not responsible for planning  Certainly the background studies have documented most  questions r e l a t i n g to environmental and many social concerns.  sensitivities, efficiency criteria  Out of this has evolved policy related to  coal development in the Northeast.  Therefore, i f and when conditions  appear favourable f o r development everything w i l l be i n place and development may proceed without lengthy delays.  163  One possible shortcoming tional framework for planning.  i n this process may be the i n s t i t u -  There i s no one agency that i s respon-  s i b l e f o r the planning function.  Instead what could be called a refer-  ral approach i s u t i l i z e d whereby l i n e agencies, each responsible f o r delivery of a p a r t i c u l a r service or function, are kept in touch with each other.  Perhaps i t would be well advised to develop an i n s t i t u -  tional arrangement s p e c i f i c a l l y with this end in mind.  This end how-  ever, could well stand on i t s own as the focus of a separate study. Given the p o s s i b i l i t y that coal development may not take place f o r a number of years, i t could prove to be a worthwhile e f f o r t . f i c i e n t planning agency could reduce many of the unnecessary  An efdelays  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 v o i r , Va.: Research Paper No. 3, U.S. Army Corps of Engineers, 1973. Bendavid, Aurom. Regional Economic Analysis'. Publishers, 1974.  New York:  Praeger  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 f o r Sukunka/Bullmoose Unpublished paper, 1977. . Stage I Preliminary Impact Assessment. Canada Ltd., 1977.  Property.  B r i t i s h Petroleum  Cornerstone Planning Group Ltd. Northeast Coal Employment Survey. Vancouver: Cornerstone Planning Group Ltd., 1977. . Population Projections and Social/Cultural/Income Characteri s t 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 B r i t i s h Columbia, undated. Department of Housing. River City. An Analysis of Cost of Public Services in a New Town, Population 10,000. V i c t o r i a : Department of Housing, 1976. Detomasi, D.D. The Decentralization of Population and/or Economic A c t i v i t y : A Method f o r Assessing Its Impact on Small Centres, mimeo, 34 pp. Dror, Yehzekel. "A Third Look at Future Studies," casting and Social Change, 5, 109 - 112. Environment and Land Use Committee Secretariat. Unpublished paper, 1976. . Guidelines f o r Coal Development. Environment, 1976.  Technological Fore-  B.C. Towns Study.  Victoria:  Ministry of  . Provincial Service Requirements and Costs f o r Proposed New Community. V i c t o r i a : Ministry of Environment, 1976.  165  Environment and Land Use Subcommittee. Preliminary Environmental Report on Proposed Transportation Links and Townsites. V i c t o r i a , 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 M u l t i p l i e r to Small Rural Areas," Land Economics, 48, (4), 329-337. Hoover, E.M. An Introduction to Regional Economics. Alfred A. Knopf, 1975. Johnston Associates. Mackenzie Market Study. Associates, 1975.  Vancouver:  . Dawson Creek Community Economic Analysis. Johnston Associates, 1975. Kahn, Herman, and Anthony Wiener. MacMillan Company, 1967.  2nd ed., New York:  The Year 2000.  Johnston  Vancouver:  New York:  Langford, H.A. Technological Forecasting Methodologies. American Management Association, 1969.  The  Washington:  Manpower Sub-Committee on N.E. Coal Development. Report of the B.C. Manpower Sub-Committee on N.E. Coal Development. V i c t o r i a : Mini s t r y of Economic Development, 1977. Marti no, Joseph. Technological Forecasting for Decision-Making. York: American Elsevier Publishing Co., Inc., 1972. Ministry of Economic Development. The Manual of Resources. Ministry of Economic Development, 1977. . Northeast Coal Development paper, 1977.  New  Victoria:  Information Summary. Unpublished  . A Summary Report on Development P o s s i b i l i t i e s in the North Eastern Region of B r i t i s h Columbia. V i c t o r i a : : Ministry of Economic Development, 1975. Ministry of Municipal A f f a i r s and Housing. Alternative Methods of Financing and Developing Resource-Based Communities. Victoria: Ministry of Municipal A f f a i r s and Housing, 1977. . Municipal S t a t i s t i c s . A f f a i r s and Housing, 1975.  Victoria:  Ministry of Municipal  166  NeTles, H.V. The P o l i t i c s of Development. Company of Canada Ltd., 1972.  Toronto:  The MacMillan  Olsen, Marvin, and Donna Merwin. "Toward a Methodology f o r Conducting Social Impact Assessments Using Quality of L i f e Social Indicators," Methodology of Social Impact Assessment, ed. K. Finsterbusch and C P . Wolf. Stroudsburg, Penn.: Dowden Hutchinson and Ross Inc., 1977. Palmer, J . , and M. St. Pierre. Monitoring Socio-Economic Change. Dept. of Indian A f f a i r s 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. V i c t o r i a : Ministry of Mines and Petroleum Resources, 1977. Richardson, H.W. Elements of Regional Economics. Penguin Books Ltd., 1969.  Harmondsworth, Middlesex:  Shields, Mark. "Grounded Theory Construction in Social Impact Assessment," Methodology of Social Impact Assessment, ed. K. Finsterbusch and C P . Wolf. Stroudsburg, Penn.: Dowden, Hutchinson and Ross Inc., 1977. . "Social Impact Studies, An Expository Analysis," and Behaviour, Vol 7, No. 3 (September 1975), 373-404. Stanley Associates. Village of Chetwynd Survey and Analysis. Stanley and Associates, 1977.  Environment Vancouver:  Townsite and Community Development Sub-Committee on Northeast Coal Development. Preliminary F e a s i b i l i t y Report on Townsite/Community Development. V i c t o r i a : Ministry of Municipal A f f a i r s and Housing, 1977. Transportation Sub-Committee on Northeast Coal Development. Northeast Coal Study. Preliminary Report On Transportation Developments. V i c t o r i a : 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. paper, 1976.  Unpublished  . 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 F a c i l i t i e s MacKenzie Townsite, B.C. Vancouver: Watts Marketing Research Ltd., 1966. Wolf, C P . "Social Impact Assessment: The State of the Art," Social Impact Assessment, ed. C P . 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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