BC Announces Tech Strategy

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The BC Tech Summit wrapped up recently in Vancouver, and the biggest news to come out of the two-day event was Premiere Clark’s unveiling of BC’s tech strategy. It is no secret that the tech industry in BC is flourishing. The sector is one of the highest GDP generators of all industries in BC, contributing $15.5 billion to our provincial economy in 2014. Tech employs 84,000 people in our province, providing high-paying jobs, and accounting for double the total jobs in forestry, oil, gas and mining.

It seems that the BC government has now recognized the potential of this industry and has announced significant support to help it grow. It’s not clear if this interest in tech is a way to divert attention from the long-promised and as-yet unrealized LNG boom.  CRED_tech2rev2Nonetheless, the tech sector needs supportive policies in order to catch up with other provinces and countries, like our neighbours to the south.  CRED’s tech report recognized that BC falls behind other jurisdictions in terms of output , but the potential is great. If BC’s tech sector were to catch up to the average US state, we would see 65,000-74,000 more jobs and an additional $9.1 billion in GDP.

In her announcement, Clark said that the BC government heard our concerns and has recognized three main issues: developing the talent pool, access to capital, and access to new markets. This makes us smile, as our report recognized a need for strategic government support, increased access to venture capital, investment in talent development and reduced barriers to recruitment. Right on! The only missing piece we identified is the support for regional tech hubs, but hopefully that can come soon too.

Amongst the new initiatives introduced are:

 1. $100 million BC Tech Fund to address an early stage (A-Round) funding gap.

The fund is targeted at new and emerging tech companies that need resources to get off the ground. The province is seeking a private sector fund manager to administer it.

2. Introduction of IT skills & concepts, and adding coding to the K-12 public school curriculum beginning this September.

Further details on implementation or teacher education have not been announced, and no new funding has been allocated.

3. Streamlining public sector access to software innovation through developer exchange 

The detailed breakdown of BC’s tech strategy can be found online http://bctechstrategy.gov.bc.ca/wp-content/uploads/sites/10/2016/01/BCTech_Strategy.pdf

It’s fitting that this announcement comes just days after BC announced its opposition to the proposed Trans Mountain Pipeline project. While more details are still to be revealed, we feel it is a good start and a much-needed bolster to the tech industry. It’s also a good indication of where BC’s economy should be headed – away from higher-risk, shrinking asset industries and towards the future in knowledge-based, value-added economic activity.

First Nations Victory Could Impact Future Pipelines

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Big news – A BC Supreme Court ruling yesterday has set the Enbridge Northern Gateway bitumen pipeline project back a few steps. The court ruled that the BC government failed in their duty to consult First Nations when they signed an equivalency agreement regarding the assessment of environmental and social impacts of Northern Gateway.

The agreement that BC signed effectively waived the province’s responsibility to do an environmental assessment of Northern Gateway, putting the final say in the hands of the National Energy Board (NEB). Gitga’at First Nation and the Great Bear Initiative Society – representing coastal First Nations – challenged the province in court when they were not consulted prior to this agreement.

Where does that leave Northern Gateway?

The Supreme Court has deemed the equivalency agreement invalid for Northern Gateway. That means that although the NEB has approved the project, BC is now obligated to carry out a full environmental assessment and must consult with and accommodate the needs and concerns of First Nations. This essentially brings the project back to the beginning, though the province does not agree with that sentiment: Justice Minister Suzanne Anton has stated there is no need to duplicate the review process.  We will see how this rolls out in the coming months.

This will be an interesting challenge for Enbridge, the project proponent, as the clock is ticking on them meeting the 209 conditions laid out by the NEB, while at the same time attempting to secure contracts for the bitumen. This all speaks to the uncertainty of the pipeline project, and the overall challenges facing companies who want to extract and transport bitumen across our province.

While the company is stating that it is simply a ‘jurisdictional issue’ between the federal and provincial governments, they are well aware that statement belies the actual challenges that lie ahead – both in terms of process, as well as meeting the needs and expectations of policymakers and stakeholders.

How does this affect the Trans Mountain Expansion Project (TMEP)

Not only is this ruling a significant setback for Northern Gateway, it could mean changes for future pipeline projects, including the Trans Mountain expansion. The ruling affirms our provincial government’s duty to consult with First Nations, and it will also apply to the province’s obligation to conduct assessments in relation to five other projects, including the Trans Mountain Expansion. It is unclear yet if the equivalency agreement will also be voided for the TMEP, but it is perhaps the clearest indication yet of the importance of First Nations engagement in these reviews, and in the development of all industrial projects in the province which have a potential impact on First Nations.

Hopefully a diligent environmental assessment, as well as a revised National Energy Board and review process will be the norm for all energy projects as we continue to move towards a responsible, forward-looking and prosperous economy in BC.

 

BC Government Rejects Trans Mountain Pipeline Expansion

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We walked to work on Monday morning with an extra spring in our step after we heard the announcement that the Government of British Columbia is formally opposing the Trans Mountain pipeline expansion. This was welcome news to CRED, our members, supporters and partner organizations! 

While the eleventh hour decision may be politically motivated rather than driven by concerns over inadequate bitumen spill response as indicated, the end result is what we all want: attention to the need for a review board that thoughtfully and transparently weighs the risks of economic activities against potential benefits.

Provincial opposition is just one step. We need the federal government to make a move and recognize that transformation of the National Energy Board isn’t enough. The transformation needs to happen before the Trans Mountain Expansion review is concluded under the current framework.

CRED is working to make this concern heard through an open letter to Prime Minister Trudeau. As many of you know, on top of generating fact-based research and stimulating dialogue around our economy, the CRED team advocates for responsible economic development at the municipal, provincial and federal levels.  We are partnering with like-minded business organizations in our efforts to engage policymakers in supporting industries that generate employment and benefits for society without degrading our land and water.

As part of this process, in the coming days, CRED will be active in the following:

  • We will publish an open letter to Prime Minister Trudeau from BC businesses to put a halt to the NEB process, and overhaul the NEB before pronouncing on the Trans Mountain expansion in May 2016. The timing will coincide with the upcoming NEB final hearings in Burnaby.
  • We are generating infographics to illustrate the worsening economics of the pipeline expansion project, as outlined in recently published research by SFU and the Living Oceans Society.

Please go to http://credbc.ca/neb-open-letter-trudeau/ to sign on to the Open Letter, and stay engaged with us as we continue to work towards a vibrant economy.

 

Divestment Blues or an Ocean of Opportunity?

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In recent months, somewhat lost in the breathless excitement around our federal election and climate change negotiations in Paris, there was a brief moment where the concept of fossil fuels divestment was covered in the media. US $2.6 Trillion, it was reported, has recently been divested, publicly advocated for by no less than Leonardo DiCaprio and other celebrities who are obviously well known for their investment acumen.

Was this a fluff piece, only worthy of the 15 minutes of news cycle coverage it received, then to be immediately forgotten?  Or are there real implications for the future health of the BC economy?  Is it possible for BC to turn this phenomenon into an opportunity?

What is divestment, anyway? 

At CRED, we understand divestment to mean the opposite of investment – institutions or individuals choosing to sell off their positions related to economic activities they believe to be unethical, morally ambiguous or harmful. This has traditionally related to shares in industries involved in the production of arms, tobacco or alcohol, or investment in parts of the world with dubious human rights records. Traditionally, those leading the divestment charge tend to be pension funds, universities, governments, celebrities and religious groups.

Recently, the focus has shifted to fossil fuels. A growing movement to divest from organizations that support the extraction and transport of non-renewable sources of energy is gathering steam, so to speak. Those who advocate this divestment link their message to the impacts of fossil fuels on climate change, and are clear that their aim is to weaken the political power of the entire fossil fuel industry.

Not surprisingly, there are skeptics.

Bill Gates has suggested that fossil fuel divestment is a false solution, and has pointed out that climate campaigners rarely compare the costs of renewable energy such as solar power, on an apples-to-apples basis with fossil fuels. At the same time, Gates is putting over $2 billion of his own capital into renewable technology projects over the next five years – easily eclipsing his foundation’s $1.4 billion total investment in fossil fuels.

If you’re not yet confused, perhaps you should be! Major industrial transitions, such as the one underway towards a world supplied by renewable energy, are complex.

What does this mean for British Columbia? 

Should we be clutching our pearls as we contemplate the risks to our traditional fossil fuel-dependent industries such as natural gas extraction with its promised LNG ‘boom’? Or should we consider a major re-positioning of our province to one that actively welcomes inward investment in clean energy as we transition out of the fossil fuel sector? Is there a balance to be struck?

Recently, the Board of Change hosted US investment guru John Fullerton, who spoke in Vancouver about the concept of Regenerative Capitalism. Fullerton’s theory is that our production and consumption patterns ultimately lead to a degradation of the planet, and that financial markets must come around to investing in technologies, products and activities that go beyond ‘green’ or even ‘sustainable’ to recuperative… and ultimately regenerative.  The jury is still out as to whether captains of industry are prepared to make this leap, but we are seeing it happening in small and large ways in BC right now.

The question for us as consumers and industry: is fossil fuels divestment a risk to BC jobs or an opportunity to put our province forward as the Canadian hub for clean energy? 

CRED is actively working with partners on a research study on the opportunities and challenges to alternative and renewable energy development in BC. As part of our ongoing efforts to encourage fact-based dialogue about responsible economic development, we encourage policymakers to reflect upon the increasing risks of large capital investments in fossil fuel extraction, transport and export through our province.

CRED and our members support forward-looking policies that will stimulate investment in activities which not only generate employment and tax revenue, but which also attract the best and the brightest to our province and will establish BC as a hub for alternative energy. Our province has increasingly become known for high tech innovation, finance, tourism and advanced education. With decisive action now, BC can foster advanced industries in the fields of environmental technology and alternative energy.

CRED believes in a bright, sustainable future for BC. Check out our research on our website: www.credbc.ca

cc image by By Rafael Matsunaga (Flickr)

Revamping the NEB Process – If Not Right Now… When?

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When Kinder Morgan first introduced a proposal to threefold expand the Trans Mountain pipeline in 2013, few would have predicted that the review process itself would be as controversial as the actual proposal.

Jump ahead to today. Two years into the review, and the cost has increased, oil markets are in a prolonged slump, opposition to the project grows, and new governments in Ottawa and Edmonton have taken the reins of energy policy. All this, framed by uncertainty around how Canada’s oil sands and LNG development plans will square with our newly minted commitments signed in Paris at the COP21.

The new Liberal government has promised to revamp the National Energy Board (NEB) process, and in this promise CRED sees opportunity for real change. In fact, meaningful change seems so close, and the impacts so significant, that we see it as imperative that the process not just be tweaked at some undefined moment in the future. CRED and our members want the current process halted, and a new process built starting now. If we as a nation are going to contemplate an overall energy strategy in accordance with our international commitments, let’s do that NOW, while there are projects under review that could significantly hamstring or even compromise our ability to meet those commitments. Let’s do it so we can have a fair and transparent review of the Trans Mountain expansion, a project that could impact our province for years to come.

Let’s not forget that the current process is the same one that prompted two environmental organizations and over 35 individuals to publicly withdraw from the hearings. Economist Robyn Allan called the process “rigged” when she pulled out in May. There is also legal action against the NEB: the Tsleil-Waututh Nation has asked the Federal Court of Appeal to stop the review due to flaws in the process itself, and legal errors made by the NEB. Landowners, business people, academics and environmental advocates launched a constitutional challenge against the NEB on the basis that it unfairly restricts public participation and refuses to hear concerns related to climate change or oil sands development.

CRED was one of 100 signatories to a letter to Prime Minister Trudeau, asking for a halt to the Trans Mountain expansion pipeline review prior to the historic Paris meetings. The government has stated that the two pipelines currently under review – the TMP and Energy East – will continue in a transitional review process, but it remains unclear what changes will be made, and when.

CRED wants to ensure that the federal government implements changes immediately to ensure that these pipelines are subject to a proper climate review, including both upstream and downstream impacts, and particularly taking into consideration the potential economic impacts to BC businesses.

We are crafting an open letter to Prime Minister Trudeau and his Cabinet to revise the NEB process now, so that the Trans Mountain expansion project will be reviewed under the new process. Look for our letter to be circulated; we value your thoughts and support.

Image via Flickr creative commons user rickz

Canada’s Best Year for Clean Energy

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Clean Energy Canada has recently released their comprehensive paper evaluating how the clean energy sectors are performing in Canada, and they’re calling it a revolution, ‘Tracking the Energy Revolution – Global 2015’ to be precise. There’s no question that change is in full swing worldwide: investments, innovation and growth are all pointing towards the clean energy sector and away from fossil fuel sources.

Canada’s clean energy sector is on the rise in a big way, as investment in new clean-power generation rose 88% from 2013 (totalling appx. $10.7 billion). The report shows that the greatest investments were in wind, totalling $16.89 billion in 2014. Solar follows with investments of $6.14 billion. But don’t be mistaken, our country has a long way to go in terms of policy and support for this growing sector. While policies around clean energy have been strengthened and adapted at provincial and municipal levels, federally, there has been minimal action and support.

According to the report ranking by province, British Columbia lands at number 3 for clean energy leadership because of its commitment to clean energy and investment. BC scores lower on the policy front because of “an exemption in its clean electricity requirement that allows liquefied natural gas plants to produce electricity from fossil fuels”. The one noted policy out of BC was the legislation “intended to limit the amount of carbon pollution that the gas industry’s proposed LNG terminals may release”.provinceCleanPowerInvestment

Overall, the missing piece to keeping Canada’s growth in clean energy strong and globally competitive is federal support. Incentives and framework will pave the way for increased clean energy initiatives, and are a huge component of getting innovation to market.

You can download Clean Energy Canada’s full report from their website

English Bay Oil Spill – We Dodged Big Trouble… This Time!

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It has been 4 months since the Marathassa bunker oil spill in English Bay, and for some, the incident may feel like it’s in the rear view mirror. While we are very fortunate that the spill was small in comparison to others – particularly the recent 5 million litre Nexen bitumen emulsion leak in Alberta - for some BC businesses, the spill did have a small yet direct impact, and will not be easily forgotten.

CRED conducted research to find if there were measurable economic impacts to ocean-dependent industries from the Marathassa spill. Fortunately, our research team’s findings show that economic impacts were minimal. The reasons we avoided a more significant economic impact were the small amount of the leak itself, and because it happened just before many seasonal activities were to commence – such as commercial spot prawn fishing and summer recreational activities.

We are lucky that the time of year played a significant factor in minimizing the impact of the spill to ocean-dependent industries. Recreational fishing was affected the most, with industry representatives reporting an estimated $37,400 in lost profit, and approximately 240 hours of lost employment. While losses were minor, they impacted mainly small businesses that would have no path to compensate for their losses.

Our research shows that even such a relatively small spill as compared with others in recent history, has an effect on businesses, employment and profits, and it is these same businesses that would be hit hardest were a larger spill to occur.

And if the Oil Spill were Larger?

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A recent UBC study, conducted for the City of Vancouver, found that in the event of a 16 million litre oil spill (the equivalent of approximately one-fifth the quantity of an average oil tanker) in Burrard Inlet, economic losses could be over a billion dollars. The study determined that market recovery could have long-lasting impacts across many industries.The market recovery for local recreation could take up to 8 months, and ocean-dependent tourism could be impacted for up to 8 years. Are we prepared to assume the risks involved in exchange for the benefits of expanded bitumen traffic through our waters?

UBC study: a major spill in Burrard Inlet could cost the Vancouver economy $1.2 billion

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As the National Energy Board process gets further along for the Trans Mountain Expansion review, conversations are growing and research is building about the risks of the project. Since CRED first published the report ‘Assessing the risks of Kinder Morgan’s proposed new Trans Mountain Pipeline’ in 2013, more and more research has come to light about risks associated with this project. Reports around environmental, health, economic and reputational impacts have all shone a light on risks that weren’t immediately clear.

One of the latest reports comes from UBC Fisheries and Oceans and was led by CRED Advisor, Rashid Sumaila. The report ‘Potential economic impact of a tanker spill on ocean-dependent activities in Vancouver, British Columbia’ found that a major spill in Burrard Inlet could cost the Vancouver economy $1.2 billion. This estimate is alarming, and doesn’t include the cost of clean-up, response, or recovery. The report looked at the potential impact of an oil spill in Burrard Inlet on five key industries:

  1. Commercial fishing
  2. Port activities (shipping and cruises)
  3. Inner harbour transportation
  4. Tourism (on-water recreation, ocean-based and waterfront events, visiting beaches and seawall)
  5. Local use of the waterfront

Through the analyses of three potential spill scenarios: no spill, a spill in May and a spill in October, the study found that a 16,000 m3 oil spill in October would cost Vancouver’s economy just over $1 billion. If that same spill happened in May (when there is more ocean-dependent economic activity occuring) the economic cost goes up to over $1.2 billion.

The report concluded that an oil spill would result in closures of commercial fishing, floatplane activity and closure of the Vancouver port, and it could continue to impact ocean-dependent tourism for 8 years. Those are just some examples of the impact a spill would have on businesses and jobs dependent on a healthy marine environment. We’ve already seen that it doesn’t take much to close industries down. Crab and prawn fishing were shut down by the department of Fisheries and Oceans and the Musqueam Band in April after an oil spill leaked from a grain carrier in Burrard Inlet, and that was a minor spill in comparison to the potential scenario that this study is based on.

Kinder Morgan Canada’s spokesperson Ali Hounsell is quick to remind the public that “the Trans Mountain pipeline and oil tankers have been safely operating in this community and through this harbour for the past 60 years”. Even if this is the case, will this hold true when the number of tankers have increased fourfold?

This UBC study focuses on impacts to ocean-dependent economic activities within the City of Vancouver; however, several other communities such as the Tsleil-Waututh, Musqueam and Squamish First Nations peoples, who depend on the Burrard Inlet for food as well as social and ceremonial purposes would also be impacted. Those impacts need consideration, as do the other issues such as stranded assets, spills on land, and the impact on BC’s brand.

 

image courtesy of Jan Zescheky

Indirect impacts of the oil spill in English Bay

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While sitting at my computer in Gastown, I do a Google search for ‘Vancouver’ and the first result that comes up is a headline from CBC: ‘Feds’ oil spill response blasted by BC premier, Vancouver mayor’. There are four other links about the oil spill, nestled amongst links to Destination BC, Vancouver hotels, and other tourist sites, all of which are diminished by the oil spill headlines.

Reports say that about 2,800 litres were spilled into the waters of English Bay, but the amount is not necessarily the most important fact, nor is how much has been recovered. It’s the fact that regardless of quantity, this spill impacts the branding of Vancouver as a tourist destination, and could devalue every dollar invested in promoting BC as Super, Natural British Columbia. That’s important.

In addition to any direct effects, we need to be conscious of the indirect effects like the effects on perception. A study commissioned for the Louisiana Office of Tourism two months after the Deepwater Horizon explosion, found that perception overshadowed actual impacts: a quarter of people thought that leisure activities (swamp tours, boating and hiking) were closed because of the spill, when in fact, this was not the case. This recent spill in Vancouver is nowhere near the catastrophe of the Deepwater Horizon spill in the Gulf of Mexico, but it still makes headlines.

What do tourists hear about this spill? Will this impact their decision to visit later this summer? We can’t quantify the people who are contemplating a trip to BC, who then decide not to visit.

Moving commodities through the port of Vancouver brings both risks and benefits, but this spill is a reminder to question who benefits and who takes on the risks, and are those equal?