Pipeline video touts economic benefits of expansion

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Kinder Morgan’s slick new video on YouTube touting the economic benefits of the proposed Trans Mountain pipeline expansion claims the taxes it pays could be a boon for Burnaby taxpayers.

But Burnaby’s mayor and the councillor who heads the city’s finance committee aren’t convinced.

Against tranquil music, the video’s voiceover states that the $5.4-billion project cost and $3 billion in operating costs over 20 years will bring economic benefits including billions in tax revenues.

“Every time a tanker docks at Westridge Marine Terminal in Burnaby, it brings $310,000 in value to the local economy,” it says. At this point, the graphic notes that will mean $126 million a year, which by those figures would translate to 406 tanker ships annually.

The project, which runs from Edmonton to Burnaby, would almost triple the pipeline’s capacity, from the current 300,000 barrels of crude oil a day, to 890,000 barrels a day, to allow for the increased export of oil sands crude to overseas markets.

“It means $2.1 billion in additional federal taxes and $1.7 billion in additional provincial taxes,” of which $1 billion would be to B.C., according to the figures shown on the video.

It says Kinder Morgan will pay $500 million in additional municipal taxes over 20 years.

“In Burnaby, in one year alone, tax revenues could be used to hire 132 extra firefighters or more than cover the annual garbage collection costs.”

Kinder Morgan spokesperson Lisa Clement said by email that the company’s figures were calculated by an “independent economist.”

Kinder Morgan currently pays $7 million a year in property taxes to Burnaby and expects that to increase by $6.2 million as a result of the expansion project increasing the value of the pipeline right-of-ways, its Burnaby storage terminal and Westridge Marine Terminal, Clement said.

The firefighter figures are “purely conceptual” to help people understand the economic impact of the pipeline and were calculated using the total $13.2 million in taxes divided by the approximate $100,000 annual salary of a Burnaby firefighter.

While the pipeline is federally regulated, it is not exempt from municipal taxes, Clement said.

“As we expand assets of the pipeline and facilities, the value of the property increase, and thus more tax paid on the new assets.”

In areas where the pipeline will be twinned along the existing right-of-way, “the property tax will almost double in those communities, as the asset doubles,” she said. “In areas where the expanded route may divert from the existing right of way, the property tax may increase even more than double if there is more km or inches of pipe laid.”

About one quarter of all the municipal taxes the company will pay over 20 years will be to Burnaby because of the location of its terminals there, she said.

But Burnaby Mayor Derek Corrigan, on record as opposing the project, isn’t buying it.

“Our staff have certainly not been looking at any significant tax benefits flowing through to us as a result of any improvements they make,” Corrigan said.

“We haven’t been able to substantiate that at this point,” added Coun. Dan Johnston, chair of Burnaby’s finance committee, of the company’s tax revenue claims.

Neither he nor Corrigan believed that the right-of-ways would be the source of much tax revenue due to it being federally regulated.

“Economists and the BC Assessment Authority might have two different perspectives on how the numbers are put together,” Johnston said.

As for the firefighters, Corrigan said, “They keep talking about firefighters because they know that if they put this bigger operation up there it’s likely our firefighters could be very, very busy. So they pick firefighters as saying, ‘we know we’re a fire hazard, we know we’re dangerous to your community, but I tell you what, here’s our solution, we’ll buy more firefighters for you.'”

He estimated that the actual cost to hire one firefighter is $150,000 once you include salaries, benefits, equipment, uniforms and potentially even fire halls to house them.

At that calculation, the $6 million in new tax revenue Kinder Morgan claims it would pay would translate into 40 new firefighters.

“They can pay us for garbage but if there’s one spill or minor incident the city could spend way more than that on cleanup costs,” added Johnston.

While the video notes that the project will create 4,500 jobs “at the peak of construction,” that won’t likely translate to local, ongoing jobs, Corrigan said.

“The amount of additional workers is limited to maybe a dozen,” he said. “In fact they keep taking workers out and running their facilities remotely … And that’s one of the big problems with safety, is they keep withdrawing workers and doing it technologically.”

As for the video itself, Corrigan was impressed by its production value.

“The one thing you won’t see them do is, even though they’re required to do an environmental assessment, is do any kind of glitzy presentation like that on the environmental implications.

“There won’t be any money spent on that side of the equation.”

Watch the video: http://bit.ly/1adoQRH