Resource Revenue Sharing with Rural Communities

These are two motions coming forward to the 2011 UBCM Convention
B29 RURAL DIVIDEND Barriere
WHEREAS the “Rural British Columbia Project Discussion Paper Series”, under an initiative called “Reversing the Tide”, has identified a number of best practices that, if put in place, would spur economic revitalization in the rural BC economy;
AND WHEREAS reinvesting a percentage of the natural resource dollars back into the regions from which they are extracted has proven to be a positive step in rural economic revitalization in other parts of the world:


THEREFORE BE IT RESOLVED that the provincial government be requested to develop a program that would provide additional financial and capacity building resources for rural BC communities, as well as create a “Rural Dividend” that would return to rural BC communities a fair share of the revenue created by rural-based resource industry activity in their respective regions.


ENDORSED BY THE SOUTHERN INTERIOR LOCAL GOVERNMENT ASSOCIATION
UBCM RESOLUTIONS COMMITTEE RECOMMENDATION: Endorse with Amendment Proposed
THEREFORE BE IT RESOLVED that the provincial government be requested to develop a program that would provide additional financial and capacity building resources to communities by returning a fair share of the revenue created by resource industry activity in their respective regions.


UBCM RESOLUTIONS COMMITTEE COMMENTS:
The Resolutions Committee notes that UBCM members have sought opportunities for new revenue sources(Financing Local Government Study 1998) and the Communities and Resources Committee recommended in its1998 policy paper that “a portion of the stumpage revenue must remain in the harvesting area (revenue should start flowing back to the producing communities).”
More recently, UBCM members have supported and requested that the Province share resource revenues with local governments (2009-B30, 2004 Resource Revenue Sharing Policy Paper, 2003-B30).
The Committee has offered an amendment to reflect the broader policy position of resource revenue sharing that has been adopted by the membership.


B30 REVENUE SHARING FROM MINING ROYALTIES Kitimat-Stikine RD
WHEREAS mineral industry activity involves non renewable resources and creates demand on local
government infrastructure and services such as community water systems, roads and emergency and protective services;
AND WHEREAS property taxation alone is often inaccessible and insufficient for affected communities
within a region to provide needed services and infrastructure:


THEREFORE BE IT RESOLVED that UBCM call upon the provincial and federal governments to
provide revenue sharing from natural resources for local governments affected by resource extractions
in their regions.


ENDORSED BY THE NORTH CENTRAL LOCAL GOVERNMENT ASSOCIATION
UBCM RESOLUTIONS COMMITTEE RECOMMENDATION: endorse


UBCM RESOLUTIONS COMMITTEE COMMENTS:
The Resolutions Committee notes that UBCM members have endorsed resolutions and policy papers that have sought a sharing of resource revenues with local governments recognizing that communities should be compensated for the natural resources that are extracted from their regions.
The Communities and Resources Committee recommended in its 1998 policy paper that “a portion of the stumpage revenue must remain in the harvesting area (revenue should start flowing back to the producing communities).”


In 2004, members endorsed the 2004 Resource Revenue Sharing Policy Paper, which specifically sought a sharing of resource revenues with local governments (forest stumpage, mining royalties) and prior to that a 2003 resolution, B30, made a similar request.

There is a huge fiscal imbalance in BC.   The province collects 100% more money from rural BC than it offers in services to rural communities.   The gap is about $5000 per rural resident per year.   A large part of this imbalance from natural resource revenues, though not all of it.   


If the majority of BC, and rural BC represents 90% of the landbase in BC, is to remain sustainable there needs to be mechanisms in place to allow rural communities to look after the myriad of issues that are currently being neglected.  Rural local governments have become beggars among the primary sources of wealth in this province.


Urban BC would have to see much higher taxation if there were no resource revenues coming in.   The provincial government would see $3.5 billion dollar gap in the budget, that would be a record setting deficit.   


There has been some resource revenue sharing with some rural communities, specifically with the First Nations, but ultimately all rural communities should benefit.   The various forestry, oil and gas, and mining agreements that have been signed in BC with the First Nations means that BC First Nations are the first ones in Canada with real own source government revenues to operate aboriginal governments.   There have been some dramatic improvements in governance in rural BC First Nations over the last five years.


If these motions pass, the BC Government should take note and act on the resolutions.   For Christy Clark, this would be a core way to bolster support in rural BC.   The HST vote results, where rural BC voted 61.85% to scarp the HST, indicate to me there is an ongoing populist revolt in rural BC that is pissed off with government.   The BC Liberals should be secure in re-election in 25-30 ridings, but those are almost all in Metro Vancouver or the Fraser Valley.    The current mood in rural BC is not good for the government.