Trent Ernst, Editor
The new Fair Share Agreement, called the Peace River Agreement was signed in Dawson Creek last Friday.
The agreement was hammered together over the last few months with Blair Lekstrom as chief negotiator for many of the local governments in the South Peace, including the District of Tumbler Ridge.
The new agreement will see $1.1 billion come to local governments in the Peace over the next 20 years, as well as an additional $3 million signing bonus this year to be split amongst the Districts who signed, and a $1 bonus for the Peace River Regional District, bumping the 2015 amount to $49 million.
This is in addition to the $1,890,105 the District has already received as their part of the 2015 fair share allocation.
“The new agreement will provide a permanent framework for municipalities and rural areas to plan for future needs and provide financial stability and certainty to residents of the region by providing to the local governments annual payments that recognize the lack of access to the industrial tax base in rural, unincorporated areas,” says a release from the Province. “These payments will ensure these local governments can continue to make the critical investments in local services and infrastructure over the coming years to maintain the region as a growing service sector for industry, including natural gas.”
The new agreement will see annual payments, starting at a base of $50-million starting in 2016 and carrying on for the next four years. In 2020, the rate will increase by two percent annually through to at least 2035. There will be two opportunities—in 2023 and 2031—to renegotiate the rate increase, as well as renegotiate a new base and annual rate of growth to take effect after 2035.
The amount of payments was of the most contentious issues for many local governments. The previous agreement saw the rate of money paid to the seven local governments in the Peace Region (Tumbler Ridge, Chetwynd, Hudson’s Hope, Fort St. John, Taylor, Dawson Creek and Pouce Coupe,) starting at a base of $20 million per year, and indexed to industrial growth.
For 2015, that indexed value rose to $46 million. By 2019, when the previous agreement was set to expire, that value was expected to have risen to $75-million.
This was one of the biggest issues for the District of Taylor and the City of Fort St. John, saying that the municipalities will get about $24-million less over the next four years than under the previous agreement.
Ultimately, though, they chose to sign the agreement along with the other municipalities, saying they plan on re-opening the agreement once the province starts to receive taxes from LNG.
Funding comes from the Province as a lump sum grant to the Regional District. The Regional District in turn distributes the funds among the seven member municipalities based upon a very unique and adaptable distribution formula, which stays the same.
In its simplest form the distribution formula considers, on an annual basis, population, municipal assessment in Classes 2, 4 and 5 and unincorporated assessment in Classes 2, 4 & 5. The effect is that those municipalities with high population and servicing requirements, with little or no industrial tax assessment get the largest share of the funding and those municipalities with a large industrial assessment and relatively small populations get the smallest share.
With the mines closed Tumbler Ridge may stand to get more, though currently the mines continue to pay taxes as if they were still in operation. Because of its large municipal boundaries, Tumbler ridge has more access to industrial assessment than many municipalities.
Premier Christy Clark says that Northeast communities play a fundamental role in growing BC’s economy. “That is why we’re committed to making sure the region gets the long-term benefits of this growth in a way that provides certainty and stability.”
Mayor Don McPherson says that Tumbler Ridge has benefited from earlier versions of this agreement, particularly in times of economic struggle “We sincerely appreciate the continued steps taken by our provincial government and our regional partners in support of this agreement. The commitments made will continue to support the economic certainty of our region. These commitments will also strengthen our capacity for proactive and effective reinforcement and expansion of our municipal infrastructure.”