BC Update - BC Government Caucus

BC’s Shared Prosperity and
Shared Potential
Integrated Natural Resource Development
Premiers BC Natural Resource Forum
January 23, 2014
Greg D’Avignon
President and CEO
Integrated Natural Resource Management
Market
Demand &
Opportunity
First Nations
Reconciliation
Engagement
Collaboration
&
Interdependence
People Skills
and
Prosperity
Common Fact
Base
Innovation
Market Demand and Opportunity
Market
Demand &
Opportunity
First Nations
Reconciliation
Engagement
Collaboration
&
Interdependence
People Skills
and
Prosperity
Common Fact
Base
Innovation
1999 Shanghai
Population 12,030,000
2012 Shanghai
Population 23,470,000
BC Exports to Pacific Rim Now Almost Equal to US
25,000
BC Exports, millions $
US
20,000
15,000
10,000
Pacific Rim
5,000
0
00
Source: BC Stats.
01
02
03
* projection based on first 11 months
04
05
06
07
08
09
10
11
12
13*
6
What’s Going to Drive Our Potential Prosperity
Building the equivalent
of Metro Vancouver
China will add
133,974,285 people
to their cities in the next
44
every
days for the
rest of the decade
7 Years
In 2012 Canada
India had
27.4
new subscribers
had
million
cell phone subscribers
BC’s middle
class is 1.4 m with
median income
growth of
8% since 2006
Data ; McKinsey, OECD, World Bank, ITA, CRTC, Stats Can
9 million
last month
India & China’s middle class will grow
to 2
billion people by 2025
spending $12 trillion
2000class – in 2000
The global middle
EU
34%
Others
29%
India
1%
China
1%
Japan
11%
US
24%
2040
The global middle
class – in 2040
Others
33%
EU
10%
US
4%
India
30%
China
20%
Japan
3%
Projected Increase in Real Income Per Person
2010-2050
900%
800%
700%
600%
500%
400%
300%
200%
100%
0%
Source: HSBC Global Research.
Asian Economies
10
BC Capital Spending Surges
50
BC Capital Investment, billions $
45
40
35
30
25
20
15
10
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Statistics Canada, Public and Private Investment Intentions.
2013 is planned investment spending
11
Solutions Through a Common Fact Base
Market
Demand &
Opportunity
First Nations
Reconciliation
Engagement
Collaboration
&
Interdependence
People Skills
and
Prosperity
Common Fact
Base
Innovation
Fossil Fuels Dominate Global Energy Consumption
18,000
Global Energy Consumption by Fuel, millions tonnes oil equivalent
Renewables, 2%
16,000
Hydro, 6%
14,000
Nuclear, 5%
12,000
10,000
Coal, 30%
8,000
6,000
Natural Gas, 24%
4,000
2,000
0
1990
Liquids,
33%
1995
2000
2005
2010
2011
2015
2020
Source: BP Energy Outlook 2030, shares are for 2011 consumption, shares may not sum to 100 due to rounding
2025
2030
13
14
Growing Energy Consumption in Asia
18,000
Energy Consumption by Region, millions tonnes oil equivalent
16,000
14,000
Africa
12,000
Asia Pacific
10,000
8,000
Middle East
6,000
Europe & Eurasia
4,000
S & C America
2,000
0
1990
North America
1995
2000
2005
Source: BP Energy Outlook 2030, shares are for 2011 consumption.
2010
2011
2015
2020
2025
2030
Rising US oil and gas production
Major shale basins around the world
BC Energy Realities
BC is a Global Energy Player as is Alberta and Canada,
» BC has over 200 years of natural gas supply we know of more Hydro
power that any other province as a percentage of energy supply
(94+%)
We have had Oil and Gas pipelines for over 80 years, world
leading research in pipeline advancements and fracking
Up to 1,400 tankers per year travel our coast to Cherry Point 4th
largest refining centre on the West Coast across from Victoria
Vancouver Island would shut down in a week, if not for the barge
from Burnaby several times per week
*US Energy Information Administration
BC Environmental and Global GHG Leaders
BC leadership position on GHG with Clean Energy Act and carbon
pricing, but started from a base of renewable energy of 94% and
lower per capita emissions than most provinces/states
We have been fracking with different geology and world leading
technical/regulatory/operational transparency for over 60 years
Carbon dioxide emissions from global energy projected to rise by
29% to 2035, but mitigated by the increasing use of Natural Gas transition from more carbon intensive fuels.
Basis of all estimates on how to reduce GHG globally including
ENGOs fact base
BC poised to be a leader in that global GHG reductions through
LNG supported fuel switching
Environmental Confidence, Pride and Export of Canadian
Expertise and Values for Energy
British Columbia and Canada
» Environmental, Social, Economic sophistication and the rule of
law across governments
» Competitive producers with global expertise that have driven
clean energy and extraction innovation
Sustainability and Environmental Gas Producing Competitors
Iran, Russia, Qatar, Turkmenistan
» 50 percent of proven gas reserves
» Environmental, Regulatory and political stability vs Canada
BC and Canada as World Leaders in extraction, prevention and
response an export industry with Canadian expertise and values
Canadian and BC Natural Resource Innovation
Market
Demand &
Opportunity
First Nations
Reconciliation
Engagement
Collaboration
&
Interdependence
People Skills
and
Prosperity
Common Fact
Base
Innovation
Canadian Energy Innovation in our DNA
Source
Peter Tertzakian ARC Financial
Canadian Energy Innovation
Abraham Pineo Gesner
1846-1854
Bitumimous Coal and Shale Oil
Natural Resource Innovation
People Skills and Prosperity
Market
Demand &
Opportunity
First Nations
Reconciliation
Engagement
Collaboration
&
Interdependence
People Skills
and
Prosperity
Common Fact
Base
Innovation
Share of Canadian population aged 15-64
By 2021,
one in four
Canadian
workers
will be 55
or older
25
Productivity
GDP per person hour of work in $US 2012
90
83
80
70
60
50
40
30
20
10
0
60.2
53.3
46.3
44.6
Why BC’s Resource Industries Carry
Disproportionate Weight
Strong export-orientation with direct investment attraction -NEW $$$
Relatively high wages (mining is #1 in BC; oil and gas, forestry, also
pay well above average)
Head offices drive IP, Innovation, Services, Exports and Higher
Wages- 800 Mining HQ In Vancouver– 4,300 Canadian projects
globally – exporting BC and Canadian sustainability and expertise
Most business inputs used in resource extraction and processing
are sourced domestically rather than imported (raw materials,
energy, labour, transportation, business services)
» import content of BC resource products is quite low
» machinery/equipment is the main imported input
27
28
Resources Dominate BC’s Exports
BC Exports by Commodity, billions $
8
7
2007
2009
2012
Coal
Mach. & Agriculture
Equip.
6
5
4
3
2
1
0
Wood Prod
Source: BC Stats.
Pulp &
Paper
Metallic
Mineral
Prod
Natural
Gas
other
First Nations Reconciliation and Engagement
Market
Demand &
Opportunity
First Nations
Reconciliation
Engagement
Collaboration
&
Interdependence
People Skills
and
Prosperity
Common Fact
Base
Innovation
Nation Building
Vision of Sir John A to Realize Canada’s Potential
Sir John A MacDonald in March 1885 tabled the
Electoral Franchise Act,
“I am prepared to extend the federal vote
to all Indians (including those in Manitoba
and BC), whether enfranchised or not,
without conditions different from those
imposed on other British subjects.”
March 1885 Hansard
The Act was rescinded by Laurier in 1889, with the treaty process stopped in
1905 with BC having to wait 61 years for PM Diefenbaker to begin to reengage
in rights and respect toward First Nations.
BC’s Leadership an Untold Story
There are 1000’s of agreements and strong relationships that have
been developed by industry and First Nations in BC
First Nations engagement occurs in most areas of the world with
respectful collaboration and understanding
It is difficult and takes time often with uncertainty, risk, frustration
and expectations that are not aligned to the capacity of companies or
First Nations
There are a myriad of young First Nations leaders across the province
that want to move forward for the benefit of their people and BC
This generation can make the future happen we just need to decide
collectively to do it
What to Do to Reconcile and Advance Success ?
There is a lot to do to create certainty, reconciliation and
advance reasonable shared expectations that lead to
success
What’s still needed;
» Earlier stronger relationship building by industry and all levels of
government
» Capacity building for First Nations, supported by the Crown with
confidence to make timely informed decisions
» Greater support for education and more opportunity in the job
market and business ownership
» Greater certainty and clarity of roles and processes
» Celebration of success
What’s in it for Me and Us?
Culture of
How not Why
First Nations
Reconciliation
Engagement
Collaboration
&
Interdependence
Innovation
Market
Demand &
Opportunity
Common Fact
Base
One Way to Think About the Inter-linkages
If northern BC became a separate
country then all of the products and
services sold to resource industries
from the lower mainland would be
“exports”
In this world these transactions would
garner more attention because they
would be tracked and counted as
international trade
Note that the remainder of BC would
still benefit from the trading
relationship (in terms of jobs and
income taxes etc.) but would lose the
resource royalties
34
Resources Generate Between $3 and $4 Billion of
Direct Revenues for the Crown
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
BC Resource Revenues, millions $
35
Other resources
Forests
Other energy and minerals
Columbia River Treaty
Crown land tenures
Natural gas royalties
Of interest:
West Van
School District
2013 Budget =
$64.7 million
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Source: BC 2013 Financial and Economic Review.
Vancouver Resource Town
Vancouver was and is a Resource town
BC Top 100 Companies
39 Companies and 8 Crown Corps are in Metro
Vancouver contributing to BC’s Natural Resource Sector
Engineering
Finance
Forestry
•
AMEC
Inc.
•
Advantage BC
•
Council of Forest Industries
Ausenco Sandwell
•
Agricultural Bank of China •
•
Int’l Forest Products
•
BMO Financial Group
•
SNC-Lavalin
•
Mercer International Inc
•
Canaccord Financial
•
Stantec Consulting
•
TimberWest Forest Corp
•
CIBC
•
Ainsworth Engineered
•
West Fraser \timber CO.
•
HSBC Bank Canada
•
Leith Wheeler Investment
•
Macquarie Capital
•
Marsh Canada Ltd.
•
Odlum Brown
•
Raymond Jaymes
•
Royal Bank and RBC Capital
Markets
•
Scotiabank
•
TD Bank
Industry Associations
•
AME BC
•
BCTIA
•
Clean Energy BC
•
Coast Forest Products Ass.
•
MABC
Professional Services Professional Services Professional Services
•
Canadian Manufacturers & •
McCarthy Tetrault
•
FaskenMartineau •
Accenture Inc
Exporters
•
McMillan
Fraser Milner
•
Alexander Holburn •
MNP
•
Hennan Blaikie •
•
Blakes
Transportation
•
National
•
Hemmera
•
BLG
•
Arrow Transportation
Odgers Berndtson
•
H+K Strategies •
•
BHT
•
CN Railway
•
PwC
•
Korn/Ferry
Deloitte
•
Global Container Terminals •
•
Stikeman Elliot
•
KPMG
•
Ernst & Young
•
MMM Group Ltd.
•
Lawson
Ludell
•
Farris
•
Port Metro Vancouver
Electricity
•
Alterra Power Corp
•
BC Hydro
•
Brookfield Asset Mgmt
•
Innergex Renewable
Energy
•
Valard Construction
•
Veresen
Mining
•
Cardero Coal Ltd.
•
Curis Resources Ltd.
•
Imperial Metals
•
Nyrstar Canada
•
Rio Tinto
•
Taseko Mines
•
Teck Resources
•
Walter Energy
Oil & Gas
•
Fortis BC
•
Pacific Northern Gas Ltd.
•
Spectra energy
•
Shell
•
Enbridge
Other
•
Corix
•
Mitsubishi Canada Ltd.
•
TELUS Corporation
•
Finning
35 Stories of BC’s
Natural Resource Industries
$11.5B
Revenue (2011)
Insurance & Risk Advisors
–Mining/Energy/Forest
Nevada, Mexico, Peru
Mineral Exploration
Vancouver’s
largest law firm,
energy, enviro
$308m P3 in
Ft. St. John
Gold exploration in
BC and Yukon)
$8B+ in Canadian
Assets
BIV Top 3 Fastest Growing
Company 2012
(Int’l Mining)
Developing $90+m
mine in NE BC
$670m Revenue (2011)
$1.5B capital inv. in Mt. Milligan
International
trade finance
Practice areas include
transp., enviro., aborig.
Zena Mining Corp
Provides tech solutions
to energy, oil/gas
Global energy shipping, 220+
employees in Vancouver
$3B in assets
What is BCBC Doing?
BC Connects
Lower Mainland Economic Literacy and Connection
BC Agenda for Shared Prosperity
First Nations Engagement and Certainty with Government
Corus Radio Putting BC to Work March – Late April
Innovation and Productivity Strategy
Asian HQ Joint Strategy
Competitiveness
» Tax
» Process and Regulatory efficiency and innovation
BC Connects
The World Needs More BC