VANCOUVER—The promised economic benefits from coal mines in northeastern British Columbia (BC) are wildly overstated, while mining company pledges to protect vulnerable wildlife species are rarely met, a team of researchers concludes in a new report that has implications for natural resource management across Canada.
The research, released today by the Canadian Centre for Policy Alternatives and the Corporate Mapping Project, was conducted by a team of researchers—including an economist, financial analyst and two economic geographers—who looked closely at the economic and environmental impacts of three active coal mines in northeastern BC. The mines are in a region where scientists predict that due to ongoing habitat destruction caribou populations will go extinct within our lifetimes.
“We found that approval of these mines was based on overstated benefits expectations,” says Robyn Allan, an independent economist who has held many executive positions in the public and private sectors.
“For the twenty-year period from 1999 to 2019, $250 million in corporate taxes were predicted while net corporate taxes paid up to 2016 were net zero. After Conuma Coal purchased the three mines out of receivership and reopened them, corporate taxes paid totaled $86 million. With Conuma’s weakened financial performance, even these taxes may be refunded—if not in whole, in part,” she added.
The researchers also found that employment predictions were only 59 per cent of those promised and for the workers that were hired, their employment came much later than predicted. Further, due to the boom and bust nature of the mining industry, workers faced layoffs as mines were put on care and maintenance.
In order to have resource projects approved, and to receive the necessary permits for their projects, resource companies promise regulators they will mitigate the environmental impacts of their projects. They position those impacts as necessary trade-offs required in order to realize promised economic returns in the form of tax revenues, employment and production activity.
The researchers of Who Benefits from Caribou Decline reviewed publicly available financial information to measure the actual financial and economic impacts of the Willow Creek, Brule and Wolverine coal mines in northeastern BC over the last two decades to see if the promised benefits materialized. They found those economic benefits were highly overstated while studies show that the environmental impacts continue to devastate endangered caribou herds in the region.
“These mining projects are not just falling short on returning promised economic benefits, they are also subsidized by the BC and Canadian governments. Hundreds of millions of dollars in infrastructure support was provided for the Northeast Coal Project in the late 1970s and there are current subsidies inherent in unfunded reclamation liabilities,” explained Peter Bode, a financial analyst who worked on the report.
“Subsidies were also provided during exploration and development including flow-through shares and the federal Mining Exploration Tax Credit. We found that these amounted to at least $1.4 million between 1999 and 2006,” he added.
The woodland caribou in this region—a distinct population called Central Mountain caribou—are listed under Canada’s endangered species legislation, the Species at Risk Act. While there are numerous provincial and federal legislative and regulatory instruments designed to protect them, the impacts of resource extraction, including coal mining, continue to threaten the species' existence. Were it not for the efforts of West Moberly First Nations and Saulteau First Nations, the caribou species in the Peace River Region would likely already be entirely extinct.
“Our research shows that not only do the costs of mining activity in northeastern BC outweigh the benefits, but the public is in fact helping to fund the extinction of caribou by subsidizing exploration and development,” says Jessica Dempsey, an associate professor of Geography at the University of British Columbia and one of the report authors.
The researchers are calling for a public inquiry into the economic impact of all BC mines along with legal and policy reform to ensure transparent and accountable economic assessments of proposed resource projects in the province. They also point to the need for a full accounting of all subsidies to industries linked to habitat loss and species extinction in BC, including for caribou and a moratorium on new mines in the Central Mountain caribou habitat.
“The narrative of the economic benefits of resource extraction needs to be challenged,” says Rosemary Collard, an assistant professor in geography at Simon Fraser University whose research focuses on the political economy of extractive industries in endangered species habitat. “We looked closely at coal mining and caribou, but we can assume that there is relevance here for other sectors like other mines, oil and gas and forestry in our province.”
For more information and to arrange interviews, please contact Jean Kavanagh at 604-802-5729, [email protected].