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Beyond fly-in, fly-out

I was pleased to see BIV columnist Peter Ladner write about his recent "whirlwind" trip to northeast B.C. to see the province's burgeoning energy sector.

I was pleased to see BIV columnist Peter Ladner write about his recent "whirlwind" trip to northeast B.C. to see the province's burgeoning energy sector.

Although I agree that a trip to the north to see industry in action can provide a better understanding of how the economy really works in this province, such trips only tell part of the story and can leave the impression the only reason to come up north is to make money and then leave again.

This gold rush, fly-in fly-out mentality is a perennial problem for the northern economy, be it in British Columbia or elsewhere in middle and northern Canada.

It sheds light on a regional challenge that the money made here continues to flow south, which, in the long-term, threatens the northern economy more so than major urban centres like Vancouver, which have large enough populations to be self-sustaining economies.

With the exception of regional centres like Prince George, the north generally has yet to diversify beyond the resource economy.

But gone are the days of company towns, as many corporations now prefer to fly their workers into and out of temporary camps.

In Fort St. John, for example, there are as many as 4,000 transient oil and gas workers who make sizeable incomes but have little incentive to buy a home in the community, pay taxes to the local government for the services they use or start a family and invest in the growth of that city.

They fly up for a whirlwind of work and then head south again with heavy wallets and tales about the rough and tumble north.

As resource companies become more efficient, require fewer permanent employees and rely more heavily on transient workers, the return they provide to the community is less than it once was.

Do they provide industrial taxes? Yes.

Can they create more jobs and generate revenue for local service and supply businesses? Yes.

Do they result in significant and permanent population increases? Not necessarily.

The economy of a community can only grow if it increases consumers, the rate of consumption or both.

In Prince George, for example, the economy has continued to grow during the last several decades despite the fact that the city's population has remained relatively flat at around 80,000.

That's because the existing population has grown wealthier and increased its rate of consumption (the public sector has also centralized services here resulting in a local economy that's more diversified and resilient than it once was).

What then for other, smaller northern communities?

Without an influx of permanent new residents or a major new industrial tax base, small northern towns will be forced to make-do with the population and tax base that they have.

This becomes increasingly challenging when you consider that all communities are faced with aging road, sewer, water and other infrastructure needs that can only be remedied with a "major-league injection of investment", to quote the editors of this paper.

On top of that, many of the region's small communities have a significant and increasing population of seniors, who require better and more costly healthcare, housing, recreation and transportation services.

To meet these challenges with no increase in population or wealth, small local governments will be forced to increase tax rates for existing residents and businesses and/or ask senior levels of government for infrastructure grants.

This coupled with flat or declining birth rates, a population shift to urban areas and the centralization of government services in major centres paints a grim future for small towns in a post-Baby Boomer world.

Of course, this is a gross over-generalization.

If even a fraction of the proposed $150 billion in major projects in northern B.C. goes ahead, it will generate a whirlwind of activity that will benefit small and larger northern communities alike, for a time.

But what will the north look like in a generation when the boom is done?

Will there be another boom?

Maybe, but I'd hedge my bets.

Without a permanent increase in consumers or the rate of consumption (read taxpayers and tax revenue), small, resource-based communities will need to find another way to continue to pay for an increase in the quantity and quality of services that residents demand.

If they can't, residents will naturally migrate to larger centres, which will threaten the very existence of small municipalities, forcing some, perhaps, to unincorporate.

What can be done now?

Ensure more dollars made in the north are reinvested in the north

Invest in major infrastructure improvements to improve the flow of goods and traffic

Expand programs that support local business growth and

diversification

Invest in renewable energy

None of these items is a silver bullet, but they might perhaps help to lay the groundwork for healthier communities in the long run.

I agree with Ladner that the energy boom in B.C. is a stop along the way - let us, the north, use it to build sustainable communities knowing that no one is going to do it for us.

Joel McKay is director of communications for the Northern Development Initiatives Trust.