BCs Shared Prosperity and Shared Potential Metro Vancouver and BCs - - PowerPoint PPT Presentation

BC’s Shared Prosperity and Shared Potential

Metro Vancouver and BC’s Natural Resource Potential

February 13, 2014

Greg D’Avignon President and CEO

BC’s Integrated Natural Resource Potential

Collaboration & Interdependence

People Skills and Prosperity

First Nations Reconciliation Engagement Market Demand & Opportunity Innovation Common Fact Base

Market Demand and Opportunity

Collaboration & Interdependence

People Skills and Prosperity

First Nations Reconciliation Engagement Market Demand & Opportunity Innovation Common Fact Base

1999 Shanghai Population 12,030,000

2012 Shanghai Population 23,470,000

BC Exports to Pacific Rim Now Almost Equal to US

5,000 10,000 15,000 20,000 25,000 00 01 02 03 04 05 06 07 08 09 10 11 12 13*

BC Exports, millions $

Source: BC Stats. * projection based on first 11 months 6

Pacific Rim US

What’s Going to Drive Our Potential Prosperity

China will add

133,974,285 people

to their cities in the next 7 Years Building the equivalent

• f Metro Vancouver

every 44 days for the rest of the decade In 2012 Canada had 27.4 million cell phone subscribers

India had 9 million

new subscribers

last month

BC’s middle class is 1.4 m with median income growth of 8% since 2006 India & China’s middle class will grow to 2 billion people by 2025 spending $12 trillion

Data ; McKinsey, OECD, World Bank, ITA, CRTC, Stats Can

EU 34% US 24% Japan 11% China 1% India 1% Others 29%

2000

The global middle class – in 2000

EU 29% US 20% Japan 8% China 5% India 2% Others 36%

2010

The global middle class – in 2010

EU 21% US 12% Japan 6% China 13% India 11% Others 37%

2020

The global middle class – in 2020

EU 14% US 7% Japan 4% China 18% India 23% Others 34%

2030

The global middle class – in 2030

EU 10% US 4% Japan 3% China 20% India 30% Others 33%

2040

The global middle class – in 2040

Projected Increase in Real Income Per Person 2010-2050

0% 100% 200% 300% 400% 500% 600% 700% 800% 900%

Asian Economies

Source: HSBC Global Research. 13

Incomes Rising in Developing Economies Faster, and at a Greater Scale, Than Any Previous Time

Sources: McKinsey & Company; Angus Maddison; University of Groningen; Resource Revolution: Meeting the world’s energy, materials, food, and water needs, McKinsey Global Institute, 2011.

9 840 1,023 27 48 28 10 Country 154 53 65 33 1700 1800 1900 2000 India 12 16 China South Korea 10 Japan Germany United States United Kingdom Year Population at start

• f growth period

Years to double GDP per capita Million

14

10 15 20 25 30 35 40 45 50

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

BC Capital Investment, billions $

BC Capital Spending Surges

Source: Statistics Canada, Public and Private Investment Intentions. 2013 is planned investment spending 15

$200 billion Inventory of Projects – $83.6 billion under construction

Mines/Mining

• $3.3 billion Rio Tinto Alcan Smelter
• New Afton Mine, near Kamloops
• Mt Milligan Mine, near Prince George
• Red Chris Mine, near Dease Lake
• Roman Mine, near Tumbler Ridge
• Quintette Mine, near Tumbler Ridge
• Bonanza Ledge Mine, near Barkerville

6 more in permitting

Construction / Real-estate

• 5 major downtown office towers
• Retail complexes
• Evergreen line
• Various Hospitals across the province
• Seaspan Non combat Vessel Program

Infrastructure

• Hwy 37 Transmission
• Richardson and Neptune Expansions
• Evergreen Line
• Expansion of Terminal 2
• Expansion of Port of Prince Rupert
• South Perimeter Road
• $7.9 billion Site C
• YVR expansion/upgrading

Energy***

• $750 m Sooke Wind
• $6 billion Spectra
• $5.4 Trans mountain pipeline
• $5.8 billion Kitimat LNG
• $12.3 billion LNG Canada
• $11 billion PNW LNG
• $10 billion BG Group
• Does not include 5 times multiple of upstream

gas

Solutions Through a Common Fact Base

Collaboration & Interdependence

People Skills and Prosperity

First Nations Reconciliation Engagement Market Demand & Opportunity Innovation Common Fact Base

Fossil Fuels Dominate Global Energy Consumption

Source: BP Energy Outlook 2030, shares are for 2011 consumption, shares may not sum to 100 due to rounding

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 1990 1995 2000 2005 2010 2011 2015 2020 2025 2030

Global Energy Consumption by Fuel, millions tonnes oil equivalent

Natural Gas, 24% Coal, 30% Nuclear, 5% Hydro, 6% Renewables, 2%

18

Liquids, 33%

Growing Energy Consumption in Asia

Source: BP Energy Outlook 2030, shares are for 2011 consumption.

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 1990 1995 2000 2005 2010 2011 2015 2020 2025 2030

Energy Consumption by Region, millions tonnes oil equivalent

S & C America Europe & Eurasia Africa Middle East Asia Pacific

19

North America

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 175 years of natural gas supply we know of » Leader globally in use of renewable power (94% hydro) » Refiner, transporter and shipper of oil for up to 75 years

BC has 36,311 kms of active pipelines in the province 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 Oil and Gas Commission

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 and lower per capita emissions than most provinces/states We have been hydraulic fracturing 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 BC poised to be a leader in that global GHG reductions through LNG supported fuel switching and technology

Environmental Protection, Pride and Export of Canadian Regulatory, Process Expertise and Values

BC and Canada have a reputation for sustainable development and movement of energy and natural resources Among the best in the world at project review, regulatory management, operating process for extraction and movement supported by the rule of law

800 Mining HQ In Vancouver– 4,300 Canadian projects globally – Exporting BC and Canadian sustainability practices and expertise

Opportunity to more vigorously promote Canada’s sustainable development practices, regulatory oversight and values

Our Environmental Stewardship and Competition

Iran , Russia, Qatar, Turkmenistan

» 50 percent of proven gas reserves » Environmental, Regulatory and political stability vs Canada?

While environmental protection is not a priority in Russian society, this may change as the country becomes more acutely affected by instability stemming from environmental

• degradation. Recent reactions to the public management of

floods and wildfires, and historical precedents in a range of countries, indicate that environmental decline may fundamentally affect social cohesion. World Economic Forum January 2013

Canadian and BC Natural Resource Innovation

Collaboration & Interdependence

People Skills and Prosperity

First Nations Reconciliation Engagement Market Demand & Opportunity Innovation Common Fact Base

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

Collaboration & Interdependence

People Skills and Prosperity

First Nations Reconciliation Engagement Market Demand & Opportunity Innovation Common Fact Base

31

Share of Canadian population aged 15-64

By 2021,

• ne in four

Canadian workers will be 55

• r older

Productivity

83 60.2 53.3 46.3 44.6 10 20 30 40 50 60 70 80 90

GDP per person hour of work in $US 2012

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 wage ) Head offices drive IP, Innovation, Services, Exports and Higher Wages 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

33

BC Exports by Commodity, billions $ 1 2 3 4 5 6 7 8

Wood Prod Pulp & Paper Metallic Mineral Prod Natural Gas Coal

• Mach. &

Equip. Agriculture

• ther

2007 2009 2012

Resources Dominate BC’s Exports

Source: BC Stats. 34

First Nations Reconciliation and Engagement

Collaboration & Interdependence

People Skills and Prosperity

First Nations Reconciliation Engagement Market Demand & Opportunity Innovation Common Fact Base

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 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

What to Do to Reconcile and Advance Parternship 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 » Clarity of and access to current information » 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?

Collaboration & Interdependence

Culture of How not Why

First Nations Reconciliation Engagement Market Demand & Opportunity Innovation 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

40

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Other resources Forests Other energy and minerals Columbia River Treaty Crown land tenures Natural gas royalties

Resources Generate Between $3 and $4 Billion of Direct Revenues for the Crown

Source: BC 2013 Financial and Economic Review.

BC Resource Revenues, millions $

41

Of interest: North Van School District 2013 Budget = $153.6 million $2.52 m DEFICIT

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

Electricity

• Alterra Power Corp
• BC Hydro
• Brookfield Asset Mgmt
• Innergex Renewable

Energy

• Valard Construction
• Veresen

Engineering

• AMEC Inc.
• Ausenco Sandwell
• SNC-Lavalin
• Stantec Consulting
• Ainsworth Engineered

Finance

• Advantage BC
• Agricultural Bank of China
• BMO Financial Group
• Canaccord Financial
• CIBC
• HSBC Bank Canada
• Leith Wheeler Investment
• Macquarie Capital
• Marsh Canada Ltd.
• Odlum Brown
• Raymond Jaymes
• Royal Bank and RBC Capital

Markets

• Scotiabank
• TD Bank

Forestry

• Council of Forest Industries
• Int’l Forest Products
• Mercer International Inc
• TimberWest Forest Corp
• West Fraser \timber CO.

Mining

• Cardero Coal Ltd.
• Curis Resources Ltd.
• Imperial Metals
• Nyrstar Canada
• Rio Tinto
• Taseko Mines
• Teck Resources
• Walter Energy

Industry Associations

• AME BC
• BCTIA
• Clean Energy BC
• Coast Forest Products Ass.
• MABC
• Canadian Manufacturers &

Exporters Oil & Gas

• Fortis BC
• Pacific Northern Gas Ltd.
• Spectra energy
• Shell
• Enbridge

Other

• Corix
• Mitsubishi Canada Ltd.
• TELUS Corporation
• Finning

Transportation

• Arrow Transportation
• CN Railway
• Global Container Terminals
• MMM Group Ltd.
• Port Metro Vancouver

Professional Services

• Accenture Inc
• Alexander Holburn
• Blakes
• BLG
• BHT
• Deloitte
• Ernst & Young
• Farris

Professional Services

• FaskenMartineau
• Fraser Milner
• Hennan Blaikie
• Hemmera
• H+K Strategies
• Korn/Ferry
• KPMG
• Lawson Ludell

Professional Services

• McCarthy Tetrault
• McMillan
• MNP
• National
• Odgers Berndtson
• PwC
• Stikeman Elliot

35 Stories of BC’s Natural Resource Industries

Zena Mining Corp

$11.5B Revenue (2011) $8B+ in Canadian Assets $308m P3 in

• Ft. St. John

Nevada, Mexico, Peru Mineral Exploration Insurance & Risk Advisors –Mining/Energy/Forest Gold exploration in BC and Yukon) BIV Top 3 Fastest Growing Company 2012 (Int’l Mining) Vancouver’s largest law firm, energy, enviro Developing $90+m mine in NE BC International trade finance $670m Revenue (2011) $1.5B capital inv. in Mt. Milligan Global energy shipping, 220+ employees in Vancouver $3B in assets Provides tech solutions to energy, oil/gas Practice areas include transp., enviro., aborig.

The World Needs More BC