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Gaby Poirier, general manager of B.C. operations, at the Rio Tinto Alcan Kitimat site with stacks of aluminum ingots. (John Lehmann/The Globe and Mail)
Gaby Poirier, general manager of B.C. operations, at the Rio Tinto Alcan Kitimat site with stacks of aluminum ingots. (John Lehmann/The Globe and Mail)

Kitimat’s modern-day LNG gold rush Add to ...

The Silja Festival once sailed the Baltic Sea, carrying passengers who left the working world behind when they stepped aboard.

Today, the 171-metre former cruise ship is anchored in the deep-water port of Kitimat, where it is being retrofitted as accommodation for up to 450 workers whose closets will contain safety boots and hard hats rather than evening wear.

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The ship, which pulled into harbour last month, is the clearest sign of a boom in the city, which has a history that is inextricably linked to industrial development and now sits at the heart of a modern-day gold rush, this one to send B.C.’s natural gas in liquefied form to energy-hungry customers in Asia.

Onshore, the signs are just as clear. The town’s two main hotels are booked to capacity, with some renovated units going for $275 a night.

Three of the town’s four doctors have stopped accepting new patients, housing prices have jumped by more than 50 per cent in the past year, and the vacancy rate is close to zero.

At the animal shelter, meeting rooms and even a washroom have been commandeered as shelter for dozens of cats and kittens that have arrived this spring, some dropped off by tearful owners who had to move after their rent increased.

And that is with just one major development under way – Rio Tinto Alcan’s $3.3-billion (U.S.) Kitimat Modernization Project. The real boom has not even begun.

“We have had workers dispatched to that [KMP] job that don’t have a place to stay,” said Tom Sigurdson, executive director of the B.C. Building Trades.

“We filled the labour commitment, but they need a place to sleep.”

It is not the first time employers have had to scramble to house workers here; 60 years ago, people brought in to help build the original Alcan smelter stayed on a ship called the Delta King. (In a nod to that history, the Silja Festival will be dubbed the Delta Spirit Lodge for its time at Kitimat.)

But the ship is a daily floating reminder of challenges that have implications far beyond the city, which in 2007 posted the greatest population decline in the country.

That trend has now reversed. The province has pencilled in five LNG plants it believes will require 75,000 workers at the peak of construction, which could come within two years.

An estimated $165-billion worth of projects – pipelines, mines and LNG plants – are forecast to be under way by 2023, most in the north.

Investment decisions by the likes of British Gas, Petronas and Chevron – just a few of the companies with LNG proposals on the books – depend on the provincial tax regime, lining up customers and regulatory approvals.

They also depend on engineers, electricians, welders and a host of other workers.

The scramble to make sure those people are available, housed and fed, in the midst of grappling with issues such as First Nations economic goals, temporary foreign workers, and aging, inadequate infrastructure, makes Kitimat a bellwether for development in Canada and abroad.

If B.C.’s LNG-related labour policies are poorly designed or put in place too late, the province could end up like Australia, where fierce competition for workers drove up wages, but also resulted in a huge share of the jobs going to foreigners.

Liberal Premier Christy Clark has promised an overhaul of the provincial skills training system to ensure the maximum number of British Columbians will be in line for LNG and other industrial jobs in the northwest.

She has also promised a B.C.-first policy to ensure that people in the province who want to work, can.

The second tier will be from the rest of Canada. To that end, B.C. officials are talking to the Atlantic and Western provinces to harmonize apprenticeship requirements to help smooth the flow of employees.

The province is also negotiating with Ottawa to ensure immigration rules will not block workers from outside Canada.

To bolster the ranks of skilled labour, B.C.’s LNG employment plan calls for 25 per cent of trades jobs on the projects to be filled by apprentices.

The plan also recommends the province consider an apprentice quota for public infrastructure projects, a step designed to produce new qualified journeymen by the time LNG projects are ready to break ground.

Such measures are essential if B.C. and Canada are to benefit fully from LNG projects, said business owner and District of Kitimat Councillor Phil Germuth.

He would like the province to offer more financial incentives, both to employers to hire apprentices and to students who sign up for apprenticeship programs.

“They need to put more incentives in,” Mr. Germuth said, adding that he got government support when he was a young apprentice.

“I think a lot of the incentives and benefits have been taken away, for the employer and the worker too.”

While the much-touted LNG projects have yet to materialize, Rio Tinto Alcan’s smelter upgrade is providing a case study in what to expect.

The project formally kicked off in 2011 after more than a decade of discussions and will nearly double the capacity of the existing 60-year-old smelter.

Currently, about 1,000 Kitimat Modernization Project employees live in Kitimat or elsewhere in the region.

About 1,700 construction workers live in a trailer camp near the smelter site.

Later this month, as the construction labour force peaks, as many as 450 workers will begin moving onto the cruise ship.

The vessel is a necessary stop-gap measure, said Gaby Poirier, general manager of B.C. operations for Rio Tinto Alcan.

Brought in on a nine-month contract, with an option to extend for another three if required, the ship will allow Rio Tinto Alcan to provide the standard of housing that workers desire without putting more pressure on home prices or scarce rental accommodation.

“We took the responsible decision – to make sure we don’t put [stress] on the city. That’s why we did it,” Mr. Poirier said.

Once the upgraded smelter is complete – scheduled for 2015 – it will employ about 1,000 workers, most of whom already live in Kitimat or nearby, so the housing crunch is expected to be short-term.

But other projects, with head counts of 1,500 and higher, could be around the corner.

Mr. Poirier, who worked at Alcan operations in Quebec before moving to Kitimat last year, said he is not too worried about losing KMP “operations” workers to competitors if the LNG boom materializes.

About 70 per cent of KMP employees are shareholders, enhancing employee stability, and Alcan ties run deep in the community.

Some people’s work history with the company goes back four generations.

Mr. Poirier said his biggest priority is safety – unsurprising at a workplace that has its own railway, and where a passing “cruce,” or crucible, filled with four tonnes of molten aluminum heated to more than 900 degrees, demands and gets the right of way.

But he is also attuned to hiring and retention, as shown by a March visit to the engineering faculty at the University of Victoria.

Mr. Poirier welcomed the chance to pitch training and employment opportunities in the north and, at the urging of B.C. Advanced Education Minister Amrit Virk, used his own experience as an example.

Married, with a young family, Mr. Poirier said he was drawn to Kitimat by the opportunity to oversee a world-class smelter but also by the recreational opportunities, civic infrastructure and spectacular landscape.

He plans to return for another visit to UVic in the fall with Mr. Virk.

Long-time physician Howard Mills would like to ensure that people have access to a doctor and health services if and when they arrive.

Dr. Mills, who moved to Kitimat in 1981, is the longest-serving general practitioner in the district, and also, with his wife, runs Minette Bay Lodge, a seven-room fishing camp.

Kitimat’s 22-bed hospital is at capacity, and health services in Terrace are also under pressure, Dr. Mills said in a recent e-mail.

The region needs more nurses, midwives, occupational therapists and other health-care staff.

Three of four general practitioners in Kitimat have stopped seeing new patients, Dr. Mills said, and the only reason he sees new ones is that he worries if he does not, they will wind up at the emergency room, which is already overloaded.

He is working with investors on a proposal to build a new medical clinic that would cater largely to the expected influx of industrial workers.

The proposed facility would provide walk-in service for patients who do not have a local doctor and would involve International SOS, a medical services company that already provides service to the KMP project in Kitimat, Dr. Mills said.

“Discussions are ongoing with RTA, Chevron, Shell and others, and with our ability to look after their needs, and with their support, the clinic should be open to patients by mid 2015,” he said.

The Haisla Nation is also making plans.

Based in Kitamaat Village at the head of the Douglas Channel, the 1,700-member Haisla Nation is part of the Douglas Channel Energy Partnership, an LNG proposal, and has business ventures in transportation, accommodation and other services.

Since the smelter upgrade began, Rio Tinto Alcan has poured about $200-million into Haisla-owned businesses or joint ventures, including Bridgemans Services, which brought the Silja Festival to town.

The unemployment rate among the Haisla, once hovering at 50 per cent or higher, is now virtually nil, Haisla Councillor Ellis Ross said.

High on council’s priorities is more on-reserve housing, a long-standing issue that has become more pressing as young people return to the community to take jobs that did not exist a decade ago.

“We’ve always had a housing problem, and now that we have some resources at our disposal, we’re actually starting to look at how do we resolve that issue on our own terms instead of relying totally on government money,” Mr. Ross said.

Some of those resources came through a deal with the province that allowed the Haisla to acquire a parcel of Crown land to use for an LNG facility.

Other First Nations have recently signed LNG revenue-sharing agreements, part of a provincial approach designed to spur aboriginal economies.

The Haisla also have a stake in the Kitimat Valley Institute, a private agency that provides industry-required training in, for example, site security and orientation.

By offering such training close to home, the facility increases employment opportunities for local residents, especially First Nations people who might otherwise not have the required skills to land a job.

Beginning last month, the institute has been pumping 210 people a week through site orientation programs required for the smelter upgrade project – work that has required taking over space at a nearby golf club to accommodate the crews.

The institute has gone from two to nine full-time instructors and does not see business slacking off any time soon, business and development manager Jodie Cook said.

“Just like everyone else is ramping up – we are trying to do the same.”

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