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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.

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.

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