talkof thetownDavid Broadland10 Katherine Gordon14Jobs, jobs, jobs and other exaggerationsDAVID BROADLANDWhat do Christy’s LNG industry, the CRD’s sewage treatment plan and Victoria’s Johnson Street Bridge project all have in common?Key elements of the BC Liberals’ blitzkrieglikebombing of the NDP in the recentelection campaign began coming togetherlast February. This included delivery of a reportproduced for the Ministry of Energy, Minesand Natural Gas by the accounting and businessadvisory firm Grant Thornton LLP thatseemed to provide respectable, independentverification that the province was on the vergeof an explosion in jobs related to productionand export of liquified natural gas. The reportpredicted the creation of 114,600 jobs in BC,instantly providing Christy Clark with hercampaign mantra of “100,000 jobs for BCfamilies.” But a simple analysis of the methodologyused by the Grant Thornton reportsuggests that it produced a 15-fold overestimationof the number of jobs an LNG industrywould likely create, planting Clark’s job claimssquarely in the Exaggerated Job-Claim Hallof Fame, alongside the Capital RegionalDistrict’s sewage treatment plan (10,000 jobs)and the City of Victoria’s Johnson StreetBridge project (900 jobs).Unending prosperityInstead of listening to his campaign manager,Adrian Dix might have done better if hehad consulted Wikipedia under “ElectionPromises.” According to the planet’s deepestpool of collective wisdom, “There are strongpressures on politicians to make promiseswhich they cannot keep. A party that doesnot make exaggerated promises might appearbland, unambitious, and uninteresting tovoters compared to the one that does. Sometimesthis can give the exaggerating party an advantageover the truthful one.”Dix opted to be truthful and promised todeliver budget deficits for the forseeable future.Christy Clark promised jobs, jobs, jobs—andunending prosperity. Whom did you thinkwould get the most love?During her campaign, Clark visited a SpectraEnergy (Spectra have donated $125,000 to theBC Liberals since 2007) facility in Fort Nelsonand excited reporters with news that our prosperousfuture was starting that very day: “Todaywe are at the heart of one of the greatest jobopportunities that BC has ever had,” sheChristy Clark with Spectra Energy employeesenthused, charismatically. “Liquefying naturalgas means creating 100,000 jobs for BC families.Both here in Fort Nelson and in theprofessional services industry in the LowerMainland.” Fort Nelson, the Lower Mainlandand much of the rest of BC gave Clark the love.Spectra had announced last fall a proposalto build an 850-kilometre pipeline acrossnorthern BC to a potential LNG terminal inPrince Rupert. They are partnering with BGGroup, who announced—just four days beforethe election—plans to build an LNG plant thatwould consume as much natural gas as BCcurrently produces. Spectra’s project joinedfour others that were proposing to do prettymuch the same thing, albeit on a smaller scale:build a natural gas pipeline from northeasternBC that would connect with plants at PrinceRupert and Kitimat, where gas would then bescrubbed, chilled, liquefied and finally pumpedonto ships bound for China, Korea, Japan andother Asian countries.Each of these five LNG-related proposalsoffered aspirational figures on productionvolumes and the number of jobs that constructionand ongoing operations might create. ButClark’s “100,000 jobs” didn’t come from theirestimates. The Ministry of Energy, Mines andNatural Gas hired two consulting firms, theDeetken Group and Grant Thornton, tocontribute to the development of this number.<strong>Focus</strong> asked the ministry to show us the methodologyused to derive Clark’s 100,000-jobsfigure. They provided a 23-page documententitled “Employment Impact Review,” producedby Grant Thornton. That review’s executivesummary notes: “Construction of the fiveprojects is estimated to generate, on average,39,400 full-time equivalent jobs annually forthe nine-year construction period. Once allfive projects are fully operational in 2021, thenumber of full-time equivalent jobs requiredto operate the projects annually is estimatedto be 75,200 over the life of the projects.”According to the report, the Ministry ofEnergy, Mines and Natural Gas instructedGrant Thornton to start with the assumptionthat there would be a total of 2400 full-timeequivalent jobs to operate the five plants andthe pipelines that would feed them. Was thata solid assumption? It doesn’t fit well with whatthe actual LNG proposals have been suggestingpublicly, but let’s come back to that point later.After assuming there would be 2400 fulltimepermanent operational jobs, Grant Thorntonthen used an econometric model (BC Input-Output Model) provided by the province toestimate “indirect” and “induced” full-timejobs. The model produced 30 indirect andinduced jobs for each assumed direct job. Isthis reasonable? The Natural Gas Caucus, abi-partisan group of US members of the Houseof Representatives “dedicated to championingthe use of clean, plentiful domestic naturalgas,” estimates 3.5 indirect and induced jobsfor every direct job created in the US gas industry.In the US, 2400 direct jobs in the gas industrywould create 8500 indirect and induced jobs,for a total impact of 10,900 jobs—not 75,200.That’s the first part of the arithmetical exaggerationlying behind Clark’s employmentpromise. When Spectra announced their projectlast year, they said they expected there wouldbe 50 to 60 permanent direct pipeline jobs.That was to operate and maintain a pipelinethat could process 4.2 billion cubic feet ofnatural gas a day, which works out to 14 milliontonnes per year—enough to supply three ofthe roughly four-million-tonnes-per-year plantsthat are common in the LNG industry. Eachof those plants could employ, according toindustry standards, 120 to 140 employees.If all five proposed LNG plants are built asper the actual proposals—and two pipelineslike the one Spectra is proposing are built to10 June 2013 • FOCUS
feed them—940 to 1100 permanent jobs wouldbe created. If that range is then worked throughthe American gas industry’s formula for totaljobs created, we arrive at a bright and shinyfuture of 4000 to 5000 full-time equivalentjobs—not 75,200.The accuracy of the estimate of 39,400 fulltimejobs to build these plants and pipelinesfaces similar challenges. I’ll spare you the details.Suffice to say the report starts with an averageof 11,400 direct full-time jobs and then hammersthat with multipliers. I’ll have more on the artof exaggerating construction jobs later on.The willingness of the Ministry of Energy,Mines and Natural Gas to stray some distancefrom reality is starkly evident in their 2012Natural Gas Strategy: Fuelling BC’s Economyfor the next Decade and Beyond, which states:“BC’s natural gas sector employs tens of thousands...”Statistics Canada, however, put thatnumber at 3500 in 2012. That comparesfavourably with 3300 employed in “heritageinstitutions” (museums), but it’s a tiny dropin a very big bucket when compared with the2,312,500 people working province wide.Sewage treatment AND 10,000 jobsNot long after Victoria MP Denise Savoieresigned her federal seat in 2012 and Victorianswere waiting for Stephen Harper to call a byelection,the CRD began running ads in theTimes Colonist promoting the benefits of theirchosen treatment plan.One of those ads (see below) seemed to saythe CRD was projecting an increase of 10,000jobs during construction, creating a massiveIs foot or ankle pain preventing you from living life fully?Our team has developed an innovativeapproach utilizing the CuteraGenesis Plus Laser to alleviatemusculoskeletal injuries withoutmedications or surgery.Proven Clinical Treatment Plan and Post-Treatment Care provided for Achilles Tendinitis,Ankle Sprains, Neuromas, Plantar Fasciitis, Shin Splints, and Post-Operative Pain/SwellingCovered by most Extended Health PlansDr Bill Mirchoff & Dr Gregg CongdonDoctors of Podiatric Medicine350 - 1641 Hillside Ave • 250-592-0224Learn more at: www.drgreggcongdon.comspike in the local employment rate. Unemploymentin the CRD was then running at about 5.7percent, which meant 11,000 people withoutjobs. The sewage treatment project, it appeared,would be almost like having full employmentthrust on us: imagine the economic benefits!CRD advertisement that ran in the Times Colonist before the federal by-electionImagine Pain FreeThe fine print in the ad, however, revealedthe project would create 10,000 job years,not 10,000 jobs. Still, this was overwhelminglygood news, especially for the 11,000people looking for work and the thousandsof small business owners struggling to survivein the current down economy.As soon as the by-election was called, theads were pulled—at the request of then CRDBoard Chair Geoff Young. Young recently told<strong>Focus</strong>, “The CRD had—and has—a policy ofnot getting involved in public input processesduring elections, and I felt that these ads violatedthat principle.”The jobs ad pictured here also seemed toviolate a basic principle of truthful advertising:It clearly implies there would be an increaseof 10,000 jobs during construction, but at thesame time, in finer print, says there would bean average of 2,000 jobs per year. It saystwo different things. Which is true?As it turns out, probably neither is true. CRDCorporate Communications Manager CarlaWormald supplied <strong>Focus</strong> with the report “CRDEconomic Impact Measure Analysis,” authoredby their consultant Ernst & Young, which justifiedthe “10,000 job years” claim. An examinationof the report revealed that two primary figuresused by Ernst & Young were, um, wrong. Theirwww.focusonline.ca • June 201311