B.C. government urges Kitimat to build community after court loss to Alcan

VICTORIA (CP) - B.C.'s economic development minister says the northwest　B.C. community of Kitimat needs to focus its energies on　building a prosperous future after losing a bitter court battle with Alcan, the　company town's largest employer.

Kitimat should consider the B.C. Supreme Court loss as an opportunity to unite behind a proposed $2-billion Alcan smelter upgrade project, even if it means a loss of 500 full-time jobs, Colin Hansen said Thursday.

The B.C. Supreme Court ruled that aluminum giant Alcan faces no restrictions on what it does with the electricity it generates at its power stations.

Back in the 1950s, Alcan gained rights to water in the Nechako River system, allowing it to build the massive Kemano hydroelectric facility to power an aluminum smelter that essentially founded the community of Kitimat.

Kitimat argued unsuccessfully that the B.C. Industrial Development Act and the original 1950 power sales agreement between Alcan and the B.C. government allowed the company to only use its power to run the smelter or create jobs in the Kitimat area.

Kitimat argued Alcan stands to make huge profits selling power generated by a public water resource and ultimately will cut smelter jobs in favour of power sales.

"Alcan is very much committed to the generation of aluminum," said Hansen. "Alcan has shown a commitment to British Columbia over the last 50-some-odd years, and in the discussions that I've had with senior Alcan executives, they certainly indicated to me that they want to continue to be a good corporate citizen in British Columbia."

Alcan proposed a $2-billion plan last summer to upgrade its aluminum smelter in Kitimat. But the plan included a power sales plan which meant selling power to B.C. Hydro, and a loss of about 500 jobs.

The Kitimat smelter currently employs more than 1,500 people. It used to employ more than 2,500.

Alcan's smelter upgrade proposal was put on hold after the power sales option was rejected as too expensive by the regulatory B.C. Utilities Commission.

The utilities commission decision is under appeal.

Alcan spokesman Michel Jacques said the court decision is a step in ensuring the sustainability of its operations in British Columbia.

The company still needs final approval for the upgrade project, he said.

Hansen said he believes the smelter project will proceed now that Alcan has the right to manage the power it produces.

"Now that the courts have decided what that interpretation should be it actually allows (Kitimat and Alcan) to sit down and move forward," Hansen said. "Everybody wants what's best for the residents of Kitimat."

The most recent census results revealed that Kitimat registered the largest population decline of any community in Canada from 2001 to 2006.

Kitimat's population dropped more than 12 per cent to about 8,900 people. During the early 1980s, Kitimat had about 14,000 residents.

The District of Kitimat issued a statement saying it was disappointed with the court ruling and is weighing its options.

"We have been fighting to protect our community and one of the largest water resources in British Columbia for a number of years now, standing in where the provincial government should have been," said a statement attributed to Kitimat Mayor Richard Wozney and his council members.

"We are trying to make sure the benefits of our public resources go to British Columbians. If the provincial government had stood up for the use of this raw material in a value-added and profitable industry, the outcome surely would have been different. Why are they giving away our resources to multinationals?"

Kitimat district manager Trafford Hall said the community has yet to decide if it will appeal the ruling.

The Opposition New Democrats said the ruling is a sad day for Kitimat residents.

The potential loss of 500 jobs "i