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B.C. government lets $10-billion Site C hydro project go ahead, with regrets

Premier John Horgan says it is with a “heavy heart” that cabinet decided to move forward with the $10-billion Site C project, which he said is past the point of no return.
john horgan
During the Site C announcement Monday, Dec. 11, Premier John Horgan said the $4 billion cost of cancelling the project — including $2.1 billion already spent and $1.8 billion in remediation costs — would mean taking money away from the NDP commitments to build new schools, hospitals, transit and other projects.

Premier John Horgan says it is with a “heavy heart” that cabinet decided to move forward with the $10-billion Site C project, which he said is past the point of no return.

The decision is the NDP’s most controversial and consequential since taking power.

“We have listened, we have deliberated and we have debated and, at the end of the day, we’ve come to the conclusion that although Site C is not the project we would have favoured and it’s not the project we would have started, it must be completed to meet the objectives our government has set through mandate letters to ministers and commitments to the people of B.C. during the election campaign,” Horgan said.

Horgan said the $4 billion cost of cancelling the project — including $2.1 billion already spent and $1.8 billion in remediation costs — would mean taking money away from the NDP commitments to build new schools, hospitals, transit and other projects.

He stood next to Energy Minister Michelle Mungall, who appeared to hold back tears through the announcement, and Environment Minister George Heyman. Horgan took his own emotional pause when explaining that the decision had divided his own home — his brother disagreed with it, as did his wife Ellie.

“I can’t think, in the 30 years I’ve been involved in public policy, of a choice that was more difficult than this one. But it’s absolutely in the interests of British Columbians to take advantage of an opportunity to go forward and make better a bad situation,” Horgan said.

After nine hours of deliberation, cabinet’s decision came down to a math equation: Comparing how much money has been spent, how much remains to be spent and balance those figures with the alternative of getting energy elsewhere.

Although the projected cost has risen to $10.7 billion from $8.8 billion, the province says it makes the most financial sense to continue moving forward.

Cancelling the project would mean a 10-year rate increase of 12 per cent in 2020, or an extra $198 per year for an average single-family home on Vancouver Island. Continuing would mean a 1.1 per cent increase in 2025 and 2026 under a rate-smoothing scenario over 10 years, government officials said.

Cancelling it could also mean creating the province’s largest deficit, destroying the province’s credit rating and wiping out 80 per cent of B.C. Hydro’s equity, they said.

Horgan said the government is creating a Site C “turnaround plan” to contain project costs and add benefits. It includes a board to oversee things like future procurement, management and environmental integrity; a community benefits program with more apprenticeships for First Nations; and a food security fund from Site C revenues to promote agriculture.

Site C is the largest construction project in B.C. history. It would flood about 5,500 hectares of land along the Peace River in northeast B.C., creating an 83-kilometre-long reservoir and providing enough power to light up to 450,000 homes a year.

The hydroelectric dam, which was a signature job-creation project of former Premier Christy Clark, has been under review since the NDP took power.

While proponents say it will provide necessary power to meet future demand, critics have questioned its value in the face of cost overruns and delays, geotechnical challenges, First Nations claims and environmental damage.

In a Nov. 1 report to the government, the B.C. Utilities Commission said the dam is on track to meet neither its $8.3-billion budget nor the 2024 completion date.

It pegged the likely cost at more than $10 billion — but at the same time, did not give a recommendation to either cancel or continue the project.

B.C. Hydro has disputed some of the report’s conclusions, saying it underestimated the dam’s benefits by $800 million. Others have highlighted the report’s findings that alternative energies, such as wind and geothermal, could provide equally priced or cheaper power.

Politically, Site C has been a quagmire for the New Democrats. The party’s traditional supporters are divided: While many argue for investment in alternative energies instead, construction trade unions have highlighted the employment value of the project.

Ken Boon, president of the Peace Valley Landowner Association, said he was “very disappointed” by the decision.

“We've had a lot of setbacks along the way and I would say this is the worst one,” he said. “But, having said that, we've always somehow bounced back, so I don't know what's going to happen moving forward.

“On a personal level, we're very tired. This is going to have to soak in and I'm not going to make any predictions of what we're doing or not doing.”

But he predicted that people will continue to fight the decision and that the NDP will feel its effects for a long time to come.

“I'm amazed at how many phone calls and emails I have received from NDP party members in the last few weeks stating that if John Horgan moves forward with this project they're done with the party.”

After the announcement, the West Moberly and Prophet River First Nations said they will seek a court injunction to halt construction and start a civil action for treaty infringement.

In January, a federal court dismissed their legal challenge — but the nations believe the BCUC’s report strengthens their case.

Chief Roland Willson of West Moberly First Nations called it a “short-sighted” decision by the NDP government that will stand as their legacy.

“If they cancelled it, by the time the next election came around, I bet you nobody would even remember,” he said.

 “They had everything in front of them to make the proper decision and they failed,” he said.

Mike Bernier, Liberal MLA for Peace River South, said moving forward was the right decision and the review created unnecessary uncertainty.

“Locally, for the businesses, the families, the local First Nations in the area: This is the right decision,” Bernier said.

“We have had over 2,000 families who have been left with uncertainty for the last few months that can now move on with their lives, we have companies that can now move on and ensure they’re employing people to finish this project, we have a region that is no longer left with that uncertainty,” Bernier said.

In a statement, B.C. Green Party Leader Andrew Weaver said the government’s argument that cancelling Site C is too risky due to debt is “incredibly cynical.”

“This is a question of priorities. They had no problem adding billions onto the public debt to cancel the tolls on the Port Mann and Golden Ears bridges, transferring those costs to people outside of the Lower Mainland to pick up votes in a couple of swing ridings,” Weaver said.

In a tweet Sunday night, he said there should be a recall campaign in Nelson-Creston against Mungall, pointing to a 2016 video of her participating in a protest against the dam.

Amnesty International condemned the decision, saying it will have a devastating impact on Indigenous peoples in the Peace River Valley.

“Today’s decision is appalling and indefensible. We are truly shocked at the callous disregard for the rights and well-being of Indigenous peoples, despite the Premier’s acknowledgement of what is at stake,” Alex Neve, secretary general of Amnesty International Canada, in a statement.

The Canadian Taxpayers Federation greeted the news with “cautious optimism.”

“Taking a four billion-dollar bath with nothing to show for it would have been fiscally irresponsible,” Kris Sims, B.C. Director of the CTF, said in a statement.

asmart@timescolonist.com

lkines@timescolonist.com

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