Construction of the troubled Site C hydro project on B.C.’s Peace River will continue with a new price tag of $16 billion, making it the most expensive dam in Canadian history.
“Today I am confirming that the Site C Dam Clean Energy Project will be completed,” B.C. Premier John Horgan announced on Friday. “I believe today we’ve made the right decision,” he said, adding that construction of the dam along B.C.’s Peace River will face a one-year delay in completion and that two independent experts have confirmed it is safe to proceed despite the dam’s weak foundation.
The $16 billion cost for Site C exceeds the $13.1 billion bill for the Muskrat Falls dam, a project that was described as “the biggest economic mistake in Newfoundland and Labrador’s history.”
Horgan said outside experts tapped to review a proposed fix to geotechnical problems “confirmed that the project can proceed safely and will be built to the highest dam standards.”
The premier said cancelling Site C would require laying off 4,500 workers and emphasized the project’s geotechnical troubles, related to the unstable shale to which it will be anchored, were discovered after the NDP government decided to go ahead with the dam. BC Hydro’s own engineers flagged potential geotechnical concerns many years ago and BC Hydro’s board of directors rejected the project in the 1990s in large part due to geotechnical concerns, but the magnitude of the problems became apparent only as construction progressed.
The government said cancelling the project would have led to an annual increase in hydro rates for the average residential customer of $216 a year — $18 a month — over 10 years. If the province had stepped in with a bailout of BC Hydro, the debt associated with termination and remediation of the site would fall on taxpayers and reduce the resources the province needs for investments in infrastructure and services to re-build from the COVID-19 pandemic, the government said.
The decision to proceed comes a month after the premier revealed a surprise “fix” proposed by BC Hydro to address mounting geotechnical problems with the dam. During that Jan. 14 press conference, Horgan said he had commissioned two outside experts to review the BC Hydro proposal after acknowledging the government’s own appointed expert, Peter Milburn, “did not have the capacity to address the safety challenges that could emerge.”
Milburn, a former deputy minister of finance and secretary to the Treasury Board, was named as a special advisor on the project last July, when BC Hydro disclosed that Site C faced unknown cost overruns, delays and major geotechnical problems.
Documents later obtained by The Narwhal revealed that top B.C. civil servants knew of problems with the dam’s “weak foundation” as early as May 2019, but the public was left in the dark for more than a year.
A summary of Milburn’s report, released publicly on Friday, notes the geotechnical problems at Site C will continue and notes BC Hydro has struggled to track risks associated with the project’s construction and communicate those risks to government.
In response to questions about the details revealed in the Milburn report, the premier noted “this has certainly been a challenging project” and indicated the project has been troubled by “engineering bias” and the belief that any problem can be fixed.
The decision to proceed with Site C dam construction comes despite mounting calls for cancellation from experts who say cost overruns make the project uneconomical. Photo: Jayce Hawkins / The Narwhal
Former BC Hydro CEO Marc Eliesen said the government is “playing Russian roulette” given the scope and severity of geotechnical problems with the project, which has nearly doubled in cost since it was approved in late 2014 — overruns Eliesen and other independent energy experts predicted.
“A rational person would have said ‘enough is enough, let’s stop now,’” Eliesen told The Narwhal.
“Make no mistake. Premier [John] Horgan will be haunted by his reckless and irresponsible decision. No amount of wishful thinking will make this project safe, and costs will further escalate.”
Echoing Harry Swain, chair of the joint review panel that examined the Site C dam for the federal and provincial governments, Eliesen said the long-time secrecy surrounding the project is disturbing.
The government blamed 50 per cent of the most recent price hike on geotechnical issues and the COVID-19 pandemic, saying it could not provide a further breakdown for the public. In a technical briefing for reporters, the government also said it could not provide information about the other 50 per cent because it would create commercial risk for BC Hydro.
Six billion has been spent so far on the project, which Energy Minister Bruce Ralston said is more than 50 per cent completed, almost six years into what is now projected to be 10 years of construction.
BC Green Party leader Sonia Furstenau said the government has decided to “throw good money after bad” in approving nearly $6 billion in new money for the Site C project.
“British Columbians should brace themselves, as this isn’t the last time they are going to hear about costs going up at Site C,” Furstenau, MLA for Cowichan Valley, said in a statement. “The issues facing Site C are significant and aren’t going away. There will be ongoing geotechnical problems impacting public safety, which will further escalate the costs.”
“It’s important to remember that the cost of this decision goes well beyond $16 billion — the cost includes violating treaty rights in an era of reconciliation, the loss of the incredible biodiversity and the rich farmland in the region. These are significant costs that cannot easily be quantified.”
The Site C dam will flood 128 kilometres of the Peace River and its tributaries — about the equivalent distance of driving from Vancouver to Whistler or from Victoria to Nanaimo — in the heart of Treaty 8 territory.
According to BC Hydro documents, Site C will destroy 42 sites of cultural and spiritual significance to First Nations, including burial grounds, medicine collection areas, offering places for ceremonies and prayers, and locations associated with oral histories. More than two dozen sites with First Nations transportation values, including portions of trails, horse crossings, boat and raft crossings, and canoe and boat routes along the Peace and its tributaries will also be erased.
A joint review panel that examined the project for the federal and provincial governments found the dam’s impacts on hunting, fishing, non-tenured trapping, and other traditional land uses would likely be adverse, significant and impossible to mitigate.
West Moberly First Nations Chief Roland Willson, whose nation has a pending Treaty Rights case against the Site C dam, said Horgan’s decision has “grave consequences” for West Moberly and other First Nations.
“We are not at all convinced that this project is safe. [Horgan’s] government had a constitutional duty to consult us. That’s the law. It’s been the law for over 20 years. Yet the Premier hasn’t so much as acknowledged our existence on this issue. Is this what he thinks of Indigenous Peoples? Is this what he means by free, prior and informed consent?” Chief Roland Willson said in a statement.
Willson, who calls the Site C dam “cultural genocide,” said his First Nations, downstream communities and the general public were not consulted by Milburn or the government during the recent deliberations about whether or not to continue the project.
The Union of BC Indian Chiefs said it is “deeply troubled and angered” by the government’s decision to proceed with the Site C dam.
“The Site C dam has never had the free, prior and informed consent of all impacted First Nations, and proceeding with the project is a clear infringement of the treaty rights of the West Moberly First Nation,” Kukpi7 Judy Wilson, UBCIC Secretary-Treasurer, said in a news release.
She noted that the United Nations Committee on the Elimination of Racial Discrimination – one of the world’s leading anti-racism bodies — has called on Canada to suspend the Site C project until it has the free, prior and informed consent of Indigenous Peoples.
“B.C. did not even attempt to engage First Nations about the safety risks associated with the stability of the dam in the recent reviews,” Kukpi7 Wilson said. “It is unfathomable that such clear human rights violations are somehow okay by this government.”
Minster Ralston said on Friday that B.C. needs more renewable energy “to electrify our economy, transition away from fossil fuels and meet our climate targets,” and that the Site C dam will help to achieve these things while employing 4,500 people in good-paying jobs.
A fast-tracked B.C. Utilities Commission review in the fall of 2017 — commissioned by the new minority NDP government — found that BC Hydro has a pattern of over-estimating energy demand.
The review also found that BC Hydro’s mid load forecast, which included the impact of electrification, was “excessively optimistic. ” Even with electrification, “there are risks that could result in demand being less than the low case,” the review concluded.
The BCUC also found that power the Site C dam would produce could be generated by a suite of renewables, including wind, for $8.8 billion or less.
As construction of the Site C dam got underway, BC Hydro slashed its energy conservation budget. Former BC Hydro CEO Jessica McDonald said publicly that conservation programs had saved as much energy as the Site C dam would produce.
Horgan told reporters on Friday that the Site C dam will provide “green energy” for generations to come.
But University of Winnipeg professor Stéphane McLachlan said large hydro dams, which flood environmentally sensitive areas, destroy habitat for species at risk and poison fish with methylmercury, are “anything but sustainable.”
“Emissions from reservoirs associated with hydro power are not as climate friendly as hydro companies would have us believe,” said McLachlan, who teaches in the department of environment and geography and is the primary investigator for Wa Ni Ska Tan, an alliance of hydro-impacted communities in Canada.
McLachlan said it is disingenuous to call power from large hydro dams clean just because they produce fewer greenhouse gas emissions than coal power.
A group of researchers led by the UBC program on water governance found the Site C dam will have more serious adverse environmental effects than any project ever examined in the history of Canada’s environmental assessment act — including a proposal by Enbridge Inc. to build a pipeline from Alberta’s oil sands to Kitimat and transport bitumen in tankers through the Great Bear Rainforest archipelago, which was rejected on the grounds that it would be too environmentally damaging.
Among other impacts, the Site C dam will destroy habitat for more than 100 species at risk of extinction, including mammals, plants, insects like butterflies, fish and birds. Up to 30,000 songbirds and woodpeckers nest in the future flood zone, according to Environment Canada, and the rare low-elevation northern valley is a continental flyway for migrating birds who depend on its safe haven during extreme weather events in the spring and fall.
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