In the basement of Yvonne Tupper’s home, in northeast B.C., sits a banker’s box filled with papers from a Site C dam civil lawsuit that BC Hydro brought against her seven years ago. 

Tupper, a Saulteau First Nations member, still gets upset when she speaks about the ongoing lawsuit that accuses her and five others of conspiracy, intimidation, trespass, creating a public and private nuisance and “intentional interference with economic relations by unlawful means.” 

The lawsuit puts a “target on our backs” and sends the message that “it’s okay to bully us,” Tupper, an environmental monitor and cultural Knowledge Keeper for Saulteau First Nations, told The Narwhal.

The civil lawsuit was filed after Peace Valley farmers and First Nations members set up a winter camp at the Rocky Mountain Fort heritage site on the banks of the Peace River — once home to the first European fort in mainland B.C. and now a Site C dam acid-generating waste rock dump.

The campers demanded work on the Site C project be stopped until court cases against the project were heard and independent reviews could determine whether the project infringed treaty rights and was in the best interests of B.C. ratepayers. 

According to the B.C. Civil Liberties Association, the civil lawsuit bears the hallmarks of a Strategic Lawsuit Against Public Participation, also known as a SLAPP suit. SLAPP suits aim to intimidate and silence critics by burdening them with the financial and emotional cost of legal action. 

The Site C suit — which BC Hydro lawyers suggested in court could seek up to $420 million in damages from Tupper and other defendants — also names Jane and John Doe, meaning anyone can be added at any time.

The peaceful two-month camp was voluntarily dismantled the day after BC Hydro obtained a court injunction to remove people from the area so the old-growth forest around the designated heritage site could be clearcut before migratory birds returned to nest in the spring.

To collect evidence for the civil lawsuit and injunction application, BC Hydro monitored personal Facebook pages, Twitter and Instagram accounts, blogs, other social media and a GoFundMe page Tupper set up to raise money for the camp, which could only be accessed by helicopter or snowmobile. Dozens of people visited the encampment overnight or during the day to show their support, including scientist David Suzuki and Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs. 

Tupper said she has been “psychologically affected” by the lawsuit and believes BC Hydro may still be monitoring her social media accounts. “All those bridges and construction — that they said we held up — were completed years ago,” she said. “So I don’t understand why this lawsuit’s still going on.”

In an email, Greg Alexis, Site C manager of public affairs and community relations, said BC Hydro sent a letter in March 2021 offering to discontinue the legal action “and it was not accepted by the counsel for the defendants.”

“We also sent a follow up letter in May 2021 and BC Hydro has not yet received a response,” Alexis said. “We remain open to discussions to resolve this issue.” He said BC Hydro is not able to discuss the terms of the settlement offer.

Jason Gratl, the lawyer for five people named in the suit, said he could not discuss details about the settlement terms offered in 2021. He described the terms as “less favourable than the status quo” and “unacceptable.”

Lawsuit called ‘embarrassing’ for B.C. government 

According to Ga Grant, litigation staff counsel for the B.C. Civil Liberties Association, the hallmarks of a SLAPP suit usually include a significant differential in power between parties and their access to resources. 

They also include “weak evidence of actual harm to that party that has more power,” Grant said. 

“Just because a case is filed against someone doesn’t mean it actually has merit. In fact, SLAPP suits are regularly used to quash dissent, even though they may be baseless.” 

Grant said such suits can cause “significant devastating harms to the freedom of expression and public debate that is very important to our democracy.” 

Verena Hofmann, one of the people named in the suit, said she was so intimidated and “rattled” by the lawsuit that she feared speaking out against the Site C project and “took a step back.” She stayed very quiet on social media, hoping to “fly under the radar” lest BC Hydro take her back to court. 

At first, Hofmann only wanted to speak to The Narwhal if her name wasn’t used but as she shared her story she changed her mind.

“I’m proud of what I did,” she said. “I used my voice. I stood up. And now I’m afraid to say that my name can be used? No. I don’t want to be afraid that way and I don’t want others to feel that way.” 

Hofmann said she joined the camp because Site C dam construction was “ramrodded” through by BC Hydro and the B.C. government even though there were legal challenges waiting to be heard by the courts — including a landmark treaty rights case that might have stopped construction of the hugely over-budget $16 billion project, the most expensive hydro dam in Canadian history. 

The B.C. government greenlighted the project after it changed the law to remove the independent BC Utilities Commission — which had previously rejected the dam on the grounds that it was too environmentally harmful and the energy wasn’t needed at the time — from oversight. While court cases were still waiting to be heard, and in the absence of an independent review, former B.C. Premier Christy Clark vowed to push dam construction “past the point of no return.” 

Hofmann said she was particularly stressed by BC Hydro’s claim of damages from the campers, which lawyers for the public utility suggested in court could total as much as $420 million. The claim for damages was “outrageously exaggerated,” Hofmann said. “It’s unfathomable and unimaginable that [I] myself could have made those damages.” 

Hofmann recalled a sense of panic as she worried she would lose her home and that other campers, too, would lose their homes, land and possessions. “Nobody had any money to fight this,” she said, adding that she had to ask friends for money to help cover her legal expenses. 

Hofmann spoke about the industrialization of the once-bucolic Peace River Valley for the Site C dam, expressing grief at how the closely knit valley community has been torn apart by the project. Many residents were forced to relocate or their property was expropriated by BC Hydro to make way for the future reservoir, which will flood 128 kilometres of the valley and its tributaries, roughly the same distance as driving from Vancouver to Whistler. 

BC Hydro’s charges were ‘worrisome’ 

Ken Boon, a farmer who was named in the civil suit along with his wife Arlene Boon, said the civil law suit “basically weaponized what BC Hydro really wanted, which was the injunction.”

“There’s no doubt that the actions BC Hydro took were meant to be a deterrent … We know first hand that there were people very concerned about getting involved because of the possible financial implications,” said Boon, whose third-generation farmhouse and farmland was expropriated by BC Hydro in 2016. 

The Boons now live in a cabin on a small slice of their former property, sandwiched between the future reservoir and a section of a provincial highway that was relocated out of the flood zone.

Boon said he and his wife no longer worry about the lawsuit because “it would be virtually impossible and bizarre to the extreme” for BC Hydro to move ahead with it now. 

“At the time, it was a pretty concerning thing,” he said. “They were throwing around some big numbers that seemed pretty bizarre in the scheme of things. How they determined those numbers was never clear to us. Obviously when you’re up against a mega corporation like BC Hydro that has limitless funds at their disposal and you’re just a little guy it’s definitely worrisome. They could crush you like a bug.”

BC Hydro offered to drop the lawsuit in the spring of 2016 if the couple signed an agreement promising not to engage in any actions that would impede construction of the dam, said Boon, who is the president of the Peace Valley Landowners Association, representing landowners who are affected by the Site C project. 

“Seven years have gone by since this civil claim was initiated, and we have not done any action to physically impede the project in that time,” he said. “However, we have continued to protest against the project through peaceful and lawful methods while being respectful of those working on it. Under the circumstances, why would we want to sign any such document?” he said. “BC Hydro did not need our signature to slap this suit on us, so they can — and should — just drop it without our signature. Otherwise, they can leave it open as a reminder of their bully tactics.”

Esther Pedersen, another Peace Valley resident named in the suit, said she has ignored the civil lawsuit, calling it “embarrassing” for the B.C. government. 

Pedersen didn’t stay overnight at the Rocky Mountain Fort camp, which was also a gathering place for Indigenous people. She only visited the camp once for 15 minutes when there was an extra seat in the helicopter that transported Suzuki and Phillip. 

Pedersen allowed access through her rural property to the public land where the helicopter picked up Suzuki and Phillip. She also used a freezer outside her house to collect food for the campers, which was dropped off by community members.

“This is like somebody who’s playing Monopoly who doesn’t like the rules and says, ‘oh, yeah, okay, well, you have to pay a million dollars. Okay? No, two million,’’ ’ she said. “It’s stupid. It’s childish. Can I go to jail forever? Really? For what?”

“Are you telling me that I can be sued for $400 million for feeding 28 people [at] a traditional camp?”

B.C.’s new premier David Eby, the former executive director of the B.C. Civil Liberties Association, championed anti-SLAPP suit legislation when he was the province’s attorney general. In one interview, Eby described SLAPP suits as lawsuits “filed to silence somebody on a matter of public interest.” 

In 2019, the province passed the Protection of Public Participation Act. The Act allows defendants like Hofmann and the Boons to apply to the court to dismiss a lawsuit on the grounds that it impinges on the ability to speak freely on a matter of public interest. If the court agrees, it can decide the defendant’s costs must be covered by the proponent of the lawsuit.

But the Act applies only to lawsuits filed after May, 2018, exempting the Site C civil lawsuit. 

Grant said the purpose of anti-SLAPP legislation like the Protection of Participation Act is to ensure voices can be heard without the threat of expensive legal action.

She said it is very concerning the Act doesn’t cover cases like the Site C civil lawsuit that “essentially are still being used aggressively against people.”

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For seven months, there was silence.

Then, on Feb. 26, the B.C. government released a barrage of information about the Site C dam’s stability issues and dropped a financial bombshell.

The dam, announced in 2010 as a $6.6 billion project, will now cost $16 billion to complete. 

That makes Site C the most expensive dam in Canadian history — and nowhere near the biggest. Not even close.

For that amount of money, British Columbians could pay for four-and-a-half NASA Perseverance rover missions to Mars, in greenbacks.

Premier John Horgan didn’t rule out further cost increases, given that almost five years of construction remain and new geotechnical issues could emerge because the dam is being built on shale (think of compressed mud). 

Lost in the hailstorm of information released on Feb. 26 were some intriguing details in a long-awaited report on the dam from former deputy finance minister Peter Milburn.

Milburn pointed to serious gaps in oversight for the project, which international hydro expert Harvey Elwin says is the most secretive he has encountered during five decades working on large hydro projects around the world, including in China. 

Spoiler alert: Milburn revealed that BC Hydro tried to fire its independent oversight adviser, Ernst & Young, after the firm wrote a report “identifying many deficiencies” in BC Hydro’s systems and flagged the project’s growing risk.  

Read on as we dive into the contents of the Milburn report and the government’s claim it had no choice but to continue building the Site C dam. 

1. Will hydro bills soar if the Site C project is cancelled?

Horgan said cancelling the Site C project would “shock” people’s hydro bills “with a rapid increase in rates.”  

The project’s sunk costs would automatically have to be paid off by ratepayers over a 10-year period, the premier said. 

That would result in an average annual increase of $216 for residential customers, Horgan said, or $18 a month. 

B.C. Energy Minister Bruce Ralston told reporters that the dam’s sunk costs would have to be taken on immediately by taxpayers or ratepayers.

“In either case, the impacts would be severe and would deal a crippling blow to people and to BC Hydro when we are trying to build back lives and businesses from the impacts of the pandemic.”

But U.S. energy economist Robert McCullough told The Narwhal that the government pulled the 10-year figure out of thin air. 

McCullough said there’s no requirement — in B.C., or anywhere else in North America — for the money to be recovered over one decade. 

Sunk costs could be paid off over 30 years or longer, meaning that an increase in hydro rates would hardly be noticed, said McCullough, who provided expert advice on the Site C project to the newly appointed NDP provincial cabinet in 2017. 

Normally, a decision about the best way to pay for a Site C dam write-off — without unduly affecting ratepayers — would be made by the watchdog B.C. Utilities Commission (BCUC), which looks out for the public interest. 

But the previous BC Liberal government, determined to push ahead with construction of the dam, changed the law to strip the independent commission from Site C project oversight. The NDP has not restored that oversight.  

Premier John Horgan at a January media availability. Horgan surprised reporters with the news that the government had commissioned two international dam safety experts to review BC Hydro’s proposed “fix” for the Site C dam’s weak foundation. Photo: Province of B.C. / Flickr

“Given the scale of the mismanagement to date, a financially prudent government would refer the issue of cost of cancellation and repayment of outstanding debt to the independent B.C. Utilities Commission for expedited review,” McCullough wrote in a March 1 report for the Peace Valley Landowner Association, representing property owners who will be affected by the Site C dam.

In an interview with The Narwhal, B.C. Utilities Commission chair and CEO David Morton confirmed there are no rules that would require Site C sunk costs to be repaid within 10 years. 

Had the commission been asked to find a way to minimize the impact of cancellation on ratepayers, Morton said a timeline for writing off the debt would have been determined through an “open and transparent” hearing process. 

All stakeholders would have had an opportunity to participate in the hearing — including BC Hydro, ratepayer associations, experts and individuals — and a determination would have been made by a panel on the basis of evidence and submissions, Morton explained. 

“Processes have to be conducted in a fair manner under the principles of natural justice and under our laws around administrative fairness. Which means that all parties have an opportunity to be heard, they have an opportunity to present evidence. They have an opportunity to defend that evidence and challenge other evidence. That all takes time.”

Morton said the commission always takes certain principles into account when setting rates. 

Firstly, the commission seeks to avoid or mitigate any rate shocks, he said. 

A second principle is intergenerational equity. “In other words, it’s okay if you and I have to pay for costs that are incurred on our behalf even if it was a write-off. But it’s not okay to expect our children to pay, and even less fair to expect our grandchildren to pay.”

“The longer you stretch the costs, the more inequitable it is. Those would be the principles that would be looked at.”

2. Let’s rewind, what exactly is the Milburn report?

Last July, BC Hydro revealed that the Site C dam project was facing unknown cost overruns, schedule delays and such profound geotechnical problems that its overall health was classified as “red,” meaning the project was in serious trouble. 

Ralston announced the appointment of Milburn as a special Site C project advisor to examine the project and provide the government with independent advice.

Milburn, who worked with a team of eight people with expertise in major capital projects, construction management and engineering, was charged with delivering an interim report to the government within 30 days. 

Milburn’s final report was dated Oct. 10, meaning that he handed it in during the provincial election campaign that began on Sept. 21. 

Did the NDP government get wind of the Site C dam’s escalating price tag, through Milburn’s interim report, before it called a snap election one year ahead of the scheduled date for voters to go to the polls?

That question has still not been answered. 

Only a summary of Milburn’s report was made public; the full report has not been released. 

Crews pour concrete at the Site C dam construction site in February, 2021. Photo: BC Hydro

3. What did Milburn’s Site C report say? 

Milburn focused on four key areas of the Site C project: governance and oversight, geotechnical issues, risk, and construction supervision and claims management. 

On the topic of risk, Milburn found the level of resources BC Hydro dedicated to risk management was “very inadequate.” 

BC Hydro could have done a much better job anticipating risks, quantifying the range of risks, tracking the effectiveness of risk mitigation and communicating risks, Milburn found. 

He said BC Hydro emphasized the significant amount of engineering studies that had been conducted and the knowledge about geotechnical issues at the site.

“These assurances, along with the low value placed on geotechnical risk, likely gave a misplaced sense of security to the recipients of this information.” 

Milburn said BC Hydro should have made a greater allowance for geotechnical risk when seeking project approval from the government, especially because many Peace River area projects have experienced “unexpected geotechnical issues despite extensive investigation.” 

Former BC Hydro CEO Marc Eliesen has said geotechnical concerns were a primary reason why the Site C dam was rejected in the early 1990s by BC Hydro’s board of directors. 

Read more: ‘Who would feel safe?’ Site C dam concerns build in downstream communities

4. Why did BC Hydro try to fire Ernst & Young?

As the cost of the Site C project soared by $2 billion in 2017, BC Hydro pledged to improve due diligence and project controls. 

It hired Ernst & Young, a multinational professional services network, to provide independent oversight. 

In May 2018, Ernst & Young put together a report for Site C’s project assurance board (more on that board below), identifying “many deficiencies in BC Hydro’s systems,” according to Milburn’s report.

But then the relationship between BC Hydro and Ernst & Young deteriorated, Milburn noted. 

BC Hydro said Ernst & Young was not producing enough value for money. Within a few months, BC Hydro notified Ernst & Young its contract would be terminated. 

We don’t know what transpired right after that but, a short time later, BC Hydro “rescoped the contract” to lessen the firm’s role in overseeing the Site C project, according to Milburn.

“Ultimately, BC Hydro determined the amount and type of oversight they would receive from [Ernst & Young]. This appears inconsistent with the concept of independent oversight and with BC Hydro’s commitments to government,” Milburn wrote. 

Ernst & Young continues to provide independent oversight but “the cooperation they receive from BC Hydro appears at times to be limited,” Milburn noted.

5. What about the Site C project assurance board?

In late 2017, when the newly elected NDP government announced the Site C dam’s price tag had climbed by almost $2 billion, Horgan said a new project assurance board would improve governance and oversight.  

The board was tasked with identifying risks and ensuring the project would be completed safely, on time and on budget.

But it turns out that BC Hydro, which proposed the idea of a project assurance board, promptly limited the board’s oversight, according to the Milburn report. 

For the first eight months, the oversight board was chaired by BC Hydro board chair Ken Peterson. Then the board was chaired by John Nunn, the former chief engineer for the Site C project.

As previously reported by The Narwhal, six members of the assurance board were also BC Hydro directors. They included civil engineer John Ritchie, a former senior consultant for Hatch, an engineering and consulting firm BC Hydro hired to work on the Site C dam.

McCullough, whose testimony to a U.S. Senate Committee helped spark the criminal investigation into Enron, said having BC Hydro board members on the assurance board was “like putting the fox in with the chickens.” 

“It’s simply foolish.” 

Read more: The most expensive dam in Canadian history: cost of B.C.’s Site C dam balloons to $16 billion

Other assurance board members included consultant Lorne Sivertson, author of a pro-Site C report for construction trade unions that was used to discredit an independent report by the B.C. Utilities Commission, The Narwhal also previously reported. 

Two top civil servants sat on the board and were charged with reporting to the government. 

One was Les MacLaren, assistant deputy minister in the energy ministry, who since 2008 has been responsible for approving Site C briefing notes for ministers and conversing with ministers about the project. 

The other was then-deputy finance minister Lori Wanamaker, who in 2017 challenged the BCUC’s findings about the Site C project in a six-page letter she co-wrote that seemed to suggest the newly elected NDP government was searching for a rationale to continue the project. 

Wanamaker was recently promoted and is now Horgan’s deputy minister.

Milburn interviewed assurance board members, who indicated that BC Hydro did not allow the board enough opportunity to fully explore the issues and create independent recommendations. “Some PAB members felt frustrated by this process.”

“Our team recognizes that the strongest and most valuable due diligence often comes from individuals who have not been associated with the project,” Milburn wrote, recommending more external membership on the assurance board. 

“Due diligence requires independence.” 

6. What role has the COVID-19 pandemic played in Site C’s escalating cost? 

The short answer? We don’t know. The government and BC Hydro haven’t disclosed details about the latest $5.3 billion in cost overruns. 

“The COVID-19 pandemic has presented challenges and construction delays that we could have never foreseen,” Horgan said at the news conference. 

At a technical briefing for reporters, a government spokesperson said 50 per cent of the cost overruns were caused by the pandemic and the geotechnical problems. But the spokesperson, who can’t be identified according to protocols for technical briefings, declined to break down the number any further.

The other 50 per cent of the cost overruns — the source of which has not been disclosed — has nothing to do with the pandemic or the geotechnical issues. 

Some details may be revealed when BC Hydro submits overdue quarterly reports to the B.C. Utilities Commission and answers questions the commission posed last fall. Ralston said he has asked BC Hydro to provide the reports and answers, but as of press time they had not yet been submitted.

There are many unanswered questions about the reason for ballooning costs at the Site C dam project. Photo: Garth Lenz / The Narwhal

7. What about Site C jobs? 

Horgan said he couldn’t justify putting thousands of people out of work if the project were cancelled. 

“Cancelling Site C when it’s half done would have meant laying off 4,500 workers just as we’re coming out of the economic impact of the pandemic,” the premier told reporters.

As of March 9, there were 1,166 people staying in the Site C dam work camp. In December, the last month for which BC Hydro has reported project employment figures, there were 3,716 Site C dam workers, one-third from outside B.C. Another 712 people were employed as engineers or BC Hydro construction management and project staff.  

Site C job numbers have been exaggerated by successive provincial governments. Former Premier Christy Clark repeatedly said the project would create 10,000 jobs, a figure never revised by the NDP once it came to power.

When BC Hydro considered building the Site C dam in the 1990s, it said the project would create 2,182 construction jobs. The much larger WAC Bennett dam employed 3,500 people at peak construction in the 1960s. 

Horgan and Ralston did not say how many people could have been employed in clean-up and remediation had the project been cancelled.

They also did not say how many jobs could be created if the rest of the money earmarked for the Site C project was dedicated to creating jobs in cheaper and more nimble renewable energy projects and energy conservation measures such as retro-fitting buildings. 

In 2017, the BCUC found that the same amount of power that will be produced by the Site C dam could be created for $8.8 billion by a suite of renewables, including wind — and the price of wind has since dropped. 

Judith Sayers, Nuu-chah-nulth Tribal Council president and a board member of Clean Energy BC, said clean energy projects led by First Nations would create far more long-term jobs than the Site C dam.

“When Site C is up and running it’s 25 measly jobs and right now, those 4,000-odd workers that they’re talking about, a lot of them come from out of province. They just have work for a few years and then they’re gone.” 

“It’s not the long-term employment that is needed by people to sustain their families and their homes and their communities.”

A worker prepares a pile extension as part of work at the Site C dam in February 2020. Photo: BC Hydro

Sayers pointed to the B.C. Indigenous Clean Energy Initiative, which she said has created 1,089 jobs over the past six years with approximately $3 million in annual federal and provincial funding. That work involves installing heat pumps, solar, geothermal and other climate-friendly projects in First Nations communities. 

In the process, 418,000 tonnes of greenhouse gas emissions have been prevented and almost $2 million has been saved in annual energy bills, Sayers said. “This is only one small fund.”

Many First Nations communities had plans for larger clean energy projects, including wind and run of river hydro projects, that would produce energy for the grid. But those long-term projects, in every area of the province, have been mothballed due to the Site C dam, Sayers said. 

“I think that the premier and his cabinet have turned a blind eye to anything else. For whatever reason, they want to build Site C. I have never understood this.” 

8. Does B.C. need the power from the Site C dam?

Horgan sidestepped the question of whether B.C. needs power from the Site C dam, telling reporters the province needs “to get this asset built to benefit future generations.”  

A joint review panel that examined the Site C project for the provincial and federal governments found B.C. didn’t need the power in the time frame presented by BC Hydro. 

The BCUC, in a fast-tracked 2017 economic review of the Site C project, found BC Hydro has a historical pattern of over-estimating energy demand. Even with the electrification of the province, the commission said BC Hydro’s mid-load estimate of energy demand was “excessively optimistic.” 

Despite a fast-growing population, B.C.’s energy demand has been stagnant since 2005, and recent mill closures have freed up even more electricity.

Power from the Site C dam can be sold to the U.S., but at a huge loss. 

The going rate for electricity exports is currently about $37 per megawatt hour while Site C’s power will now cost about $135 per megawatt hour, according to McCullough’s report, meaning B.C. would lose 72 cents on every dollar of Site C power it exports. 

When the Site C dam’s price tag was $7.9 billion, BC Hydro told the joint review panel the energy would cost $83 per megawatt hour. 

9. How much have we spent on the Site C dam?

About $6 billion has been spent on the Site C project so far, with $10 billion to go. 

Horgan said cancelling the dam would cost $10.2 billion, with nothing to show for it.

But the government has not presented a detailed breakdown and justification for the $10.2 billion cancellation cost estimate, or any potential mitigation strategies to reduce that cost, McCullough pointed out. He called the government’s focus on sunk costs, rather than costs still to come, “a failing grade in economics 102.”

“It is completely inappropriate for them to be saying ‘well, we’ve spent a lot of money so we’ll keep on going.’” 

“The fact is any economist, any accountant, any financial expert, including Moody’s, will tell you that the money is spent, it’s gone, it has no impact on our future economic decisions.” 

10. What’s next for Site C? 

Milburn made 17 recommendations to improve commercial and risk management and project oversight. 

 All of the recommendations have been accepted by the government, said Ralston, who called Milburn’s report a “path forward to complete Site C.” 

One potential wildcard is uncertainty about geotechnical conditions below the dam structure, where excavations haven’t taken place — a potential issue flagged by two independent safety experts who recently approved BC Hydro’s proposed fix to existing geotechnical issues related to the project’s weak foundation.

In his report, Milburn said it was important to note “the risk of additional geotechnical issues on this project continues at the time of writing.”

Another wildcard is the landmark Treaty Rights case brought by West Moberly First Nations, alleging that the Site C dam and two previous dams on the Peace River constitute an unjustifiable infringement of Treaty Rights. The trial begins in March 2022 and is expected to last about six months. 

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Concerns about the safety of the Site C dam are mounting in some downstream communities along the Peace River, despite the B.C. government’s assurances that the project can be completed safely after two independent experts approved BC Hydro’s proposed fix for the dam’s weak foundation.

The fix involves driving as many as 125 concrete-filled pipes 25 metres into the ground — the height of an eight-storey residential building — to extend the foundation of the dam, its powerhouse and spillways. 

Additional instrumentation will also be installed to monitor any movements beneath the dam for the duration of its projected 70 to 100-year lifespan “as a continued precaution [to] help ensure safety,” following ground movements detected in August 2018.

The fix will be the first of its kind in the world, as there are no other earthen L-shaped dams. 

“I am confident that the Site C dam can proceed safely and will be built to the highest dam standards,” Premier John Horgan told reporters at a Feb. 26 news conference, where he announced the troubled project will continue with a new price tag of $16 billion — making it the most expensive dam in Canadian history with nearly five years of construction still to come. 

Terry Ungarian, Reeve for the County of Northern Lights, a municipal district in northwest Alberta that stretches along the west side of the Peace River, said the county’s concerns about the safety of the dam have heightened since Horgan’s announcement. 

In a long-awaited summary report on the Site C project, released on Feb. 26, former B.C. deputy finance minister Peter Milburn said BC Hydro has consistently underestimated the geotechnical risk in building the dam and noted “the risk of additional geotechnical issues on this project continues at the time of writing.”

“When they admit themselves that there’s still potential for further problems, well what does that mean?” Ungarian asked. “That’s leaving themselves fairly open for interpreting that as ‘the fix isn’t bullet proof. It isn’t totally solid.’”

“I’m not a geologist or an engineer … But what I’ve read indicates that it’s being built on a very poor type of material. What is the solution? I don’t know that they even know themselves. They throw another $6 billlion at it, and say they’ve resolved it. Well, have they?”

“I don’t think we’re ever going to get reassurances that this is nothing to worry about.”

A dam failure or overtopping would cause extensive damage and flooding in the County of Northern Lights, including to a pulp mill and recreational and agricultural properties, Ungarian told The Narwhal.

He said Peace River MLA Dan Williams will be attending a March 8 council meeting and the county will ask Williams to bring safety concerns to the Alberta government, in the hopes that the two provincial governments will discuss the matter.

“We’re turning to our provincial government to try to find us those answers.” 

Top B.C. government officials knew in May 2019 that the Site C dam faced geotechnical problems due to its “weak foundation,” according to documents obtained by The Narwhal. Photo: Jayce Hawkins / The Narwhal

Despite approval, experts say responsibility for Site C’s safety rests with BC Hydro

Horgan’s announcement ended months of speculation about whether or not the Site C project would continue, following the disclosure last July — after BC Hydro and the B.C. government withheld information from the public — that the foundation for the earthen dam, powerhouse and spillways required shoring up after 1.7 million cubic feet of aggregate concrete had been poured.

BC Hydro said at the time that it did not know how to fix the problems, how long it would take or what the cost would be.

In January, Horgan surprised reporters with the news that two independent dam safety experts had been commissioned to examine the fix proposed by BC Hydro. 

Steep slopes along the banks of the Peace River in the Site C dam flood zone. The dam will flood 128 kilometres of the Peace River and its tributaries – about the distance of driving from Vancouver to Whistler. Photo: Jayce Hawkins / The Narwhal

Kaare Hoeg, a Norwegian engineer, and John France, an independent consultant from Colorado who worked for 25 years for Aecom, a California company that has received hundreds of thousands of dollars in Site C project contracts, were tasked with determining if it was safe to proceed with the dam.

The pair found the dam will be “safe and reliable” and will meet safety guidelines established by the Canadian Dam Association, the government said.

While Hoeg and France approved BC Hydro’s fix, they said their opinions were based on information provided by the Site C project team and that the ultimate decisions and responsibilities for design rests with BC Hydro. 

Read more: Active Peace Valley landslide renews questions about slope instability and B.C. government secrecy

“Our review services were performed within the limits prescribed by BC Hydro in a manner consistent with the level of care and skill normally exercised in the current standard of professional engineering practice,” they wrote in a geotechnical safety overview report. 

“No other representation to BC Hydro, expressed or implied, and no warranty or guarantee is included or intended.” 

Old Fort, B.C., residents worried about soil excavation for Site C dam construction

Scott Campbell, a construction worker who has lived in the B.C. community of Old Fort for 20 years, said he and others in the riverside settlement, two kilometres downstream from the Site C dam, continue to fear for their safety. 

“I have tried to get the attention of BC Hydro about the safety concerns of the dam and what they will be after the dam is built as well — if it even works, which many of us are afraid it will not,” Campbell said in an email to The Narwhal. 

“I think about it every day, if not several times a day. It is not fair that we live so close to a dam that has this many geotech issues. Who would feel safe?” He said Horgan should be true to his word about engaging in a meaningful dialogue with local communities and come to Old Fort to speak with worried residents.

Old Fort has experienced two major landslides since 2018, which cut off the only road into the community of 150, forcing Campbell and other residents to evacuate during the first landslide. Several homes remain under evacuation alert.

The road to Old Fort, crumpled by a November 2018 landslide on the notoriously unstable slopes of the Peace River. Photo: Jayce Hawkins / The Narwhal

A December 2020 report from B.C.’s chief inspector of mines found the root cause of the landslides could not be determined. In January, 35 Old Fort residents filed a lawsuit against the B.C. government, BC Hydro and three other parties, alleging in part that construction of the Site C dam has had adverse consequences on their safety and the value of their homes, and claiming damages.

Lawyer Malcolm Macpherson, who represents the residents, pointed out that 32 million cubic metres of soil is being excavated to build the dam. 

“That’s gargantuan in size,” he said in an interview. “My clients are saying ‘look, how do you realistically move 32 million cubic metres of structures and not affect waterways and not affect nearby soil support?’”

Old Fort residents remain concerned about their safety following the news that construction of the Site C dam will proceed, Macpherson said. 

“The announcement has not addressed their underlying concern for their safety, the well-being of their families and their right to have the soil under their family homes supported in a natural state.” 

Read more: Top B.C. government officials knew Site C dam was in serious trouble over a year ago: FOI docs

‘There are too many risks,’ former BC Hydro CEO says

Former BC Hydro CEO and president Marc Eliesen, who was at the helm of BC Hydro when its board of directors rejected the Site C dam in the early 1990s — in large part due to geotechnical concerns — said no independent review can provide a satisfactory level of comfort that the Site C dam will be safe.

“BC Hydro has studied this area for years and years and years,” said Eliesen, who is also the former CEO of Ontario Hydro and the Manitoba Energy Authority.

“They know what kind of turf they’re dealing with — sedimentary shale. Think mud. It’s prone to erosion and it’s prone to landslides. It’s prone to water seepage. The bottom line, in the context of what has taken place, is you should not build there. There are too many risks.” 

“The ground is too unstable. There are too many surprises … No amount of review will give you a greater comfort level of ensuring that it will be safe and it will be operational and there will be no additional expenditures.”

Eliesen said the final tab for the dam could reach $20 billion. 

“There’s never been this kind of a problem before. They’ve never had this kind of design before for a powerhouse and spillways, at a right angle. It’s never been done. This is all brand new.” 

The B.C. government said Hoeg and France, along with the Site C technical advisory board — a panel of engineering and construction experts — reviewed the unconventional L-shaped design of the earthen dam and “all reviews concluded that the main dam design is safe.” 

However, Hoeg and France acknowledged in their report that there is uncertainty about the foundation conditions for the dam structure “as that area has yet to be excavated, mapped and grouted.” 

Additionally, the safety report the B.C. government commissioned Hoeg and France to write doesn’t follow all safety review guidelines established by the Canadian Dam Association, which state that a site visit must take place during a review.

At a Feb. 26 technical briefing for reporters, a government official, who cannot be named due to the protocols for technical briefings, confirmed that Hoeg and France met virtually with the Site C design team and the project’s technical advisory board to review BC Hydro’s proposed solution to the dam’s foundation problems, but they did not travel to the site.

In an emailed response to questions, Canadian Dam Association president and engineer Terry Oswell said a dam safety review, which includes a review of a dam’s design and construction, “has the overall goal to protect people, property and the environment from harmful effects of mis-operation or failure of dams and reservoirs.” 

“A safe dam is one that performs its intended function under both normal and unusual conditions, does not impose an unacceptable risk to people, property or environment, and meets applicable safety criteria.” 

In 2016, the association published a technical bulletin on dam safety reviews, outlining the process for carrying out a review and the roles and responsibilities of the dam owner and review engineer. 

“The essential conclusion of a dam safety review is a statement on the safety of the dam,” Oswell said. 

She said an independent qualified dam review engineer must understand the dam safety management system and the risk controls in place to halt the progression of failure modes — such as overtopping, foundation defects and cracking — or to mitigate consequences. 

A dam safety analysis is carried out by identifying hazards and failure modes, performing or reviewing analyses for dam performance for each of the hazards and failure modes and assessing the adequacy of risk controls, she said.

In addition to a site visit, a safety review must include interviews with staff who have responsibilities for dam safety. 

Oswell said that because the Canadian Dam Association does not collect records of safety reviews, it is unable to say whether the Site C review meets its guidelines.

The B.C. government said it commissioned Hoeg and France to write the safety report because they have considerable global experience with earthen dams and neither had “any involvement with the Site C project to date.”

Hoeg was one of three international experts in embankment dams who conducted an extensive safety review of the WAC Bennett dam after a sinkhole was noticed by a tourist in 1996. 

The three experts were asked to conduct “their own, fully independent, bottom-up review of the dam design and performance,” which took about one year and involved several site visits.

According to France’s online bio, he served on an advisory board to review BC Hydro’s planned dam safety modifications of the Strathcona dam on Vancouver Island and on an advisory board to review planned dam safety modifications of the Ruskin and Blind Slough dams in Mission, B.C.

Aecom, France’s former employer, has received at least $674,000 in no-bid Site C dam contracts for providing the services of Site C dam “independent construction advisor” Steve Summy and the services of its program manager Joe Ehasz, who sits on the Site C project’s technical advisory board. 

Updated March 5, 2021, at 12:15 p.m. PST: This article has been updated to say that Aecom received hundreds of thousands of dollars in Site C contracts, not hundreds of millions as previously stated. A paragraph mentioning the company Aecom and the AFDE partnership has been removed from the story. John France worked for Aecom, not Aecon.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

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

B.C. ‘playing Russian roulette’ with Site C plan: former BC Hydro CEO

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.”

Site C dam continuation a form of ‘cultural genocide’: West Moberly First Nations Chief

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.”

B.C. touts demand for renewables as experts flag Site C’s impacts

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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A Treaty 8 First Nation is going to court seeking the release of all documents related to significant geotechnical problems and safety risks at the troubled Site C dam under construction on B.C.’s Peace River.  

West Moberly First Nations announced Monday it is seeking an order to obtain detailed information about geotechnical issues that require shoring up the dam structure, powerhouse and spillways, which are being built on a “weak foundation,” according to documents obtained by The Narwhal.

The nation is also asking the B.C. Supreme Court to order the release of the government-commissioned Peter Milburn report on the status of the over-budget project, as well as all documents shared with two international safety experts who are reviewing a surprise “fix” to the dam’s stability issues proposed by BC Hydro.  

“Site C is a public infrastructure project,” said Roland Willson, chief of West Moberly First Nations, which has a pending Treaty Rights case against the dam. “And everything should be above board. We should see all the information about what’s going on.  Nothing should be kept secret, especially when it has a possible effect on Treaty Rights.”

“They take their documents and then they go and hide behind closed doors and leak out little pieces of information that they deem fit to release. That’s not right.” 

Tim Thielmann, legal counsel for West Moberly First Nations, said the nation is requesting a hearing take place within the next two weeks on urgent grounds and that the documents be released within seven days after the hearing. 

Chief Roland Willson believes the public should have more access to information about the dam. “Nothing should be kept secret, especially when it has a possible effect on Treaty Rights,” he says. Photo: West Moberly First Nations

Clearing for the Site C dam has destroyed beautiful and rare hillside wetlands called tufa seeps in the Peace River Valley. The seeps likely took thousands of years to form, making them older than the Hanging Gardens of Babylon and the Great Wall of China. The largest tufa seeps had chambers the size of rooms. Photo: Garth Lenz / The Narwhal

BC Hydro classified the Site C dam’s overall health as “red” in December 2019, meaning the project is in serious trouble, yet construction has continued shrouded in secrecy, Thielmann pointed out.  

“There’s absolutely no plans made public about what the solutions to these structural problems might be, what the costs of any of the solutions or options might be, what the schedule implications of any of those solutions or options might be, and whether any of them can be completed safely,” Thielmann said in an interview.

“And yet the project continues to chug along at $3 million a day, destroying the heartland of my clients, West Moberly First Nations, who live and rely on these lands for their way of life.”

Chief Willson said bulldozers are “ripping up the valley” even though there is no certainty that the Site C dam can ever be safely completed. 

“They’ve destroyed unbelievable habitat,” he said. “The ecosystem that’s here was unique … We’ve lost old-growth forests in the valley, specific medicines that were in the valley, they’ve pretty much stripped the whole thing.”

“If people don’t live here, they don’t see what’s happening. The displacement of wildlife here is unbelievable.” 

Nation may seek an injunction to stop Site C dam construction

In an open letter to Premier John Horgan and his cabinet, released Monday, West Moberly First Nations warns it is also “actively considering” a return to court to seek a new injunction to stop work on the dam until cabinet makes a final determination about whether or not to proceed with the project, which the nation calls “unsafe, unnecessary and unlawful.”

The court denied the nation’s previous injunction application in October 2018 but said a new injunction could be granted if there were an “unforeseen and compelling change in circumstances” before a landmark Treaty Rights trial is scheduled to begin in March 2022.

West Moberly First Nations alleges that the Site C dam and two previous dams on the Peace River constitute an unjustifiable infringement of its Treaty Rights. 

The Site C dam will flood 128 kilometres of the river and its tributaries, destroying important Indigenous cultural and spiritual sites and the last tract of the Peace River Valley available for traditional practices such as hunting, trapping and fishing, while also poisoning bull trout and other food fish with methylmercury. 

Last July, when the B.C. government disclosed the geotechnical problems in a hasty press conference at the start of the mid-summer long weekend, Energy Minister Bruce Ralston announced the appointment of Milburn, a former B.C. deputy finance minister, to write an “independent report” on the project. Milburn submitted his report before the Christmas holidays, but the government has not released it.

In a surprise statement in January, Horgan said the government has appointed two international dam safety experts to assess a solution to the geotechnical problems proposed by BC Hydro and would release Milburn’s report once the experts had completed their work. He did not provide a timeline.

“The fix that’s been proposed by [BC] Hydro, we’re now asking for two other opinions on the efficacy of that fix,” Horgan told reporters. “That’s not to say that Milburn’s report isn’t comprehensive, but it is appropriate that we make sure that the fix that is being proposed to the geotechnical challenge is going to be safe.” 

The area around the Moberly River, which provided habitat for at risk species such as the fisher, was a culturally and spiritually important place for Treaty 8 First Nations. The old-growth forest around the mouth of the Moberly River, which will be flooded by the Site C dam’s reservoir, was clear-cut by BC Hydro. Photo: Garth Lenz / The Narwhal

Former BC Hydro CEO Marc Eliesen said Milburn’s appointment was a “smokescreen” for continuing construction on the project — with no certainty the dam can ever be finished — while the government called a fall election one year ahead of schedule in the hope of securing a majority NDP government.

“They have no intention whatsoever of stopping,” Eliesen, who is also the former chair and CEO of Ontario Hydro and the Manitoba Energy Authority, said in an interview.

“This is part of the ongoing deception that both the government and BC Hydro have been practicing on the citizens of B.C.”

Eliesen said it was clear from the start that Milburn did not have the expertise to assess the Site C dam’s geotechnical issues — something Horgan confirmed at a media availability on Jan 14. 

“What he [Milburn] could do, and probably what he has done, is put [together] a summary of what BC Hydro thinks the cost will be with the new fix and how it will impact the schedule … That’s something any consultant can do. But he didn’t have the background or the technical ability to assess anything related to the stability of the foundation.”

Eliesen said it’s telling that the government will not release the terms of reference for either the Milburn report or the report commissioned from the two independent dam safety experts, Norwegian Kaare Hoeg and John France, an independent consultant who used to work for California-based Aecom, a former BC Liberal Party donor. Aecom has received at least $674,000 in no-bid Site C dam contracts for providing an “independent construction advisor” and the services of its program manager Joe Ehasz, who sits on the Site C project’s technical advisory board. 

In an affidavit, West Moberly First Nations demands the government release any terms of reference or supporting documents from the safety reports, any draft of the safety reports or communications that related to them, briefing notes and notes to cabinet and recommendations related to the safety reports.

The nation’s demand comes one week after residents of Old Fort, a riverside community near the dam construction site that has suffered two major landslides since 2018, launched a class action lawsuit against the B.C. government, local government and BC Hydro, saying it was foreseeable that Site C construction would cause or contribute to a landslide. The allegations have not been proven in court. 

‘We are hemorrhaging public funds’

Eliesen said revelations last summer that water is seeping into huge amounts of concrete that have been poured on the Site C dam’s south bank, where the spillways and powerhouse will be located, are deeply disturbing. 

“It’s the foundation for the spillway and for the structure for the turbines and generators. And you’re saying that it’s shaky? That the water has seeped in? That’s a calamity.”

Thielmann said the geotechnical issues constitute the “unforeseen and compelling change in circumstances” that would allow West Moberly First Nations to request an injunction to stop work on the project. 

Horgan has mused publicly about cancelling the project on at least two occasions and the government stated in a press release that the geotechnical problems constitute a new challenge for the project, originally scheduled for completion in 2024, Thielmann pointed out. 

“This is a fundamentally major re-think of the project itself,” he said. “We are hemorrhaging public funds and destroying sacred land on a project that may not be completed. I can’t think of a more substantial or compelling change in the status of the project.” 

In a press release, West Moberly First Nations noted that BC Hydro is withholding its two latest quarterly Site C dam progress reports from the B.C. Utilities Commission. BC Hydro has also not answered the commission’s detailed questions about the project, which include querries about geotechnical issues and no-bid contracts.

Old-growth cottonwoods along Moberly River provided important habitat for species vulnerable to extinction, such as the fisher. The cottonwoods were logged to make way for a Site C dam waste rock dump. Photo: Garth Lenz / The Narwhal

An October investigation by The Narwhal revealed that senior officials in the B.C. government knew about the dam’s weak foundation in May 2019, more than one year before the information was shared with the public, the de facto owners of the dam. 

In the open letter, Chief Willson urged Horgan to follow through with the government’s promise to implement the UN Declaration on the Rights of Indigenous Peoples and to uphold rights guaranteed by Treaty 8. 

“You can reject the madness of ploughing ahead with this unnecessary, unsafe, and unlawful project,” the letter said. 

“You can choose instead to immediately suspend the project. You can work with West Moberly and other Indigenous treaty partners to provide truly clean energy alternatives that meet the needs of all British Columbians. You can show Canada and the world that the only way to escape our colonial history of neglect and betrayal is to act boldly and honourably in the decisions that lie before us today.”

Prophet River First Nation also filed a civil action alleging that the Site C dam and two previous dams on the Peace River constituted an unjustifiable violation of Treaty Rights. The Nation withdrew its civil claim last year after reaching a settlement with the B.C. government and BC Hydro, saying the Site C project had been approved without its free, prior and informed consent and had “painfully impacted” Treaty 8 nations.

Other Treaty 8 members who were previously opposed to the dam have signed impact benefits and land transfer agreements with the B.C. government and BC Hydro that provide for lump sum and annual payments, along with contract work on the project.

A Joint Review Panel that examined the project for the B.C. and federal governments concluded the impacts of the dam on First Nations traditional land use would likely be adverse, significant and impossible to mitigate.

The B.C. government did not respond to a request for comment by publication time. The government does not normally comment on matters before the courts.

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The B.C. government has commissioned two expert reports to determine if BC Hydro’s proposed solution to the Site C dam’s geotechnical problems is safe, Premier John Horgan disclosed at a press conference on Thursday.

Horgan said the government will not make a decision about whether or not to cancel the publicly funded hydro project on B.C.’s Peace River until it has the two reports in hand. 

“They’ll be made public when we have them, and when cabinet’s had an opportunity to digest them.” 

The Premier said there are several “decision points ahead” for cabinet, but did not elaborate on what they are or when the safety reports may be delivered. 

“Before we release information to the public, we want to make sure we have all of the details,” he said in response to questions from Vancouver Sun columnist Vaughn Palmer. “We do not want to have half-measures at a critical point in a large industrial project that is well advanced.”

BC Green Party leader Sonia Furstenau said she was very surprised by Horgan’s “almost off the cuff” news that BC Hydro had proposed a new solution to the dam’s geotechnical problems and that the government had commissioned two safety reports to review it.

Horgan did not provide any information about the proposed solution, and BC Hydro has failed to file two quarterly reports with the B.C. Utilities Commission that would typically include such information. 

“This just compounds the whole astonishing level of secrecy, lack of transparency, lack of clarity on how this government is handling this project and meanwhile, day after day, millions and millions of dollars pour out,” Furstenau told The Narwhal. 

The Site C dam is under construction in an unstable valley notorious for large landslides. Five provincial highway bridges will have to be moved out of the future flood zone at ratepayers’ expense, including at the Halfway River, where geotechnical challenges are immense. Photo: Jayce Hawkins

Palmer pointed to giant sections of turbines moving slowly along northern B.C. highways this week from the Prince Rupert port to the dam site just outside of Fort St. John, saying it did not seem likely that the government would be putting Site C construction on hold after receiving a report from Peter Milburn, the former deputy finance minister tasked with assessing the troubled project. 

Milburn’s appointment was announced last July, following the public disclosure that the unstable foundation for the earthen dam, powerhouse and spillways requires shoring up. BC Hydro said it did not know how to fix the mounting problems, how long it would take or what the cost would be. 

“There’s a lot of work to do yet,” the Premier said. “Mr. Milburn did not have the capacity to address the safety challenges that could emerge as a result of the geotechnical issues that have arisen.” 

Read more: BC Hydro granted $171 million in no-bid Site C dam contracts as project troubles were kept secret from public

Horgan said Milburn worked with the information that was available to him. “The fix that’s been proposed by [BC] Hydro, we’re now asking for two other opinions on the efficacy of that fix.”

“That’s not to say that Milburn’s report isn’t comprehensive, but it is appropriate that we make sure that the fix that is being proposed to the geotechnical challenge is going to be safe. Out of an abundance of caution we’re asking for a second and third opinion on that.” 

Horgan said the turbine parts are moving to the project site because “to stop preparing to complete is not the direction that has been given. And so, it’s appropriate I think that those that are working on the facility do that, until such time as we don’t.” 

The Premier pointed out that the Kemano generating station near Kitimat also had turbines that were en route when the hydroelectric project was cancelled in 1995 by the NDP government led by Mike Harcourt.

“So it’s not unprecedented … We are still reviewing information and, most importantly, what’s outstanding is two safety reports at this point — and when we have those and they’ve been assessed and digested that will all be made public.”

B.C. public has yet to hear details of solutions to Site C’s geotechnical woes

Furstenau said Green Party MLAs asked B.C. Energy Minister Bruce Ralston about Milburn’s expertise during question period in December. 

“And we were completely dismissed by Minister Ralston, who said he had complete confidence in Mr. Milburn to do this report. The lack of consistency, on top of the secrecy and lack of transparency, is becoming just shocking.” 

“I think the public should be demanding of this government that they start to be transparent on this. This is public money that is being spent.”

In a Green Party press release, Furstenau said the admission that Milburn doesn’t have the expertise to advise on dam safety “makes it clear that the Milburn report has been used as a smoke-screen to continue construction and avoid answering questions.”

“The government and BC Hydro have known about serious geotechnical challenges since 2019. Now the Premier has admitted that they still need more information and that their own appointed expert did not have the capacity to advise on dam safety. Yet there is still no timeline and no information about the new experts and their terms of reference.”

An aerial view of the Site C dam’s south bank, where profound geotechnical problems were disclosed last July. The government commissioned former deputy finance minister Peter Milburn to report back on the project but his report — which the government has not made public — does not encompass potential safety issues. Photo: Site C Clean Energy Project

The Site C dam is already significantly over budget. According to a range of independent energy experts, the dam is uneconomical at its current price tag of $10.7 billion, a figure that doesn’t account for any further budget increases to address geotechnical problems. 

Safety concerns about the Site C dam, which is being constructed on unstable shale in a valley prone to large landslides, have been raised for years. 

An October investigation by The Narwhal revealed senior officials in the B.C. government knew in May 2019 that the project’s technical advisory board had flagged the stability of the dam as a significant risk, saying “the hazards associated with the weak foundation have been adequately recognized.” 

The Site C project is located in a geographical area filled with faults that can become critically stressed during fracking operations, which are poised to expand significantly in the region to supply gas for the LNG Canada export project. More than 10,000 earthquakes occurred in the wider area in 2017 and 2018, including one that shook the Site C dam construction site, forcing workers to evacuate. 

The advisory board also said the Site C dam’s design — changed to an unconventional L-shape, much to the concern of retired BC Hydro engineer Vern Ruskin — needed to be checked. 

The board outlined seven steps for BC Hydro to follow, including calculating “the factor of safety” at the end of construction and again at the end of reservoir filling. 

Furstenau said it all adds up to cause for public concern. 

“I’m deeply concerned about the safety of this dam, and the level of risk that is being accepted by this government is beyond belief in a lot of ways.” 

Horgan said he did not know who has been contracted to assess the safety of the geotechnical solutions proposed by BC Hydro, noting only that they are international experts.

The Narwhal asked the B.C. energy ministry for the names of the experts, who selected them, if they travelled to the dam site, when the reports might be delivered, and if the experts have any ties to the Site C technical advisory board or project assurance board, but the ministry was unable to respond by press time. 

The Site C project assurance board was established by Horgan’s government in 2018 to ensure the project was delivered on schedule and on budget. Its findings, as well as a list of its members, were kept secret from the public. 

Part of the Peace River that would be flooded for the Site C dam. The dam will inundate 128 kilometres of the Peace River and its tributaries, about the equivalent distance of driving from Vancouver to Whistler. Photo: Garth Lenz / The Narwhal

The Site C dam would flood 128 kilometres of the Peace River and its tributaries in Treaty 8 territory, destroying some of Canada’s best farmland and habitat for more than 100 species at risk of extinction. 

Two expert reports released last fall concluded British Columbians would save money if the Site C dam were immediately cancelled by the new B.C. government following the Oct. 24 provincial election. 

A report by U.S. energy economist Robert McCullough, commissioned by the Peace Valley Landowner Association, said the dam will conservatively cost an additional $2.1 billion and ratepayers will save an initial $116 million a year if the project is scrapped and the same amount of energy is procured from other sources. 

A memo from the C.D. Howe Institute, addressed to B.C.’s new government, said the case for the Site C dam is “getting weaker” and any meaningful cost increase above $10.7 billion makes cancellation the best choice.

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BC Hydro handed out more than $171 million in no-bid Site C dam contracts over an eight-month period ending in July 2020, including to the beleaguered engineering firm SNC Lavalin, The Narwhal has learned.  

SNC Lavalin, which in 2013 was banned from World Bank contracts for 10 years due to fraud and corruption overseas, received almost $27 million in three new direct-award Site C dam contracts, according to information The Narwhal received from BC Hydro through a freedom of information (FOI) request. 

That’s in addition to $131 million in Site C dam no-bid contracts BC Hydro had already granted SNC Lavalin, which is responsible for designing core components of the over-budget dam on B.C.’s Peace River, the largest publicly funded project in the province’s history.

The FOI response also shows that TE Little Consulting, a firm headed by Tim Little, BC Hydro’s former chief engineer, received $309,000 in December 2019 for Little’s services as the Site C dam “independent engineer.” According to an earlier FOI response, Little, who reports to the B.C. government on all aspects of the dam’s construction, also received a no-bid Site C contract as an “independent engineer” worth $360,000 in December 2018.

“This pattern of contracting out has been seen in so many past boondoggles and white elephants of government spending.”

Duff Conacher, co-founder of Democracy Watch, a national non-profit organization that focuses on government accountability and corporate responsibility, said all direct-award contracts for the Site C dam should be investigated through a full public inquiry.  

“In the big picture, [BC Hydro’s] contracting out process violates all the rules of good government spending,” Conacher, a PhD candidate in government ethics and law at the University of Ottawa, said in an interview.

“This pattern of contracting out has been seen in so many past boondoggles and white elephants of government spending.”

In 2010, former BC Liberal Party premier Gordon Campbell announced plans to build the Site C dam on the Peace River in northeast B.C., saying the project would cost $6.6 billion. 

Last year, the price tag stood at $10.7 billion, following three budget increases that included an extra $2 billion approved by the NDP government in 2017. 

But that was before the disclosure last July of geotechnical problems so profound that BC Hydro says it doesn’t know how to fix them, how long it will take or what it will cost. 

BC Hydro more than doubles number of no-bid contracts

Direct-award contracts allow BC Hydro and other public bodies to decide which companies or consultants get contracts, instead of going through a more transparent and competitive tender process.

Undisclosed BC Hydro employees have handed out hundreds of millions of dollars in no-bid contracts for work on the Site C project, according to The Narwhal’s calculations, based on responses to a series of freedom of information requests over the past four years. The exact amount is difficult to pinpoint because parts of all but the latest FOI response were redacted.

These no-bid contracts include two totalling almost $11 million that BC Hydro granted to a B.C. numbered company whose officers and directors were top executives of Petrowest, the Alberta company that went bankrupt and was dismissed from Site C’s main civil works consortium.  

The largest contract, for $10.1 million, was awarded to the numbered company in late July 2017 — just two weeks before Petrowest was let go from the consortium for insolvency and months after the company’s financial difficulties were reported in the media. 

BC Hydro’s FOI response lists 46 direct-award contracts, worth more than $171 million, from Nov. 4, 2019 to July 10, 2020 — more than double the no-bid contracts BC Hydro issued during the previous 12 months, which totalled $27 million.

The majority of the new contracts appear to be unrelated to solving the profound geotechnical problems related to the dam’s “weak foundation,” which senior officials in the B.C. government knew about for more than one year before the information was shared with the public last July, according to a November investigation by The Narwhal.

The latest round of no-bid Site C contracts includes:

• $854,000 to natural gas producer Canlin Resources Partnership for “wellbore lowering” at a gas well not used since 1967,  meaning that B.C. ratepayers will shoulder the cost of cleaning up after the oil and gas industry. BC Hydro spokesperson Mora Scott confirmed in an email that Canlin, which owned the well, “remediated, lowered and re-capped” the well “to facilitate construction” of the Site C dam.
• Almost $20 million for Klohn Crippen, an engineering firm that, along with SNC Lavalin, was selected by BC Hydro to design essential components of the dam, including the main civil works, generating station and spillways. Former Klohn Crippen engineer John Nunn, who was the chief engineer for the Site C project when he worked for Klohn Crippen, chairs the Site C Project Assurance Board, a secretive board established by the NDP government to oversee the Site C project. Both Klohn Crippen — which received $104 million in earlier no-bid Site C contracts — and SNC Lavalin were generous donors to the BC Liberal Party before political donations from corporations and unions were banned in late 2017.
• About $47 million to Cantex-Okanagan Construction Ltd., a former BC Liberal Party donor, for work on the embankment at Lynx Creek, upstream from the dam site, where a new highway bridge is under construction to replace one of five bridges in the dam’s future flood zone.
• Almost $1.2 million to Tracker Contracting Ltd., a road and lease construction company based in Fort St. John, in four separate contracts for “Site C construction work.” Tracker Contracting, a former BC Liberal Party donor, also received $3.8 million in direct-award Site C dam contracts between March 2016 and October 2018, as previously reported by The Narwhal.
• Almost $1.5 million to former BC Liberal Party donor Formula Contractors Ltd. for “Site C Area 4 prep.”
• Two contracts totalling $542,000 to California-based Aecom Technical Services for the services of “independent construction adviser Steve Summy” and Aecom program manager Joe Ehasz, who sits on the Site C project’s technical advisory board. Aecom, a former BC Liberal Party donor, also received a $132,000 Site C dam contract in August 2018 to provide an “independent construction adviser” for the project. 

In an emailed response to questions, Scott said the Site C dam’s procurement process “is designed to achieve value for money for ratepayers, as well as meet the project schedule, budget and technical requirements.

“The vast majority of contracts to date for the project have been sourced through an open and competitive bid process,” Scott said, noting that about 90 per cent of contracts have been awarded through public bid since construction began in 2015.

Scott said contracts to Little for his services as Site C’s independent engineer are not a conflict of interest because Little is no longer an employee of BC Hydro. Little’s last year as a salaried employee at the Crown corporation was 2011 — the year after the former BC Liberal government announced it would proceed with plans to build the Site C dam following a raft of engineering and other feasibility studies. 

Scott said a notice of intent for independent engineering services was posted on BC Bid, the province’s public bid website, in 2016. 

“As a result of this process, it was determined that TE Little Consulting Inc. was the preferred company to provide Site C independent engineering services, as they were the most qualified.” 

Site C dam construction underway along the Peace River in the fall of 2020. The project has been beset by geotechnical problems due to slop instability along the river’s banks. Photo: Jayce Hawkins / The Narwhal

First Nation gets almost $50 million in no-bid contract

Nineteen of the most recent contracts went to companies owned by or associated with Treaty 8 First Nations, who signed Site C impact benefits agreements with BC Hydro after the B.C. government gave final approval to the project. 

Treaty 8 members were previously opposed to construction of the Site C dam, which will have significant and irreversible adverse impacts on First Nations, according to the final report of a joint review panel that examined the project for the provincial and federal governments. Among many other impacts, the Site C hydro project will destroy Indigenous burial sites and other places of spiritual and cultural importance — including traditional hunting and fishing grounds — and poison fish with methylmercury.

By far the largest amount — more than $49 million, spread across six contracts — went to Duz Cho Construction, a construction company belonging to McLeod Lake Indian Band, the only Treaty 8 member that has spoken out widely in support of the Site C dam. Duz Cho Construction also received a $29.5-million direct-award Site C contract for “site preparation” work in 2016 on the Peace River’s south bank. 

4Evergreen Resources, a construction company owned by Saulteau First Nations, received more than $1.7 million in two separate contracts for “construction activities related to Site C,” while Securiguard Services Ltd., a company that has a joint venture with Saulteau First Nations, was awarded $7.2 million in two separate contracts for Site C dam “guard services.” Saulteau EBA Environmental Services was also awarded almost $161,000 for wildlife monitoring.

Halfway River IDL Ltd. Partnership, a partnership between the Halfway River First Nations and IDL Ltd., a construction company, was granted about $1.14 million in three separate no-bid contracts for construction work, grading and paving. Halfway River International also received $165,000 as a “Site C health clinic provider,” while forestry management service company Halfway River Frost LP received three separate contracts totalling more than $7.8 million.

Another Treaty 8 member, West Moberly First Nations, has launched a civil action alleging that the Site C dam and two previous dams on the Peace River constitute an unjustifiable infringement of treaty rights. A trial is scheduled to begin in March 2022 and will last about six months.

“It needs to be fully investigated, and I doubt it could be justified.”

The FOI response showed that BC Hydro spent $200,000 on “Site C Treaty 8 Litigation” in March 2020. 

Scott said a number of the direct-award contracts arose from impact benefit agreements or relationship agreements signed with Indigenous groups that included contract commitments. 

In contrast to the B.C. government, the federal government prohibits Crown corporations from giving direct-award contracts worth more than $25,000 unless there is a special justification such as a national emergency or national security interests.

Conacher said sole-source contracting can’t be justified, even if BC Hydro’s most recent no-bid awards to SNC Lavalin and Klohn Crippen relate to the unstable foundation on the Peace River’s south bank, which will anchor the dam, powerhouse and spillways.

He said the situation would have to be extremely dire for no-bid contracts to be acceptable. For instance, “This is going to fail tomorrow and we need to have someone come in today, and that’s why we’ve moved so quickly,” he said.

“It needs to be fully investigated, and I doubt it could be justified.”

A segment of the Peace River valley that will be submerged in the future flood zone, which will stretch along 128 kilometres of the Peace River and its tributaries, about the equivalent length of driving from Vancouver to Whistler or from Victoria to Nanaimo. Photo: Garth Lenz / The Narwhal

BC Hydro previously told The Narwhal that Klohn Crippen and SNC Lavalin are the only engineering firms that have the expertise, experience and capacity to provide engineering design services for the Site C dam.

But Conacher rejected that claim, pointing to the debacle over the federal government’s decision to give a lucrative no-bid contract to the WE Charity, a group with ties to the Trudeau family. The federal government had said the WE Charity, formerly known as Free the Children, was the only group capable of administering a national program designed to connect post-secondary students to volunteer opportunities, which didn’t prove to be the case.

“Usually, when these kinds of situations are investigated, all the claims are proven to be completely bogus — that any kind of exception to good spending rules applied,” Conacher said.

“You can’t make that claim after going through a no-bid contract process. You put out an open bid and then you make that claim after assessing all the companies that bid. How can you make that claim in advance? There’s just no way that BC Hydro, sitting in British Columbia, would know what companies worldwide have what capacities on an on-going basis.”

Direct-award contracts can be challenged under trade agreements

Conacher also said the Site C direct-award contracts likely violate the New West Partnership Trade Agreement among Canada’s western provinces, which mandates that any services or construction contract greater than $100,000 should be issued through open tender unless a public agency can prove an urgent or specialized need.

He said the no-bid awards could also be challenged under the Canadian Free Trade Agreement, which ensures fair and open access to government procurement opportunities for all Canadian suppliers.

Scott said the Site C dam procurement process is designed to fit within all applicable legislation and provincial policies, including trade agreements. The Canadian Free Trade Agreement and New West Partnership Trade Agreement have provisions that allow for direct-award contracts to Indigenous peoples, she said.

Support posts under construction for a new bridge crossing the Halfway River, one of five new bridges being built in order to move a provincial highway out of the future Site C dam flood zone. Photo: Jayce Hawkins / The Narwhal

Information about BC Hydro’s latest Site C no-bid contracts comes as the B.C. cabinet sits on a report from former B.C. deputy finance minister Peter Milburn, who was appointed by the government last July to report on the myriad problems facing the Site C dam. 

There has been no public update on the troubled project since last July, and BC Hydro has failed to file two outstanding Site C dam quarterly reports with the watchdog B.C. Utilities Commission to outline the project’s risks, progress and expenditures. The last quarterly report BC Hydro filed with the commission is current to March 31, 2020.

BC Hydro also declined to answer questions from the utilities commission, including about direct-award contracts, by the Nov. 19 response date, saying it is in the process of “re-baselining the project budget and schedule.” 

Two expert reports released last fall concluded British Columbians would save money if the Site C dam were immediately cancelled by the new B.C. government following the Oct. 24 provincial election. 

A report by U.S. energy economist Robert McCullough, commissioned by the Peace Valley Landowner Association, said the dam will conservatively cost an additional $2.1 billion and ratepayers will save an initial $116 million a year if the project is scrapped and the same amount of energy is procured from other sources.

An “intelligence memo” from the C.D. Howe Institute, addressed to B.C.’s new government, says the case for the Site C dam is “getting weaker” and any meaningful cost increase above $10.7 billion makes cancellation the best choice.

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It’s the most expensive public infrastructure project in B.C.’s history and yet the future of the Site C dam has never looked so uncertain.

In response to the growing number of questions surrounding the project, The Narwhal is hosting a webinar on Thursday, Nov. 26 from 4-5 p.m. PST. Join us and our panel of guest speakers for a discussion on B.C. reporter Sarah Cox’s recent investigation into the project’s geotechnical problems and escalating budget.

The event will feature a Q&A with our guests, who bring a diverse set of experiences to the panel. Sarah will speak about her blockbuster investigation into the beleagured Site C dam and how she found out top B.C. officials new the project was in trouble a year before the public was informed. Sarah is also the author of Breaching the Peace: the Site C Dam and a Valley’s Stand Against Big Hydro.

The Narwhal has also invited Marc Eliesen, former president and CEO of BC Hydro, who was at the helm of the public utility when its board of directors rejected the project in the 1990s. Marc is also the former chair and CEO of Ontario Hydro and the former chair of Manitoba Hydro.

Judith Sayers will also be bringing her expertise to the panel. Judith is the Nuu-chah-nulth Tribal Council president, a board member of Clean Energy BC and an executive advisory council member of Indigenous Clean Energy.

Finally, attendees will hear from West Moberly First Nations Chief Roland Willson, who also sits on the B.C. First Nations Energy and Mining Council.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

The watchdog B.C. Utilities Commission has sent BC Hydro 70 questions about the troubled Site C dam, asking when geotechnical risks were first identified and when the project’s assurance board was first made aware of potential issues related to the dam’s stability. 

“I think they’ve come to the conclusion — but they don’t say it — that there’s been a cover-up by BC Hydro and by the government of British Columbia,” former BC Hydro CEO Marc Eliesen told The Narwhal. 

On Oct. 21, The Narwhal reported that two top B.C. civil servants, including the senior bureaucrat who prepares Site C dam documents for cabinet, knew in May 2019 that the project faced serious geotechnical problems due to its “weak foundation” and the stability of the dam was “a significant risk.” 

“They [the civil servants] would have reported to their ministers and to the government in general,” said Eliesen, who is among 18 prominent Canadians calling for dam construction to stop until an independent team of experts can determine if the geotechnical problems can be resolved and at what cost.  

“It’s disingenuous for Premier [John] Horgan to try to suggest, ‘Well, I just found out about it recently.’ If that’s the case, he should fire the public servants who are representing the province.” 

The public only found out about significant issues with the Site C dam at the end of July, when BC Hydro released overdue reports saying the project faces unknown cost overruns, schedule delays and such profound geotechnical troubles that its overall health is classified as ‘red,’ meaning it is in serious trouble. 

“The geotechnical challenges have been there all these years.”

The Site C dam is the largest publicly funded infrastructure project in B.C.’s history. If completed, it will flood 128 kilometres of the Peace River and its tributaries, forcing families from their homes and destroying Indigenous gravesites, hundreds of protected archeological sites, some of Canada’s best farmland and habitat for more than 100 species vulnerable to extinction.

Eliesen said geotechnical risks were a key reason BC Hydro’s board of directors rejected the project in the early 1990s, when he was at the helm of BC Hydro.

“The geotechnical challenges have been there all these years,” said Eliesen, who is also the former Chair and CEO of Ontario Hydro, the former Chair of Manitoba Hydro and the former Chair and CEO of the Manitoba Energy Authority.

The B.C. Utilities Commission is an independent watchdog that makes sure ratepayers — including BC Hydro customers — receive safe and reliable energy services “at fair rates.”

The commission’s questions to BC Hydro include 14 about the “foundational enhancements” BC Hydro now says are necessary to shore up the Site C dam, powerhouse and spillways. 

The commission is asking BC Hydro to provide a timeline and overview of all geotechnical engineering studies and monitoring activities for the powerhouse, spillway and dam core areas, and to explain what specific risk management and mitigation practices were put into effect once risks were identified.

The commission also wants to know why construction activities continued on the right bank of the Peace River, where the powerhouse would be located, “after geotechnical risks materialized.” 

It’s asking if geotechnical risks played a role in BC Hydro’s decision in March “to suspend or not resume work” on any components of the generating station and spillways.

The commission also wants BC Hydro to provide an itemized breakdown of a $690 million increase in the main civil works contract — held by Spain’s Acciona S.A. and the South Korean multinational conglomerate Samsung C&T Corp. — and to explain the rationale for awarding a no-bid contract to an unnamed First Nation and if other parties were made aware of that contract. 

Islands in the Peace River, known as the ‘jewels of the Peace’ will be destroyed for fill for the Site C dam or will be submerged underwater by the dam’s reservoir. Photo: Byron Dueck

B.C. Utilities Commission chair and CEO David Morton said it’s not the first time the commission has requested additional information after receiving BC Hydro’s quarterly progress reports on the Site C dam. 

“Our staff reads them to make sure they understand them and if there’s anything in then that’s not clear we go then we do go through this, we call it the IR — information request — process,” Morton said in an interview.

“There are things reported in here that we felt required a little more clarity, and we needed a little more understanding of them, so that’s why we asked the questions.”

The questions were sent to BC Hydro on Oct. 23, the day before the provincial election, but Morton said the commission is extraordinarily busy this year and that’s just a coincidence. 

“Our resources are fairly strained. It would have been nice if it could have been done faster, it would be nice if everything could be done faster.” 

“These questions are not politically motivated,” Morton said. “They’re not political questions. There’s no reason not to issue them when they’re ready.”

The commission has asked BC Hydro to respond by Nov. 19.

Read more: Top B.C. government officials knew Site C dam was in serious trouble over a year ago: FOI docs

Morton said the independent commission’s jurisdiction is limited because the B.C. government removed it from oversight of the project. 

The commission, which would normally determine if a large dam like the Site C project is in the public’s financial interest, first examined BC Hydro’s proposal to build the dam in the early 1980s.

After almost two years of hearings, including testimony under oath, the commission concluded B.C. did not need the electricity. It found the Site C dam would have negative social and environmental impacts and said geothermal power should be investigated to meet future energy needs. 

The project was revived in 2010 by the BC Liberal government, which touted energy from the Site C dam as a potential source of electricity for California and a way to supply B.C.’s future LNG industry with cheap power.

Not willing to countenance another rejection from the utilities commission, the government changed the law, stripping the commission of oversight for the project. The NDP government, which came to power in 2017, chose not to restore that oversight.

“The approval of the project was exempt from our oversight,” Morton said. “We can’t come along and say ‘there’s something we don’t like about what you’re doing, we’re going to stop construction.’ We’re not in that position and that’s not the focus of these questions.” 

But the commission still retains oversight for the cost of construction once the project is complete, Morton said. 

“The cost of construction has to be recovered in [hydro] rates. That means BC Hydro will need our approval to recover their construction cost in rates, and those are not insignificant amounts, more than $10.7 billion, in all likelihood.” 

In order to recover the cost from ratepayers, the commission needs to be satisfied BC Hydro didn’t spend more money than necessary on the project, Morton said. 

“As you can imagine, that’s not a straight forward review to do after the fact, after a 10-year construction project or whatever it ends up being … so we’re using these quarterly reports as an opportunity to try to stay on top of it and to flag any areas where we think there may be areas we need to look into in the future.”

The price tag for the Site C dam was $10.7 billion before BC Hydro’s announcement at the end of July — a leap from $6.6 billion when the project was first announced in 2010 and $8.8 billion when construction began in 2015. 

Eliesen said the utilities commission should have been asking tough questions about the Site C dam far earlier. 

“They’ve been remiss in their due diligence activities … They should have been quicker in raising questions with BC Hydro, rather than allowing BC Hydro to be exceptionally late in submitting their reports.” 

BC Hydro is late in filing another Site C quarterly report, covering the period from April 1 to June 30. 

The quarterly reports provide the B.C. public with rare glimpses of a project that international hydro expert Harvey Elwin described as being more secretive than any hydro project he has encountered in five decades working on large dams around the world, including in China.

Read more: Site C dam secrecy ‘extraordinary’, international hydro construction expert tells court proceeding

Morton said the commission could have ordered regular reporting for the Site C project if it had its previous oversight capability.

“Then we would have had the ability to follow up and ultimately order any delinquent reports to be filed. In this circumstance, they are being filed voluntarily. They can file it as late as they choose. We don’t have any jurisdiction.” 

In addition to the six dozen questions, the commission has also filed confidential questions with BC Hydro. Morton said confidential information could include things such as competitive bid information. “BC Hydro itself may be under a confidentiality agreement not to disclose it.” 

With oversight, the commission would also have been able to drill down into specific project elements,  Morton said. 

“We would have wanted to ensure that the construction followed what was approved. BC Hydro wouldn’t have the ability to make significant changes to the design and nature of the project as they went along.”

BC Hydro has been criticized for changing the design of the Site C dam to an L-shape, which Eliesen said “has never been done anywhere in the world for an earthen dam.” 

Morton said an empowered commission could have opted to hold a public hearing about the design change and engage its own technical consultants, as it did in 2017 when the new NDP government asked it to conduct a fast-tracked review of the project’s economics. 

A recent report by a U.S. energy economist found cancelling the Site C dam project would save BC Hydro customers an initial $116 million a year, with increasing savings growing over time. Photo: Garth Lenz / The Narwhal

The commission’s final report found the dam could cost more than $12 billion, that BC Hydro had a historical pattern of overestimating energy demand and that the same amount of energy could be produced by a suite of renewables, including wind, for $8.8 billion or less. 

The NDP government, under pressure from construction trade unions, opted to continue the project, refusing to disclose key financial information related to its decision. 

When the geotechnical problems were revealed in July, the government announced the appointment of former deputy finance minister Peter Milburn as a special Site C project advisor who will work with BC Hydro and the Site C project assurance board to examine the project and provide the government with independent advice.

Eliesen said BC Hydro and the B.C. government should never have allowed the recent diversion of the Peace River to take place given the tremendous geotechnical challenges the project faces and its unknown cost and schedule for completion. 

“It’s a disgrace and scandalous,” he said. “You can halt the river diversion, but you’ve got another four or five years left in construction of the dam. What are you going to do about all the cement you’ve poured if you’ve got stability problems?”

He said it’s counter-productive to continue with advice “from the same people who have been wrong, wrong, wrong,” without calling in independent global experts to examine the geotechnical problems. 

“If you stop construction, whether it takes three or six months, that’s the time that’s required in order to give yourself a comfort level. But continuing to do what you’ve been doing is not the right course. You should have to sit back.”

Eliesen said it reminded him of the Pete Seeger song Waist Deep in the Big Muddy, which tells the story of a captain ordering his troops to keep slogging through a river because they will soon be on dry ground. After the captain drowns, the troops turn around.

“It’s a reflection of the fact that if you don’t look at what’s new, you just keep on doing what you’ve been doing in the past and that, unfortunately, is what’s happening here in this province with this project.”

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Two top B.C. civil servants, including the senior bureaucrat who prepares Site C dam documents for cabinet, knew in May 2019 that the project faced serious geotechnical problems due to its “weak foundation,” according to documents obtained by The Narwhal.

Energy ministry assistant deputy minister Les MacLaren and deputy finance minister Lori Wanamaker also knew the following month that the over-budget project had almost exhausted its $858 million contingency fund, a likely sign of another cost overrun, according to the documents, which were released under B.C.’s freedom of information act.

Yet British Columbians — the owners of the publicly funded dam on the Peace River — didn’t learn about the project’s escalating troubles for more than a year, until Energy Minister Bruce Ralston held a brief press conference on July 31, the same day BC Hydro released overdue Site C dam reports. 

The belated BC Hydro reports said the Site C dam faces unknown cost overruns, schedule delays and such profound geotechnical troubles that its overall health is now classified as “red” — meaning it is in serious trouble. 

In late January, The Narwhal submitted a freedom of information request to BC Hydro, asking for all Site C project assurance board agendas, minutes, reports and recommendations.

Premier John Horgan created the project assurance board in December 2017 after his government approved the dam and added another $2 billion to the project budget. But the NDP government subsequently refused to release any of the board’s findings or a list of its members. 

Following an appeal to the Office of the Information and Privacy Commissioner after BC Hydro missed a legal deadline for responding, we received 2,247 pages of documents almost seven months after filing the request.

(The Narwhal is releasing the FOI response in its entirety to the public and it can be accessed at the following links: Part 1, Part 2, Part 3, Part 4, Part 5.)

The documents reveal new information about the dam’s geotechnical struggles and raise troubling questions about who in government knew about the project’s climbing costs and deepening geotechnical woes, when they knew it and why the information was not made public.

Key sections of the documents, including information pertaining to rising cost pressures and the severity of key project risks from January 2018 to January 2020, are redacted. 

Even so, the documents paint a picture of a project rife with growing geotechnical issues and risks as well as safety and quality concerns — and facing a rising risk of cost overruns and schedule delays — long before the COVID-19 pandemic shut down much of the province and temporarily scaled back the Site C dam workforce in mid-March. 

On Sept. 1, 2019, for instance, nearly one year before the public learned of significant problems and a soaring price tag for the Site C dam, BC Hydro submitted a weekly status report to the assurance board listing the overall health and cost of the dam’s main civil works as “red,” meaning the civil works — the dam structure, generating station and spillways — were in deep trouble.

 ‘A matter of grave public concern’ 

Harry Swain, who chaired the joint review panel that examined the Site C project for the federal and provincial governments, said it is “anomalous” that project assurance board reports have been kept secret by the B.C. government until now and key information is still being withheld. 

“This project is proceeding in doggone secrecy that just is not at all common in large public projects of any kind,” Swain, a former federal deputy minister, told The Narwhal. 

“This is a matter of grave public concern and we, as taxpayers or ratepayers, are going to wind up paying a heck of a lot of money for it,” said Swain, who was also Canada’s director general for electricity and the country’s first senior advisor for renewable energy.

“It looks like we’re going to lose $10.7 billion on this project. That would take care of the homelessness problem, unequitable incomes, First Nations health and several other things, all at once.” 

In July, when BC Hydro released the overdue reports, the public utility said it didn’t know when the Site C dam — slated for completion in 2024 — will be finished or how much it will cost beyond its current $10.7 billion budget. 

BC Hydro also said it hasn’t figured out how to resolve grave geotechnical issues, which require shoring up the unstable foundation of the earthen dam, powerhouse and spillways. 

Site C project assurance board documents reveal an important meeting took place at the end of May 2019, when the Site C dam technical advisory board — a panel of engineering and construction experts — convened in Fort St. John and Vancouver over a three-day period. 

A list of the meeting attendees is redacted, but the documents show a de-briefing was conducted with BC Hydro executives and project assurance board members on May 31, 2019. 

Premier John Horgan created the Site C project assurance board in December 2017. But the NDP government subsequently refused to release any of the board’s findings or a list of its members. In late January, The Narwhal submitted a freedom of information request to BC Hydro, asking for all Site C project assurance board agendas, minutes, reports and recommendations and received 2,247 pages of documents about seven months later. Photo: Jayce Hawkins / The Narwhal

Stability of the dam ‘a significant risk’ 

The main objective of the three-day meeting was to assess progress and performance on the Site C project, as well as to assess design-related risks. The primary area of focus was the main civil works — the dam structure, powerhouse and spillways — according to the documents. 

The technical advisory board found the stability of the dam is “a significant risk and the hazards associated with the weak foundation have been adequately recognized.” 

“We’re talking about a possible lack of stability under the dam itself,” U.S. energy economist Robert McCullough said in an interview.

“Literally, if we look at some of the academic articles that have been written about this, we could be talking about a dam that’s going to crack or slide in the case of an earthquake,” said McCullough, a former officer for a large hydroelectric facility in Portland, Oregon, who has studied the Site C project extensively. “Since there are earthquakes in this part of the world, this is a very important issue.” 

The Site C project is located in a geographical area filled with faults that can become critically stressed during fracking operations, which are poised to expand significantly in the region to supply gas for the LNG Canada export project. In 2017 and 2018, more than 10,000 earthquakes occurred in the wider area, including one that shook the Site C dam construction site in November 2018, forcing workers to evacuate. 

The advisory board also said the Site C dam’s design — changed to an unconventional L-shape, much to the concern of retired BC Hydro engineer Vern Ruskin — needed to be checked. 

It outlined seven steps for BC Hydro to follow, including calculating “the factor of safety” at the end of construction and again at the end of reservoir filling, and requested an update at its next meeting. 

“They’ve gotten pretty het up over this,” McCullough said. “This is a tone that says ‘you’ve got to do a ton of work right now, and we want to hear back that you’re doing it.’ Some of these things are pretty major.”

B.C. ministers likely aware of escalating problems

According to the documents, the Site C project assurance board has an “oversight function to help ensure that the project is completed on time and on budget, and that risks are appropriately identified, managed and reported on an ongoing basis.” 

Swain said the assurance board, despite its moniker, is not an oversight board. He described it as “pretty much an emanation of BC Hydro, with a few additions.”  

“That is a management board,” he said. “If you’re going to have some kind of oversight or project assurance you want some really independent people. You want to have a few experts — particularly geotechnical ones — who have a lot of experience around the world and have no interest in further employment by BC Hydro. They’re really independent in that sense.”

MacLaren, the long-time assistant deputy energy minister who prepares Site C documents for cabinet and reviews BC Hydro’s quarterly Site C progress reports to the B.C. Utilities Commission, is one of two government representatives on the board. 

The other representative is Wanamaker, who in 2017 challenged the commission’s final findings about the Site C project in a six-page letter to the commission that seemed to suggest the new NDP government was searching for a rationale to continue the project.  

The independent commission found the Site C dam’s final price tag could exceed $12 billion and the same amount of energy could be produced by a suite of renewables, including wind, for $8.8 billion or less. It also found that BC Hydro had a historical pattern of over-forecasting energy demand. 

According to documents on BC Hydro’s website, the project assurance board is at the centre of Site C dam communications among BC Hydro’s board of directors, the energy ministry, and treasury board and/or the finance ministry. 

Swain said it would be “strange” if MacLaren and Wanamaker had failed to inform their ministers — then Energy Minister Michelle Mungall and Finance Minister Carole James — about mounting problems with the Site C project during 2019.

“It strikes me as highly unlikely that the most senior officials in those departments and the ministers would be unaware of the developing difficulties,” Swain said. 

Harry Swain chaired the panel that reviewed the Site C dam on behalf of the provincial and federal governments. He says it’s “highly unlikely” that government the ministers would have been unaware of the escalating construction difficulties at the Site C dam. Photo: Jayce Hawkins / The Narwhal

An ‘egregious’ problem with oversight for Site C and Muskrat Falls dams

For David Vardy, the retired chair of Newfoundland’s public utilities board, the Site C project’s lack of transparency and escalating costs create a sense of déjà-vu.

The failure to disclose the Muskrat Falls dam’s rising costs to ratepayers was a front-and-centre issue in Newfoundland, where the over budget dam on Labrador’s Churchill River will require a bail-out from federal taxpayers to avoid a minimum 50 per cent increase in provincial hydro rates.  

An inquiry into the $12.7 billion Muskrat Falls project examined why the provincial government didn’t cancel the uneconomic project when there was still time. 

The inquiry’s scathing report, released in March, found executives at the Crown corporation responsible for building the dam “frequently took unprincipled steps” to secure approval of the project, while governments were “determined to proceed” through a lens of political bias.

Since the inquiry, the cost of the Muskrat Falls dam has climbed again, to $13.1 billion, and Vardy predicts another $1 billion will be added to the tab before the dam becomes operational at least three years behind schedule.  

“I think there’s an egregious problem with oversight on the two projects,” Vardy said in an interview. “If anything, it almost appears in some respects that Site C oversight is not as good as what we’ve had here.”

Vardy said it would have made “all the difference in the world” if ratepayers in both provinces had been apprised of rising costs earlier. “They [Crown corporations] are in the same camp of misrepresenting their costs to the public and misrepresenting to the public what’s going to happen at the end of the day. It’s bad public policy because you don’t have transparency.” 

The Site C project assurance board documents beg the question of who has been looking out for the public interest in B.C. since the board began meeting in January 2018, using weekly information from BC Hydro to review expenditures and progress on the dam. 

The Muskrat Falls Dam pictured here under construction in April 2018 was the subject of a public inquiry due to the project’s high costs. “If anything, it almost appears in some respects that Site C oversight is not as good as what we’ve had here,” said David Vardy, the former chair of Newfoundland’s public utilities board. Photo: Nalcor Energy

Project assurance board voted to increase SNC Lavalin’s contract 

The assurance board is chaired by John Nunn, the former chief project engineer for the Site C dam and a BC Hydro director since January 2020.

Nunn worked for the Vancouver-based engineering and consulting firm Klohn Crippen Berger, a major donor to the BC Liberal Party.  

Along with embattled engineering giant SNC Lavalin, also a major donor to the BC Liberal Party, Klohn Crippen began to receive direct award Site C contracts after former Premier Gordon Campbell announced in 2010 that the project would proceed to review. (Donations to political parties by corporations and unions were banned in B.C. after the NDP took power in 2017.)

Direct award contracts — which are prohibited by the federal government if they are larger than $25,000, unless they are needed for special justifications such as a national emergency — allow BC Hydro to decide which companies get contracts instead of going through a more transparent and competitive tender process. 

The documents show the BC Hydro board of directors approved the retention of the two firms to design core components of the Site C dam in November 2014, the month before the former BC Liberal government announced the project would proceed. 

Klohn Crippen was given a direct-award Site C contract for $104 million to design essential components of the dam, including the main civil works, generating station and spillways, according to the documents. 

SNC Lavalin received a direct award contract for $131 million, also to design core components of the dam. 

The core components of the dam are now in question due to the lack of solid ground on which to anchor the dam structure, powerhouse and spillways — an issue flagged years ago by both SNC Lavalin and Klohn Crippen as a potential project risk. 

In February 2019, with geotechnical issues an ongoing concern, the project assurance board authorized an “increase” to the Site C engineering design service agreements with Klohn Crippen and SNC Lavalin, the documents disclose.

The amount of the increase is redacted from the documents, which show Nunn abstained from the vote due to his prior working relationship with Klohn Crippen. 

On July 31, well over a year after the assurance board approved additional funds for SNC Lavalin and Klohn Crippen, BC Hydro reported to the B.C. Utilities Commission that “the foundation enhancement costs are expected to be much higher than initially expected.” 

The third-generation Boon family farm sits within the 128 kilometres of river valley that is set to be flooded for the Site C dam. Photo: Garth Lenz / The Narwhal

Assurance board hired ‘independent’ engineer from company represented on board

Also on the Site C project assurance board is Joe Ehasz, the California-based program manager for AECOM Energy & Construction, a company that had received $225,000 in Site C dam contracts by May 2017. 

In August 2019, according to records obtained by The Narwhal through a separate freedom of information request, the company’s subsidiary AECOM Technical Services also received a $132,000 Site C dam contract to provide an “independent construction advisor” for the project.

Board members include three other BC Hydro directors, Concert Properties CEO David Podmore and Lorne Sivertson, an energy consultant and the author of a pro-Site C report for B.C. construction trade unions that was used to discredit the utility commission’s findings.

The documents show MacLaren and Wanamaker were privy to a January 2018 report from the project’s technical advisory board that described construction schedules as “aspirational” and identified geotechnical stability issues as a risk that could further impede progress building the dam.

In a report for the project assurance board one year later, covering the week ending Jan. 25, 2019, BC Hydro points to the most serious geotechnical issue plaguing the project today — the lack of solid ground on which to anchor the dam structure, powerhouse and spillways — as a topic of discussion in a conference call with the project’s technical advisory board.

Site C dam construction on the Peace River. Photo: Garth Lenz / The Narwhal

The design team presented information on the “small amount of movement on a bedding plane” and “the compression of the foundation from powerhouse buttress loading,” the report noted.

The site where the dam is being built contains “bedding planes” between layers of sedimentary shale that have poor shear strength, meaning they could suddenly shift under modest amounts of force. The site, in Swain’s words, is composed of “relatively youthful and unpetrified sediments, some of which appear in the form of weak shales, mudstones, siltstones and some of which appear in the form of clay.” 

“Those sedimentary muds and rocks and clays and whatnot are known to react quite alarmingly either in the presence of a lot of water or a lot of dryness,” Swain said. 

“They swell and shrink. They move around. It’s not the sort of geology that you’d really want to go out and put a multi-million tonne dam on, or even a roller compacted concrete powerhouse.” 

Swain said he was puzzled by BC Hydro’s re-design of the dam to an L-shape after the joint review panel assessed the project.

“I think we’re finally seeing some kind of response to the question of why the heck did they [decide to] build an L-shaped dam when nobody’s ever done that in the world before.” (BC Hydro has pointed to several examples of L-shaped dams around the world, but those dams are not earthfilled like the Site C dam.) 

“The suspicion is that the initial placement of the powerhouse was found to be over an especially weak spot,” Swain said. “By turning it 90 degrees, they thought they would avoid the problem. It appears that they may not have.”

Site C dam’s civil works in serious trouble almost one year before public disclosures  

On Sept. 12, 2019, nearly one year before the public learned of the project’s rising price tag, BC Hydro informed the assurance board that geotechnical risks were “likely,” potentially increasing costs and causing a schedule delay. BC Hydro also warned of the “likely” risk of additional engineering costs. 

The severity and probability of those costs were redacted from the documents, along with contingency cost pressure items. But by Sept. 1, 2019, according to the documents, the entire contingency fund had been spent, with five years of construction still ahead. 

BC Hydro also said there was a “likely” risk that Highway 29 budgets are “based on incomplete designs, with limited construction market data.” To accommodate the Site C dam’s reservoir, about 30 kilometres of the highway in six different sections, including four bridges, will have to be relocated.

Dam spillway costs would increase materially due to design changes and reservoir clearing costs would be higher than allocated for in the budget, the assurance board also learned. The severity, probability and cost of those risks were redacted from the documents.

Nine days later, a Sept. 21, 2019 report from Steve Summy, the AECOM “independent construction advisor” — a position created by the project assurance board — flagged safety, quality, schedule and cost issues on the project’s left bank. 

Key parts of Summy’s conclusions are redacted from the documents. However, Summy zeroed in on the “poor” quality of the finished surface in the river diversion tunnels, recommending a finishing crew begin work as soon as possible. He cautioned against “pressure to accept a substandard product to finish on time” and noted the application of shotcrete — sprayed concrete — in the tunnels was “inconsistent.” 

By Sept. 1, 2019, the Site C dam’s entire contingency fund had been spent, with five years of construction still ahead, according to documents obtained by The Narwhal. Photo: Jayce Hawkins

Six ‘significant’ technical risks identified 

The May 2019 report from the technical advisory board — shared with BC Hydro executives and the project assurance board members on May 31 of that year — identifies six “significant” technical risks. 

They include the “stability of the earthfill dam and tailrace wall,” described as a “significant risk due to the weak foundation” in a 15-page report that recommended seven steps to check the project’s design and calculate the factor of safety. 

A second risk is the right bank foundation, which forms the shorter arm of the radically re-designed L-shaped structure. Structures on the right, or south, bank of the Peace River include the power house, spillways and earthfill dam. 

The technical advisory board noted “the hazards associated with various ground defects affecting stability have been correctly identified” on the south bank “as have risk mitigation efforts based on seepage control and drainage.” 

But a greater effort was required, the board said. Those efforts should include making it a “high priority” to develop a hydrogeological model of the right bank to determine how the bank would respond to reservoir filling, the board said. 

The technical advisory board also flagged the earthfill dam foundation and grouting as a significant risk.  

The stability of slopes and foundation at the dam site could potentially be “decisively” affected by hydrogeological conditions and phenomena, the technical advisory board noted. 

“Simple flushing of a borehole has immediately raised the groundwater levels in an extensive section of the right abutment and has caused displacements on bedding planes. Rainfall has triggered similar effects.”

The Site C dam is being built in an area that contains “bedding planes” between layers of sedimentary shale that have poor shear strength, meaning they could suddenly shift under modest amounts of force. Photo: Jayce Hawkins

For the grout, “options for responses to approaching risks are more limited,” the board noted. “Especially in the right abutment, groundwater levels rising with the lake are capable of jacking open the existing stress relief features and, in this process, not only raising the hydraulic load on the curtain but also, in the worst case, damaging the curtain by hydrojacking.”

As a precaution, the board says grouting could be performed to obtain a “safe pre-stressing of the rock mass against the hazard of hydrojacking.” 

“Such measure has positive precedent but meets with difficulties imposed by the geological and geotechnical conditions prevailing at Site C…” the board noted.

A further risk is the thermal performance of roller compacted concrete and cracking. Cracks in the roller compacted concrete have “been recognized and studies are underway to evaluate their extent and significance,” the board noted.   

“If, ultimately, substantial grouting is necessary to repair such cracks, a complex and costly program could result,” the board said, adding it wished to be kept informed on progress “associated with managing this risk.”

Neither BC Hydro nor the B.C. government are responding to media questions during the provincial election campaign, unless inquiries pertain to health and safety or statutory requirements. 

Calls for independent safety review, cancellation

If completed, the Site C dam will flood 128 kilometres of the Peace River and its tributaries, putting Indigenous burial sites and traditional hunting and trapping grounds, some of Canada’s best farmland and habitat for more than 100 species at risk of extinction under up to 50 metres of water. 

Swain and others — including members of the Peace Valley Landowner Association and residents of the community of Old Fort, downstream from the Site C dam  — are calling for an independent safety review of the project. Swain said the safety review should follow investigations by independent geotechnical engineering experts. 

“I strongly believe that BC Hydro and the government should pause the construction, do that work and then take another decision,” Swain said. 

“That’s entirely aside from the economics of the case which have been abysmal for some time and are getting worse.” 

Forest in the Peace River valley in the Site C dam flood zone. Photo: Garth Lenz / The Narwhal

Two new expert reports, including one written by McCullough, conclude British Columbians will save money if the Site C dam is immediately cancelled by the new provincial government following the Oct. 24 election. 

McCullough’s report, commissioned by the Peace Valley Landowner Association, said the dam will conservatively cost an additional $2.1 billion and ratepayers will save an initial $116 million a year if the project is scrapped and the same amount of energy is procured from other sources. 

An “intelligence memo” from the C.D. Howe Institute, addressed to B.C.’s upcoming new government, says the case for the Site C dam is “getting weaker” and any meaningful cost increase makes cancellation the best choice.

The documents show the Site C project had spent $3.5 billion of its budget by March 31, 2019. The latest figures show $5 billion has been spent. But McCullough, Swain and Vardy all point out the only cost the government should consider is the one to come.

Ralston announced in July that the government has appointed Peter Milburn, a former deputy minister of finance and secretary to the Treasury Board, as a special Site C project advisor who will work with BC Hydro and the Site C project assurance board to examine the project and provide the government with independent advice.

But whether or not Milburn’s findings will be made public remains to be seen. 

McCullough said Milburn’s appointment underscores the problem of “who guards the guards.” 

“Normally, in a construction project, you want as clean a chain of command as possible,” he said. “In this case it would be the premier at the top, then the chairman of the board of BC Hydro and then the engineers at the bottom.” 

But in the case of the Site C dam, McCullough said there’s “a cloud of committees and cross-committees watching each other.” 

McCullough said the Site C dam’s geotechnical challenges call for “the simplest and most direct and most hands-on management, and what we have is a committee of committees.” 

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BC Hydro customers will save an initial $116 million a year if the B.C. government cancels construction of the Site C dam and the savings will only grow over time, according to a new report from U.S. energy economist Robert McCullough.  

McCullough, who provided expert advice on the Site C project to B.C. cabinet in 2017, says stopping the Peace River hydro project now will also avoid significant geotechnical risks that BC Hydro hasn’t been able to resolve. Those risks were only disclosed to British Columbians on July 31. 

Profound geotechnical problems, related to the dam’s faulty foundation, mean BC Hydro does not know how much it will cost to complete the publicly funded project, which is already billions of dollars over budget, or when it might be finished. 

“Site C started on the wrong foot and has stayed on that foot ever since,” McCullough told The Narwhal. 

Unlike other major hydro dams in B.C. and in U.S. west coast states, which were built in narrow rocky canyons, the Site C dam is being constructed on far less reliable shale, noted McCullough, who wrote the report for the Peace Valley Landowner Association, representing landowners who will lose their homes and farmland to the dam’s reservoir.

Arlene Boon harvesting vegetables in her market garden. The Site C dam would flood valuable northern agricultural land in a valley that has some of Canada’s richest soil. Photo: Garth Lenz / The Narwhal

“The banks are unstable and there is substantial tectonic activity in that area. The surface under the structure is shale — which adds significant risk as well,” wrote McCullough, an expert on power projects and former officer for a large hydroelectric facility in Portland, Oregon.

McCullough conservatively estimated it will cost $2.1 billion more to complete the dam, for a total price tag of almost $13 billion. That makes the project uneconomical, he said. 

“The people of B.C. have a giant fiasco on their hands with Site C,” Ken Boon, president of the Peace Valley Landowner Association, told The Narwhal. 

“I think we have to hold the government’s feet to the fire, to put politics and their own special interests aside and just look out for the interests of the public.”

Ken Boon, president of the Peace Valley Landowner Association, in the kitchen of the third generation farmhouse he shares with his wife, Arlene. The Boon’s fields will be flooded by the Site C dam or lost to the relocation of a provincial highway out of the flood zone. Photo: Garth Lenz / The Narwhal

Energy economist asked to answer one question

Boon said new information about the Site C dam’s rising cost and unresolved geotechnical issues prompted the association to ask McCullough to reassess the financial viability of continuing the project.

In December 2017, the NDP government said its top two decision criteria for deciding to proceed with dam construction were the impact on ratepayers and the fiscal impacts and risks.

So the association asked McCullough to answer one question: “Is it in the best interests of British Columbians to immediately cancel or continue construction of Site C?”

The answer, McCullough said in an interview, is unequivocal: even though BC Hydro has spent $5 billion on the dam, the public utility will save money if the project is stopped and energy is procured from other sources. Those sources include wind and solar power, whose costs are dropping all the time. 

McCullough urged the B.C. government not to fall into what economists call the “sunk cost fallacy,” equating it to buying an old car that needs constant, expensive repairs. 

“The explanation about why you have to spend more and more money in keeping it running is that you’ve already spent so much money on it,” McCullough said. “At some point, it’s just cheaper to buy a new car.”

“We’re in this situation of having sunk a huge amount of money into a project that is not panning out — when we could simply close this book, open a new one, have the same amount of energy and far less risk.”

Clearing along the Peace River in preparation for Site C dam construction, July 12, 2018. Photo: Garth Lenz / The Narwhal

McCullough’s report was dovetailed by a C.D. Howe Institute “Intelligence Memo” to “British Columbia’s next government.” The memo says the costs of the Site C dam likely exceeded the cost of alternative “carbon-cost adjusted” natural gas turbines as of January 2019 and the case for the project is “getting weaker.” 

The project’s new geotechnical and operational challenges suggest that “a significant budget increase can be expected,” says the memo, written by A. J. Goulding, president of London Economics International and an advisor to provincially owned hydro companies, and Mugwe Kiragu, a senior consultant at London Economics International who has a wide range of experience in modelling power system costs. 

“Even assuming a conservative estimate of budget increases, the economics still favour cancellation and replacement with an equivalent carbon-cost adjusted CCGT [combined cycled natural gas turbines],” the memo says. It notes that replacement with storage-backed wind capacity “becomes more cost-competitive the longer the project is delayed.” 

The Site C dam is “marginally economic” at current costs, according to the memo. “Our analysis shows that any meaningful cost increase makes cancellation a better choice,” Goulding and Kiragu state.

Site C dam concrete a potential problem

The Site C dam is set to flood 128 kilometres of the Peace River and its tributaries, forcing families from their homes and destroying some of Canada’s best farmland, habitat for more than 100 species at risk of extinction, and Indigenous gravesites and traditional hunting and trapping grounds.

The dam was announced in 2010 as a $6.6 billion project. It was given final approval in 2014 with a $8.7 billion budget and greenlighted in 2017 by the new NDP government with a $10.7 billion budget. 

At a new price tag of $12.8 billion, McCullough calculates power from the Site C dam will cost $94 per megawatt hour to produce. 

The power will most likely be sold to the U.S. for $40 per megawatt hour given B.C.’s significant energy surplus, McCullough said. 

“In this case, BC Hydro loses 57.7 per cent on each megawatt hour produced by Site C.” 

McCullough’s report zeroes in on a number of project risks, including the use of roller compacted concrete in construction, which he described as a “cost effective alternative to traditional construction methods.”

Instead of building the dam with cement that is cast in place, “roller compressed cement more closely resembles a layer cake, with layers being laid down sequentially and compressed,” the report said.

Although the use of roller-compacted concrete is an accepted construction practice, McCullough said a number of articles have questioned the reliability of the concrete if exposed to tectonic shocks, such as the earthquake that shook the Site C dam construction site in November 2018, forcing workers to evacuate. 

The Site C project is located in a wider area known to be filled with faults that can become critically stressed during fracking operations for gas. In 2017 and 2018, more than 10,000 earthquakes occurred in the wider area, where fracking is prevalent and known to be triggering earthquakes. 

The Old Fort road, crumpled by a November 2018 landslide on the notoriously unstable slopes of the Peace River. Photo: Jayce Hawkins / The Narwhal

McCullough said the articles’ authors found a significant risk of sliding or cracking, depending on the nature and preparation of the surface under the roller compacted concrete.

There is also a potential for leaks between the layers.  

“We have added another component to this, which is the surface we’re building this on is itself slippery,” McCullough said.

“The shale is not a solid rocky valley, like we’re looking at with the other major British Columbian dams, but something that can liquify or solidify, depending on geological conditions … we’ve taken a layer cake and put it on top of an uneven and slippery surface.”

‘It doesn’t make sense economically to proceed’

A number of factors make it uneconomical to finish the dam, even though 48 per cent of the project has officially been completed, McCullough said. That number drops to 43 per cent when the currently identified geotechnical problems are addressed, he said, noting there may be even bigger problems that have not yet been publicly disclosed. 

Factors include escalating construction costs, unresolved geotechnical issues and risks with seismic activity, falling costs for wind and solar power, dropping interest rates and “the deterioration of Site C’s ability to compete in energy markets.” 

Boon said the landowners were shocked to discover “how poor the economics of Site C still are.”

“Even if you discount all the money that has been spent already, and moving ahead with the money that has to be spent to complete the project — not including possible massive overruns because of foundation problems — it still doesn’t make sense economically to proceed.”

To write the report, McCullough said he had to comb through numerical data dating back to the beginning of the project because there is “astonishingly little information” publicly available. 

He said it is very strange that BC Hydro hasn’t mentioned what percentage of the project has been completed by particular dates, because that information is part of software used for all major infrastructure projects.

“A decision like this in a U.S. state would have been far more public.” 

Read more: Site C dam secrecy ‘extraordinary’, international hydro construction expert tells court proceeding

Boon said he was encouraged by Horgan’s comment during the Oct. 13 leaders’ debate for the provincial election, when the NDP leader was asked by moderator Shachi Kurl if the Site C project is the NDP’s “dumpster fire,” and if he would cancel the project. (The NDP have repeatedly characterized the BC Liberals’ handling of financially troubled ICBC as a dumpster fire.) 

Horgan told debate viewers he is awaiting the results of a report from Peter Milburn, whom he appointed in July to examine the geotechnical issues and economics of the Site C project.

“When we see that report we’ll make a decision,” Horgan said. “I’m not going to foreclose anything at this point in time.” 

But, pressed by Green Party leader Sonia Furstenau on Thursday during a CKNW leaders’ debate, Horgan refused to commit to cancelling the project if experts determine that it should not go ahead.

“I am disappointed John Horgan is continuing to ignore the evidence and refusing to provide British Columbians with a clear answer about his party’s plan in regards to Site C,” Furstenau said in a news release. 

“To me, it is very clear that the job of elected officials is to listen to experts and make decisions that are in the best interest of all British Columbians, not just your political party.”

Boon said he wants to see Milburn’s entire report when it is complete, not a “polished, condensed version.” 

“Economically, the people of British Columbia have lost a lot of money on the Site C project, no matter what happens moving forward,” Boon said.

“It might seem very bizarre to people to have all this work done and to scrap it, but at the end of the day that’s the only choice we may have economically.” 

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