Prime Minister Justin Trudeau dropped into Newfoundland and Labrador on Wednesday with a multibillion-dollar bailout package designed to beat down the soaring costs of the contentious Muskrat Falls hydroelectric project and avert a feared bankruptcy.

The agreement-in-principle is not yet official, but ahead of a likely election, Trudeau was clear his government was “prepared to commit” to two separate life-preservers totalling $5.2 billion for the struggling province the Liberals nearly swept in 2019’s election.

The bailout is approaching the total cost of overruns at Muskrat Falls, a megaproject that has faced numerous delays and opposition from local Indigenous peoples and environmental groups. Initially, Crown corporation Nalcor Energy expected the project to cost $7.4 billion all-in, but the price has since swelled to $13.1 billion and counting. It was the subject of a multi-year inquiry that found the megaproject was thoroughly, and perhaps criminally, mismanaged. Former premier Dwight Ball referred the inquiry report to the RCMP last year.

The bailout package, billed as “rate mitigation,” includes a $1-billion loan guarantee and a $1-billion “investment” in the Labrador Island Link (LIL). The LIL is a subsea transmission cable that connects Labrador to Newfoundland to allow electricity to flow from the Muskrat Falls hydro project to the island. The billion-dollar investment sits in a fund that can be emptied at a rate of up to $150 million per year.

The second deal has a projected value of $3.2 billion, and will see Canada making payments to the province equal to what it receives from the Hibernia offshore oil platform. The $3.2-billion estimate rests on Hibernia extracting oil off Newfoundland’s coast until 2047, and the price of oil holding to projections over that time.

“These transfers will ensure Newfoundlanders and Labradorians are the beneficiaries of this project, and the province has what it needs to support the people who live and work here,” Trudeau told reporters in St. John’s.

For years, credit rating agency Moody’s has chalked the province’s dire fiscal situation up to cost overruns at Muskrat Falls, and the province’s reliance on volatile oil revenue that limits its ability to pay down growing debt. The financial crisis was sharply revealed in the early months of 2020 when oil prices collapsed, and Ball was forced to write to Ottawa asking for financial help because the province couldn’t even borrow on its own.

Newfoundland and Labrador’s sole Opposition MP welcomed the news, but noted the bulk of the financial relief was coming from money many in the province have long considered rightfully theirs.

“While we appreciate the Liberal government helping to address the problems with Muskrat Falls with some creative restructuring of the debt and waiving fees on loan guarantees, it’s important to note that the majority of the fiscal support comes from the unintended windfall that Canada received from its Hibernia project share after recouping its investment,” said the NDP’s St. John’s East MP Jack Harris in a statement.

Prime Minister Justin Trudeau visited St. John’s to announce his government’s multibillion-dollar bailout package for the Muskrat Falls dam. Photo: Erik Mclean / Unsplash

Meanwhile, the Bloc Quebecois is decidedly against the bailout. It sees the money as an unfair advantage to N.L., because Hydro-Quebec and Nalcor are both Crown corporations with significant hydropower competing for New England markets.

“This is no more and no less a frontal assault on our Crown corporation, which, let us remember, has never received a single penny in any subsidy from the federal government,” said Bloc MP and natural resources critic Mario Simard in a statement, adding “the Muskrat Falls circus must stop.”

“In launching this project, the Newfoundland government made no secret of the fact that its objective was to harm Quebec, bypass Quebec territory and compete with Hydro-Quebec on export markets.

“By announcing such funding, the government of Justin Trudeau is directly attacking Hydro-Quebec, which has been trying for several years to increase its electricity sales in the United States, one of the markets targeted by Muskrat Falls,” the statement also reads.

Hydro-Quebec declined comment.

Innu Nation ‘left out of discussions’

Innu Nation Grand Chief Etienne Rich said he was “disappointed” by Wednesday’s news because the nation wasn’t kept in the loop. He said there was a brief “supper time” call with government officials Tuesday, but that the nation learned of the federal funding announcement through the media.

“I told (the premier) very clearly that we need to be part of these discussions, and we need to know in advance because we’re the only Aboriginal group that has an (impacts and benefits agreement) with Nalcor in regards to Muskrat Falls,” he said.

Premier Andrew Furey told reporters Wednesday his government had provided a technical briefing to the Innu Nation on Tuesday evening.

“I have a great relationship and speak with Indigneous leaders every single week … (and) as they’re briefed, and as we all understand the deal better, I’m sure they will be more happy as the details become more available to them,” he said.

Mercury rising: how the Muskrat Falls dam threatens Inuit way of life

Rich says during the Tuesday evening call, he asked if the nation’s impacts and benefits agreement — which spells out financial, environmental, and other commitments — would be affected by the negotiations with Ottawa and didn’t get a clear answer. He says right now, the nation simply doesn’t know how it might be impacted, and that’s exactly the problem with being left out of discussions.

Furey “promised us if there’re any talks about rate mitigation, that he’d let us know in advance, but here it is yesterday, just a day before the announcement, and we didn’t find out through the premier’s office, we found out through the media. So like I say, he’s a very dishonest person.”

Furey’s office did not immediately return a request for comment.

“Even though Canada and the province gave a technical briefing to the press this afternoon, they still haven’t found time to give Innu Nation any details about the backroom deal they have reached,” the Innu Nation said in a statement.

“Innu Nation was only able to obtain a copy of the technical briefing given to the media by barging into a press briefing to which they had not been invited. And Innu Nation also points out that none of the materials made available to the press by Trudeau or Furey governments even mention the Innu,” the statement also reads.

Outside Confederation Building, where the Muskrat Falls bailout package was announced Wednesday, the Social Justice Co-op protested megaprojects for their harm to the environment and nearby communities.

“Over the past year, we have heard more and more government officials propose a hydrodam at Gull Island as a potential next energy project, wrapped up in grandiose plans of an ‘Atlantic Loop’ to power Canada and the U.S.,” said co-chair Kerri Neil.

“We know how harmful the Churchill Falls, and more recently Muskrat Falls, hydrodams have been to the Grand River and the expansive ecosystem that it nurtures. We cannot allow further destruction of the Grand River for resource extraction, and we refuse to let capitalist governments continue to put profit over people.”

Private equity firm Cresta Fund Management recently bought the 135,000 barrel-per-day oil refinery in Come by Chance, N.L., to produce cleaner fuels, but is also eyeing green hydrogen production, expected to use hydropower from Labrador. The provincial government spent millions helping the refinery find a buyer.

How did it get to a multibillion-dollar bailout?

Even though Muskrat Falls is still experiencing delays, an inquiry was launched in 2017 to study what went wrong, because even by then, it was clear the project had come off the rails.

Justice Richard LeBlanc’s report published last year lays the blame on both Nalcor and a series of provincial governments that failed to hold Nalcor accountable. His detailed report said former CEO Ed Martin — who, before taking the reins at Nalcor, managed Petro-Canada’s interests in Newfoundland and Labrador’s offshore oil industry — led a “fiefdom” and intentionally took advantage of politicians who were in over their heads to push forward an unnecessary project.

A reckoning for Muskrat Falls

“There is no doubt that Nalcor, and in particular Edmund Martin, must be faulted for intentionally failing to disclose to (the Government of Newfoundland and Labrador, or GNL) relevant information on costs, schedule and risk …If GNL had received full disclosure from Nalcor before sanction, it would have been in a position to properly evaluate the project and provide the public with truthful and accurate information,” LeBlanc wrote.

LeBlanc also found that premiers, starting with Danny Williams, were dead set on a project that could compete with Hydro-Quebec, and “leveraged” tensions between N.L. and Quebec to promote Muskrat Falls. Those frustrations largely relate to the 1969 Churchill Falls contract that gave Quebec outsized benefits for a dam in Labrador.

A number of other setbacks plagued the project, from abandoned plans to build a dome over the site to build through Labrador’s cold winters, to problems with the power grid software.

The province’s negotiating team was led by Brendan Paddick, a telecommunications tycoon who chaired Nalcor’s board of directors, and is also a close associate of Furey’s. Furey, Paddick, and Great Big Sea frontman Alan Doyle founded the Dollar A Day Foundation that funds charities. The federal team was steered by Serge Dupont, a longtime insider who previously was a deputy minister for Natural Resources Canada when N.L. was in the early days of negotiating Muskrat Falls.

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Opposing a large hydro dam can be a lonely experience.

Just ask Roberta Frampton Benefiel, a long-time resident of the Labrador community of Happy Valley-Goose Bay, 36 kilometres from the boondoggle Muskrat Falls dam now nearing completion. 

As a member of the Labrador Land Protectors, which brings together both Indigenous and non-Indigenous people, Benefiel now faces the possibility of yet another megadam on the Churchill River. If the proposed Gull Island dam is built, the Churchill “won’t be a river anymore,” she said in an interview with The Narwhal.

Mercury rising: how the Muskrat Falls dam threatens Inuit way of life

Yet when reached on the phone last week, Benefiel sounded positive — even optimistic — about the future of a growing global movement to stop the construction of destructive hydro dams. 

She had just returned from a three-day conference in Winnipeg organized by Wa Ni Ska Tan (a word that means “rise up” or “wake up” in Cree) to discuss the devastating impacts of large hydro projects across Canada and around the world. 

The sold-out conference brought together about 300 people, many from communities impacted by projects like the Site C dam under construction in northeastern B.C., the Keeyask dam under construction in northern Manitoba and dams in the global south in countries including India, Panama, Brazil and Colombia.

Roberta Benefiel of the Labrador Land Protectors at the Muskrat Falls Public Inquiry in St. John’s, NL on Wednesday, March 27, 2019. Photo: Paul Daly / The Narwhal

“This was really where, as a riverkeeper in Canada fighting a dam, we needed to be,” said Benefiel, who is also a member of Grand Riverkeeper Labrador, a non-profit organization dedicated to protecting the Churchill River and its estuaries. 

“Because we’re so far away and because we were just one Canadian dam group it just didn’t seem to work as well as it does with this Wa Ni Ska Tan group. Connecting with all the Canadian-affected communities was so important.”

Senator Mary Jane McCallum, who has advocated for the rights of hydro-impacted communities in Manitoba, said in a keynote address to the conference that she wants to launch a special investigation into the impacts of large Canadian hydro dams on Indigenous communities.

“You represent hope because you speak it and you walk it,” the senator told the crowd. “You’re intelligent, focused, witty and know when to break out into tears or laughter. That’s all good medicine. You are role models to me and I will carry this weekend to Senate with me to let me know that I’m not alone. And neither are you.”

Mary Jane McCallum speaking at the conference. Photo: Wa Ni Ska Tan

Social and environmental impacts of dams felt globally

Such an experience was precisely what the conference’s organizers had hoped to foster. 

In a post-conference call with The Narwhal, Wa Ni Ska Tan’s Ramona Neckoway and Stephane McLachlan said the three packed days of panel discussions and strategizing helped combine isolated struggles into a powerful international network. 

Neckoway, who is from the hydro-impacted community of Nisichawayasihk Cree Nation in northern Manitoba, said photos of eastern Himalayan dams shown at the conference by political ecologist Deepa Joshi “are so familiar to me in terms of what we see, even though it was halfway around the world.” 

McLachlan, coordinator of the University of Manitoba’s Environmental Conservation Lab, recalled other moments such as when a band councillor from Tataskweyak Cree Nation in northern Manitoba asked to get 50 copies of a strategy handout from a Brazilian dam opponent. In another instance, a fisherman from South Indian Lake showed a delegate from Panama a map of all the projects that Manitoba Hydro International (a controversial consulting subsidiary of the Crown corporation) has led in the Central American country.

Each instance represented a sharing of knowledge and experience among people who may have never met outside the conference, Neckoway and McLachlan noted. 

On the last day of the conference Panamanian Jonathan González Quiel released a statement saying connecting with other hydro-impacted individuals and communities is critical. 

“We used to be just a group of different rivers, but now we have converged to create a big ocean.”

‘That’s not consultation. That’s bullying’

It wasn’t all hopeful, however, with many moments of sorrow and frustration expressed throughout the conference. 

The opening panel featured Indigenous people whose communities have been negatively affected by the Site C, Muskrat Falls and Keeyask dams. 

Connie Greyeyes of Fort St. John, B.C., said resource projects, including the Site C dam, have increased the price of basic needs such as housing and food while the creation of man camps has compromised the safety of Indigenous women and girls. 

Denise Cole of the Labrador Land Protectors spoke about the potential collapse of infrastructure for the Muskrat Falls dam that could flood the homes of 1,000 people, as well as the impending methylmercury contamination of fish, a traditional food source for local Indigenous people.

A reckoning for Muskrat Falls

Members of Manitoba’s Tataskweyak Cree Nation talked about how their water has become dirty and contaminated since the advent of dam construction, which they said has brought with it significant social disorder, the abuse of drugs and alcohol, racial discrimination and the destruction of ancestral practices of hunting, trapping, fishing, and gathering. Burial sites, artifacts, and ancient trails have all been lost.

Robert Spence, a band councillor for the nation, broke down in tears while describing some of the impacts of the Keeyask dam and other large hydro projects. 

“The water was supposed to be the answer to all of our people’s prayers,” he said to the room. “Whenever I hear the word ‘development’ I cringe. To me, it’s such a dirty word.”

Consultation and partnership agreements among the Crown corporations building the dams and impacted First Nations were also deeply criticized at the conference, with some dismissing these elements of the process as the equivalent of blackmail. 

Spence described the effort to consult Indigenous communities and come to an agreement around benefits sharing as “a piggybank for lawyers and consultants.”

Cole added the reliance on consultation with a small number of “established leadership” can lead to project managers and bureaucrats ignoring community members.

Connie Greyeyes, pictured far left, said consultation around large-scale hydro projects can feel like bullying. Denise Cole, second from left, from the Labrador Land Protectors warned of a rise in methylmercury in the Muskrat Falls reservoir. Moderating the panel is The Narwhal’s B.C. legislative reporter Sarah Cox, pictured far right. Cox is the author of Breaching the Peace: The Site C Dam and a Valley’s Stand against Big Hydro. Photo: Wa Ni Ska Tan

“Our idea of consultation means that we have a meaningful consultation and come to an agreement that fits for everyone,” Greyeyes said. 

“Not ‘here’s what we’re going to do, you’re going to like it and accept it and take this amount of money or you’re not going to get anything at all.’ ”

“That’s not consultation. That’s bullying. That’s the way it is.”

Two Treaty 8 First Nations in British Columbia — West Moberly First Nations and Prophet River First Nation — have filed civil actions alleging that the Site C dam, along with two previous dams on the Peace River, constitutes an unjustifiable infringement of their treaty rights. 

A third Treaty 8 First Nation, Blueberry River First Nations, has launched legal action on the grounds that the cumulative impacts of industrial development in its traditional territory, including the Site C dam, infringes its treaty rights. 

Hydro in global south comes with high costs, privatization, displacement

International activists brought stories of similar destruction and dispossession.

Deepa Joshi of Coventry University in the United Kingdom condemned the framing of hydroelectric power as a “climate solution” given its immense social and environmental impacts and greenhouse gas emissions from reservoirs. 

She attributed the expansion of the “green economy agenda” in the global south to the post-2008 recession and desire for investors to find new profitable markets. That shift, Joshi said, was enabled in countries like India by reforms that made dam-building less financially risky and more profitable. 

Latin American attendees of the conference also tied recent dam-building sprees to shifts in global political economy, with Elisa Estronioli of the Brazilian Movement of Communities Affected by Dams noting that Brazilians pay exceedingly high rates for electricity because the sector has been privatized. 

Many hydro-affected communities in northern Manitoba also pay very high costs for power despite being most impacted by its development.

Manitoba’s hydro mess points to Canada’s larger problem with megadams

Quiel said the same corporations are building and financing these “projects of death” in Honduras, Nicaragua, Costa Rica, and Panama: “We have to expose and visualize who this enemy is that’s threatening our region,” he said through a translator.

KJ Joy of the India-based Society for Promoting Participative Ecosystem Management said a conservative estimate of people displaced in India due to development projects over the last half-century is 40 to 50 million, with hydropower projects one of the biggest factors in displacement.

The Report of the World Commission on Dams, published in 2000, estimated that between 40 to 80 million people have been displaced globally by large dams, including between 26 and 58 million in India and China between the years 1950 and 1990. China’s Three Gorges Dam, completed in 2006, displaced an estimated 1.2 million people and flooded 13 cities.

On a much smaller scale, the forced displacement of people is also occurring in B.C. with the construction of the Site C dam. The global human rights group Amnesty International says the Site C project does not meet international standards for forced evictions. 

Costs of damages from Manitoba Hydro ‘incalculable,’ organizers say

As with any event of such a scale, there wasn’t one specific takeaway or solution that conclusively set the way forward. 

But many ideas emerged from a brainstorming session on the last day: class-action lawsuits against Crown corporations, engaging youth in hydro-impacted communities and helping them remember what life was like before the dams, improving public awareness with outreach and education campaigns, funding solar and wind power projects and introducing a moratorium on all new large dam projects while working to decommission existing ones.

Wa Ni Ska Tan organizers said the group will continue to strengthen international alliances, host more gatherings, and potentially work with McCallum on a special investigation into the impacts of large Canadian hydro projects on Indigenous communities. 

Benefiel said one of the biggest issues her group faces in drawing public attention to the impacts of Muskrat Falls is a lack of funding, especially compared to publicly funded Crown corporations that don’t have to raise money for TV ads, media relations or lawsuits.

An ‘invoice’ tallying the costs of hydro development in the province of Manitoba as ‘incalculable’ is delivered to Manitoba Hydro. Photo: Wa Ni Ska Tan

“They can outdo us in the media, they can out-fund us,” she said. “We really need to pull together and show a very strong resistance across the country in order to provide that glue that would pull in some funding for us to do these things.” 

That strong resistance was on full display at the end of the conference: a march through the freezing cold to the Manitoba Hydro building with banners, signs and chants led by Indigenous people from across Canada. 

There, conference participants delivered an invoice to the Crown corporation for a litany of hydro-caused damages: destruction of waterways, a decline in fish populations, methylmercury contamination and loss of culture among them. 

The total cost listed at the bottom of the invoice? 

“Incalculable: too great to be calculated or estimated.” 

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.

This is part two of a three-part, reader-funded series on the Muskrat Falls dam inquiry.

Marjorie Flowers grew up in the Labrador community of Rigolet on the shores of Lake Melville, eating nutrient-rich Inuit foods like brook trout and seal. Traditional foods still form the backbone of her extended family’s diet, as they do for thousands of Inuit who hunt seal each April and catch salmon in June.

Even if Flowers wanted to buy all her food from local grocery stores, “the price of food here in Goose Bay is just outrageous,” she said. “We’re paying $30 for a small chicken.” A medium-sized cabbage costs $4 or $5, while a package of cheddar cheese fetches $18.

“Half the people here can’t afford to buy from the stores,” Flowers told The Narwhal. “We’ve depended on that food for decades and centuries as a way of life.”

But this spring will be the last that Flowers and her daughter, who is five months pregnant, consume country food from the Lake Melville area without fear of health impacts from methylmercury, a neurotoxin so dangerous the World Health Organization ranks it among the top ten chemicals of public health concern.

In the next year, when the Muskrat Falls hydro dam on Labrador’s lower Churchill River floods an area twice the size of the city of Victoria, methylmercury will immediately start to contaminate the food chain as microbes feed on inorganic carbon stored in flooded soils and vegetation, setting off a sequence of events.

Methylmercury impacts of hydro dams

“It’s widely known that hydroelectric development has a methylmercury impact,” said Ryan Calder, a Duke University postdoctoral associate and expert on the methylmercury impacts of hydroelectric development. “That is beyond question at this point.”

When large hydro dams flood river valleys and forests, microbes convert inorganic mercury — found in soils worldwide in greatly increased levels due to coal-fired power plants and other industrial activities — into methylmercury, the type of mercury of greatest concern for human health.

Most human exposure to methylmercury comes from eating fish, although marine mammals like seals and other traditional foods can also carry high levels.

“This is what our body consists of — our cellular make-up is fish and seals and the wild birds that come into the rivers,” Flowers said.

Dane Shiwak, 8, removes his gloves to absorb the warmth from the breast of a ptarmigan that he shot with his father Martin while on the land in Rigolet in northern Labrador. Martin Shiwak, an experienced Inuit trapper and hunter, tries to impress upon his children the importance of understanding how to live off the land on Labrador’s rugged northern coast. Photo: Darren Calabrese

“It’s all the other seafood and wildlife, too, that we depend on in Lake Melville. It’s the smelts, it’s the trout, it’s the shellfish, it’s all the fur-bearing animals in the area that depend on the seafood. And the seals in the spring. Right now, it’s spring hunting for seals. It’s not an industrial seal hunt here, it’s for sustenance.”

Mercury impacts extend far beyond area considered in environmental assessment: Harvard study

Lake Melville, a brackish subarctic estuary downstream from the Muskrat Falls dam, was not included in an environmental assessment conducted by Nalcor, the province’s publicly owned energy corporation.

Nalcor said it did not study Lake Melville — designated an “ecologically and biologically significant area” by the Canadian Science Advisory Secretariat — because it predicted that the Muskrat Falls dam would have no measurable impacts on the estuary, a traditional Inuit hunting and fishing ground.  

But that decision didn’t sit well with Flowers and other Inuit.

In 2014, the Nunatsiavut government, which represents the Inuit Land Claims Area, commissioned a scientific study of the impacts of methylmercury from the Muskrat Falls dam. Calder, a civil engineer and PhD student at Harvard University’s School of Public Health at the time, was one of a half-dozen American and Canadian scientists who worked on the peer-reviewed research project, led by Harvard.

There was no reason for Nalcor to cut off the Muskrat Falls dam environmental assessment study area at the boundary of Lake Melville, Calder told The Narwhal.

“There’s no scientific basis to say that there’s no impacts. There’s all kinds of data from Quebec and Brazil that show that in many cases downstream impacts are greater than from reservoirs … the methylmercury comes from the bottom of the reservoir and what comes out of the dam is disproportionately the methylmercury-rich bottom waters.”

“A lot of data from Quebec over the past 40 years has shown very clearly that when you dam a river over the next few years the mercury levels in the fish increase.”

A Harvard-based study found methymercury impacts extend far beyond the region assessed in Nalcor’s environmental assessment. Source: Nunatsiavut Government / Harvard. Map: Dezine Studio / The Narwhal

From Minimata to Grassy Narrows: the rise of methylmercury contamination

Methylmercury surfaced as a global concern in the 1950s, when four people from the Japanese coastal city of Minamata were admitted to hospital with mysterious neurological diseases characterized by general muscle weakness and damage to hearing, speech and vision.

Eventually 900 people in Minamata died and several thousand more were afflicted with serious and, in many cases, permanent symptoms that also included kidney, lung and skin ailments.

The culprit turned out to be methylmercury in waste water discharge from a chemical plant. The mercury had quickly travelled up the food chain as Minamata residents consumed their traditional diet rich in local fish and shellfish.

Two decades later, methylmercury contamination made headlines in Canada when residents of the Grassy Narrows First Nation in northern Ontario were poisoned after eating fish from the English-Wabagoon river system, tainted by a mill that dumped industrial effluent containing methylmercury into the water.

Residents of Grassy Narrows still suffer from a host of chronic health problems, including language and speech disorders and vision troubles.

The Muskrat Falls study experimentally flooded soils from the future reservoir area, showing a spike in methylmercury concentrations within 72 hours, and a 14-fold increase in methylmercury concentrations within 120 hours, with elevated levels expected to last decades.

Inuit reliance on traditional foods

The study found that human exposure to methylmercury could increase by up to 1,500 per cent because of the Muskrat Falls dam. Locally caught wildlife represents a large fraction of food consumed by Inuit living around Lake Melville, constituting 70 per cent of their future exposure to mercury, according to the study, which noted that country foods are at the heart of Inuit health, well-being and culture.

Those country foods carry significant nutritional benefits, according to researchers. On days that country food is consumed Inuit diets have significantly less fat, carbohydrates and sugar and more protein and essential micronutrients such as vitamins, riboflavin and iron.

Because environmental systems are hugely complex, no one really knows what the impact will be until impoundment, Calder said, so scientists used environmental models to characterize the likely range of impacts on both the environment and human health.

They developed estimates for the impact the Muskrat Falls dam would have on methylmercury levels in the river and Lake Melville and connected those estimates with a dietary study to understand impacts on human exposures. Then they assessed those increases in the context of the health benefits of eating foods like fish.

“On the one hand methylmercury is bad. You don’t want to increase exposure to methylmercury. But, on the other hand, fish and seal and other nutritional foods are very nutritious,” Calder said.

“We didn’t find anything to suggest that people are going to drop dead or face acute medical distress as a result of the increases. Grassy Narrows is a whole other magnitude of risk.”

Among other predicted outcomes for Muskrat Falls, researchers found “some risk of delayed neurodevelopment of children born to mothers with elevated exposures.” IQs in the next generation would be reduced, “fractions of an IQ point, on average,” according to Calder.

Increased exposures to methylmercury could also lead to a higher risk of heart disease and other health impacts, Calder said.

Derrick Pottle, an experienced Inuk trapper and hunter whose diet is 95 per cent sourced locally, carries sealskin boots and a caribou jacket from the loft of his shed while preparing for a hunting trip in Rigolet. Pottle’s diet of wild game, salmon, berries, trout and seal would have been similar to his ancestors living in Hamilton Inlet roughly 8,000 years ago. Photo: Darren Calabrese

Canada’s guidelines for human consumption of methylmercury are weaker than those in the U.S.

Under the Canadian guidelines, the Harvard study found that more than 200 Inuit will potentially exceed health guidelines for methylmercury ingestion if the future reservoir area is partly cleared of trees and brush. Under U.S. guidelines, that number rises to more than 400 individuals under a high methylmercury scenario.

Calder’s modelling drilled down into questions like whether or not eating less trout would be a good decision or a bad decision given the health benefits of consuming it and the alternative foods available. One of those alternative foods is Atlantic salmon, which will have much lower mercury levels because they spend most of their life at sea.

Calder said there is room within the traditional diet to adapt and eat more species that are lower in mercury to counterbalance mercury increases in other food such as seal.  

“We shouldn’t tell people to be afraid of local food … If you’re worried about mercury and instead of eating trout you eat Doritos, that’s not a health protective response. You’re better off eating more mercury.”

‘A way of life that has existed for centuries’

But that’s of little solace to Flowers, who says she is “not comfortable” at the thought of her pregnant daughter and future grandchild eating traditional foods tainted with methylmercury. She views the Muskrat Falls dam as one more serious threat to the long-term survival of Inuit culture, with its deep connection to the land.

“It infuriates me,” said Flowers. “It really does make me so mad that there’s a group of people, most of them Aboriginal, that have concerns about a way of life that has existed for centuries. And we can’t even be heard. We’re frustrated beyond frustrated.”

In an attempt to draw attention to the impacts of the Muskrat Falls dam, Flowers and 60 others, including Indigenous elders, have blocked the gates to the project and engaged in other acts of civil disobedience. Flowers said she’s been arrested so many times that she’s lost track of the charges against her, which include extortion.

In 2017, Flowers refused to sign a document saying she would stay away from the Muskrat Falls gates where protests were taking place.

” … all I’m doing is standing up for the rights of my people and a way of life that originated here first.”

“That’s when they incarcerated me. The took me to a jail cell down here in Goose Bay and then half an hour later I was on a flight to St. John’s and put in [Her Majesty’s] men’s penitentiary for 10 days.”

After Flowers was flown back to Labrador, she was placed under house arrest for 29 more days.  

“I’m the one being punished and being made to look like an irrational bad person when all I’m doing is standing up for the rights of my people and a way of life that originated here first,” she said.

“We were the first people here. And now we’re being trampled on and silenced by this colonial system that we can’t win against.”

Escalating protests led the Newfoundland government to strike an independent expert advisory committee to review science and traditional knowledge and examine ways to reduce methylmercury contamination from the Muskrat Falls dam.

While Nalcor accepted the committee’s recommendations about aquatic program monitoring and methylmercury modelling and acted on them, at least in part, it has ignored other important recommendations, according to Rodd Laing, director of environment for the Nunatsiavut government.

Those include a recommendation that Nalcor undertake targeted removal of soil — the most immediate contributor to a spike in methylmercury — and capping of wetlands prior to flooding in order to minimize contamination of local food sources.

Nalcor has also ignored three out of four recommendations made by the Nunatsiavut government as part of its Make Muskrat Right campaign, including to clear all trees, vegetation and soil from the future reservoir area.

Removing soil and clearing all the trees and brush would add to the cost of the hugely over-budget $12.7 billion project, now the focus of a two-year provincial inquiry.

Chief financial officer Derrick Sturge of Nalcor Energy leaves the Muskrat Falls inquiry in St. John’s, N.L., on March 27, 2019. Photo: Paul Daly / The Narwhal

“There’s also a huge cost to Indigenous peoples if the level of mitigation is not appropriate for this project,” Laing said in an interview.

“Based on the science and the modelling that’s been done, this it the one chance you have to mitigate the impounding of the reservoir. As soon as you put water on that you’ve lost the opportunity to mitigate any of these methylmercury impacts.”

Nalcor has already started to bring up the reservoir level, aiming for the full 39-metre height later this year — about the size of a 13-storey building — and for full power next year.

“The methylmercury is accumulating as we speak,” Flowers said.

In a statement emailed to The Narwhal, Nalcor said it has put many resources into understanding changes in methylmercury levels “and we remain committed to continuing this in the future to ensure the health and safety of those living in the Muskrat Falls project area.”   

Nalcor said its methylmercury monitoring plan will track changes in methylmercury concentrations in water and sediment at 11 locations along the lower Churchill River, from Grizzle Rapids to Rigolet, following increases in the water levels with the creation of the Muskrat Falls reservoir.

To date, concentrations of methylmercury measured have “generally remained low,” Nalcor said, noting “a couple of slight increases in methylmercury” that do not pertain to the downstream area around Goose Bay and Lake Melville.

“Based on all of the information and data collected to date, the increase in methylmercury in fish predicted would result in an extremely low chance of risk to human health from eating fish from Goose Bay or Lake Melville at peak levels following raising the water levels to full height,” Nalcor stated.

“Based on these predictions, local residents would continue their land and resource use, including consuming a healthy, traditional diet.”

That statement is echoed by BC Hydro, which says people will be able to continue consuming bull trout and other fish species once the Site C dam floods 128 kilometres of the Peace River and its tributaries, putting them under up to 15 stories of water.

“. . . fish mercury levels in the reservoir will increase for a time, but the increase is predicted to be sufficiently low that it will not create risks to fish, wildlife or human health,” says a 2018 BC Hydro fact sheet on Site C and methylmercury, which points out that fish will be tested for methylmercury contamination after flooding.

BC Hydro bases its findings on a 2012 study of methylmercury it commissioned. There has been no independent review of Site C’s methylmercury impacts on human health and the environment.

The Muskrat Falls dam under construction in April 2018. Photo: Nalcor Energy

‘Time wasted’

Memorial University scientist Trevor Bell called the lack of action to reduce the impacts of Muskrat Falls mercury contamination “time wasted.”

“Nothing has really happened since the fall of 2017,” said Bell, a member of the science advisory committee that formed part of the independent expert advisory committee.

“One of the things the engineers have said is that, in order to [carry out] some of the recommendations of the advisory committee, time is a critical issue. The government has let time drain away to some degree.”

Bell said the “wait and see” approach to see if methylmercury levels are elevated above safe guidelines isn’t good enough, given that available science suggests there will be a health impact on Inuit living downstream of Muskrat Falls.

“Here we should be doing everything we can to limit increased methylmercury in the system,” Bell said in an interview. That includes reducing the amount of soil with organic carbon in the system and covering up wetlands where organic carbon may be exposed to flooded water, he said.

The Inuit community of Rigolet. Photo:Darren Calabrese

Failing to take every measure possible to limit mercury contamination of traditional Indigenous food sources in Nunatsiavut results in a “morally unacceptable harm” imposed without adequate consideration of Inuit human rights, Bell said.

“It affects Indigenous rights to basically impose food advisories on them because of elevated methylmercury.”

These rights are protected by the Labrador Inuit Lands Claims Agreement, the Canadian Constitution and the UN Declaration on the Rights of Indigenous Peoples.

In February, Flowers testified at the Muskrat Falls dam inquiry, telling commissioner Richard LeBlanc that she had listened to plenty of testimony about the project being over-budget and behind schedule and that she didn’t really care about those things.

“Because more fundamentally — to me, as a human being, as an Indigenous woman, as a person who occupies this land, whose ancestors occupied this land for centuries — we’re the ones who will face annihilation as far as I’m concerned,” Flowers told the inquiry, which seeks to determine why the Muskrat Falls dam proceeded.

“And this is one step in that direction. If you’re taking away my food source, what else are you going to take next?  

Flowers said in an interview that there are “really no words” to describe how she feels about the impending contamination of Inuit country foods with methylmercury.

“I feel very passionate about continuing to spread the message. I feel so angry that we’re ignored.”

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.

This is part one of a three-part, reader-funded series on the Muskrat Falls dam inquiry.

When Madonna Summers leaves a “Kettle is On” lunch for seniors at the MacMorran community centre in St. John’s, N.L., she pulls down her white hat and wraps a crocheted azure scarf around her neck.

It’s not just the outside chill, at the close of a harsh and windy winter, for which Summers prepares as she fastens her black winter coat and steps out of the cheery clapboard building on Brother McSheffrey Lane.

Her long-time family home is only a short stroll away on Ridge Road and it’s not very warm. Summers has turned off the baseboard heat in all but three rooms, wedged blankets across the bottom of doors and rolled tape along wooden window frames to keep out the draft. But her last monthly hydro bill was still $244.

“I can’t have the heat up the way I want it,” Summers, 70, tells The Narwhal. “I even wear a sweater to bed over my nightdress and I’ve got a lot of blankets on my bed.” If the hydro bill climbs any higher she says, “I’d have to cut back on groceries.”

Her friend, Teresa Boland, lives in nearby subsidized housing and pays a percentage of her heating bills. Yet Boland is still so worried about covering her share of hydro costs that she and her husband only keep the heat on in their kitchen, living room and hallway. Boland has to wrap a blanket around her legs when using the computer and her basement is “like a freezer,” she says.

“I’m so used to being cold now,” Boland says in an interview at the community centre, where she has just finished volunteering at the free Friday lunch and is wrapped in a chocolate brown fleece coat as she prepares to leave the dining hall. “My husband is always cold — he’s not well.”   

It’s a scenario becoming all too familiar to Kelly Heisz, executive director of the Seniors Resource Centre of Newfoundland and Labrador, which receives frequent calls from elderly people worried about balancing rising hydro bills with other household expenses.

“Some of them choose to turn the heat off during the day and go somewhere warm, whether it be a mall or community centre or someplace where they don’t have to spend the day in a cold house,” Heisz says.

“This winter was particularly cold and windy. Really cold. In homes that are not insulated so well the wind will whip right through your house.”

‘It was a gamble and it’s gone against us’

Boland and Summers have heard about the Muskrat Falls hydro dam but they don’t know much about the provincial inquiry taking place five kilometres away, on the third floor of a five-storey office building named after the Beothuk, Newfoundland’s Indigenous people who were driven to extinction in the 1800s.

The inquiry seeks to determine why the provincial government approved construction of the ill-conceived dam on Labrador’s lower Churchill River, which is nearing completion almost three years behind schedule and more than $6 billion over budget.

To pay for the $12.7 billion Muskrat Falls dam and its copious transmission lines, Newfoundland hydro rates are poised to jump by 50 per cent — in the best-case scenario, according to David Vardy, a Newfoundland economist and former head of the province’s public utilities board.

That rate hike would leave Summers holding a $366 bill for one month of winter hydro, a disquieting amount for the diabetic senior. Summers, who doesn’t stay home much during the day, says she has already turned down her thermostat “as low as it can go.”

With so much at stake, the “Commission of Inquiry Respecting the Muskrat Falls Project” is digging into why construction of the dam was approved in 2012 and why the provincial government didn’t shelve the project amidst early warning signs of its unaffordable price tag.

Led by Justice Richard LeBlanc, the two-year inquiry has a budget of $33.7 million and four detailed terms of reference from Newfoundland’s Liberal government, which inherited the partially constructed Muskrat Falls dam when it came to power in late 2015.

Among other questions, the inquiry will determine if Newfoundland’s government “employed appropriate measures to oversee” the Muskrat Falls project built by Nalcor Energy, the province’s publicly owned energy corporation.

It’s also looking into whether the government “was fully informed and was made aware of any risks or problems associated with the project, so that it had sufficient and accurate information” on which to base decisions.

Judge Richard LeBlanc, commissioner for the Muskrat Falls public inquiry in St. John’s, N.L., talks with a sheriff before he enters the room on March 27, 2019. Photo: Paul Daly / The Narwhal

Ultimately, the inquiry will determine which politicians, Nalcor officials, senior bureaucrats and contractors — companies that include the embattled SNC-Lavalin — were aware of heightened project risks and costs, when they knew about them, and why that information was withheld from the public, the de facto owners of the dam.

“We’ve spent so much money and compromised so many future generations.”

Even Nalcor’s current CEO Stan Marshall calls Muskrat Falls a “boondoggle” and says the dam should never have been built. “It was a gamble and it’s gone against us,” Marshall told reporters in 2016. “Muskrat Falls was not the right choice for the power needs of this province.”

LeBlanc can’t recommend criminal charges or judge professional misconduct. But his final report, due before the end of the year, is expected to point fingers at those responsible for building a project that current premier Dwight Ball describes as “the biggest economic mistake in Newfoundland and Labrador’s history.”

That could lead to charges against politicians and senior civil servants and disciplinary hearings for members of professional organizations, such as accountants and engineers.

“The best outcome would be to put a whole bunch of people in jail,” says Vardy, solemn and bespeckled. “We’ve spent so much money and compromised so many future generations.”

‘Naysayers and cranks’

On an overcast day at the tail end of March, Vardy arrives at the inquiry wearing a Greek fisherman’s hat and a knotted scarf. He nods hello to two sheriffs wearing regulation bullet proof vests and steps through a metal detector to the hearing room, where he has been a constant presence since the inquiry began hearing testimony last September.

Vardy is one of the “Three Muskrateers,” as family members call them — a trio of reputable St. John’s residents who sounded the alarm years ago about Muskrat Falls and were largely ignored.

“This was renewable energy, this was motherhood and apple pie,” says Vardy, who also served as the province’s deputy fisheries minister and its top civil servant.

“It’s only when you get into the details that it looks awful.”

The trio predicted the Muskrat Falls dam would cost $13 billion, not $6.2 billion. That’s in keeping with an Oxford university study that found the vast majority of large hydro dams are significantly over budget and uneconomical.

They also raised red flags about the project’s lack of transparency, especially given that it was almost impossible to get any detailed information about risks and rising costs. (The same holds true for the Site C dam currently under construction on B.C.’s Peace River, a project described by international hydro expert Harvey Elwin as unprecedented to him in its secrecy.)

“Nobody wanted to hear the other side of the story,” recalls Ron Penney, a lawyer and Newfoundland’s former deputy justice minister, former deputy health minister and former deputy minister of public works and services. “We were thought of as a bunch of naysayers and cranks.”

Along with Des Sullivan, a St. John’s businessman who was a former senior advisor to two Newfoundland premiers, Vardy and Penney formed the Muskrat Falls Concerned Citizens Coalition. The coalition — which goes by the slogan “seeking truth and demanding accountability” — was granted full standing at the inquiry.

Left to right: Vocal critics of the Muskrat Falls project from the beginning, economist and former Newfoundland Public Utilities Board chair David Vardy, former city manager and provincial deputy minister of public works Ronald Penney and Des Sullivan, producer of the Uncle Gnarley blog. Photo: Paul Daly / The Narwhal

Sullivan, who initially supported the Muskrat Falls dam, says he became suspicious when the Newfoundland government refused to allow a watchdog public utilities board to review the project to determine if it was in the best interests of ratepayers.

That decision, which mirrors a B.C. government decision to exclude the B.C. Utilities Commission from deciding if the Site C dam was in the public interest, is now under the microscope at the inquiry, with former politicians and premiers on the stand.

The Muskrat Falls project’s lack of transparency and a backlash against Vardy and Penney, who publicly called for an independent review, were other warning signs for the seasoned political advisor.

“The more I learned the more upset I became,” says Sullivan, who is now in real estate and writes a blog about provincial politics called Uncle Gnarley that has been a nexus for Muskrat Falls criticism (“opinions on Newfoundland politics that bite.”). “For people like Dave and Ron and others to be pilloried, for raising objections … just didn’t resonate.”

Muskrat Falls, according to Sullivan, is ultimately “about a group of people given access to a large public purse who wanted to do a large project.”

“They wanted another notch in their belt. And essentially they were prepared to do it even while deceiving the people of the province, in order to get licence to do it.”

The signs ignored

A forensic audit, undertaken as part of the inquiry, has revealed that Nalcor executives knew early on that Muskrat Falls capital cost estimates were wrong but chose to forge ahead with the project.

The audit found that Nalcor should have known shortly after the provincial government gave the green light to build Muskrat Falls — when there was still time to cancel the dam — that work was already half a year behind schedule and the project’s contingency fund had already been drained, sure signs of impending cost overruns.

The Muskrat Falls dam under construction in February 2019. Photo: Nalcor

Muskrat Falls transmission facility. Photo: Nalcor

Evidence has been presented that Nalcor intentionally kept information about the exhausted contingency fund from government officials.  

Nalcor also knew for months that costs were soaring but did not include that information in monthly construction reports to government, according to evidence presented at the inquiry.

“The conversation that Newfoundland is inevitably going to come to grips with is ‘how did the politicians of the day allow this Crown corporation to deceive the public, and why were they — the politicians — so willingly deceived?’ ” Sullivan reflects.

The art of the questionable deal

For Roberta Frampton Benefiel, the Muskrat Falls dam can be explained, at least in part, by a story about rotten onions.

The onions were in a bin in her local grocery store in the central Labrador town of Happy Valley-Goose Bay, 36 kilometres from Muskrat Falls.

Benefiel, who had just moved back to her hometown after three decades away, couldn’t spot a single mesh bag that didn’t have a pulpy mess inside. She found the store manager and demanded unspoiled onions, even if all the bags had to be torn open and their contents reassembled.

The friend shopping with her slunk away, embarrassed, but Benefiel eventually exited the store with onions she didn’t have to toss. “You walked away from this?” she said to her friend. “You should have been screaming long before I did.”

“We were way out of sight and out of mind. We didn’t exist …”

“Now, to be fair,” Benefiel tells The Narwhal, “had I lived there for the 30 years that I was gone I might have been in the same boat — thinking that I didn’t have a voice, thinking, ‘oh, that’s good enough.’ ”

In Benefiel’s view, Labradorians are far too accustomed to accepting questionable deals, especially from some of the corporations that dip into the honey pot of Labrador’s natural resources.

And no issue personifies that more for the 73-year-old great-grandmother than the Muskrat Falls dam, which takes its name from a natural waterfall, in turn named after the furry, semi-aquatic animal that populates wetlands the dam will flood.

“We didn’t have a voice,” Benefiel says. “We were way out of sight and out of mind. We didn’t exist, except to take Voisey Bay minerals and Lab City iron ore and, now, hydro power from our river … We’ve been used for years.”

Roberta Frampton Benefiel of the Labrador Land Protectors at the Muskrat Falls public inquiry in St. John’s, N.L., on March 27, 2019. Photo: Paul Daly / The Narwhal

Benefiel’s necklace bearing the logo of the Labrador Land Protectors. Photo: Paul Daly / The Narwhal

Benefiel holds her Labrador Land Protector necklace. “I’m a Labradorian. It’s my home and I don’t want to see it destroyed,” she told The Narwhal at the Muskrat Falls hearing. Photo: Paul Daly / The Narwhal

Nalcor is building the Muskrat Falls dam in Labrador when there’s a moratorium on building new dams in Newfoundland, Benefiel points out. She’s also keeping tabs on countries like Brazil, who are rethinking construction of new large dams due to their deep social and environmental footprints, which include emissions of methane and other potent greenhouse gases from reservoirs.

The Muskrat Falls dam is no exception to those well-documented impacts. The dam will flood the traditional homeland of the Innu, Inuit and southern Inuit, destroying more than 100 square kilometres of a sub-Arctic valley that has long provided Indigenous peoples with food and travel routes and is considered to be the most important cultural and environmental feature in all of Labrador.

Among other impacts, the dam will contaminate traditional Aboriginal foods — such as seals and land-locked salmon, known as ouananiche —with methylmercury and eliminate bird-breeding wetlands and habitat for at-risk species such as caribou, including for the highly endangered Red Wine Mountain caribou herd.

The great downturn

Central Labrador is no stranger to large dams. When the behemoth Churchill Falls dam, 300 kilometres upstream from Muskrat Falls, became operational in 1974, it flooded an area larger than Switzerland that had been the traditional hunting and trapping territory of the Labrador Innu.

But this time around, some of the weightiest consequences of dam construction will also be felt in Newfoundland, whose jagged northwest tip juts out into the Atlantic Ocean 17 kilometres from the southern shores of Labrador, across the foggy and gale-struck Strait of Belle Isle.

And those consequences will come at a time when Newfoundland can least afford them, as the province struggles to recover from the long-lingering effects of the 1992 cod fishery collapse and a faltering oil boom.

Signs of economic downturn are everywhere in St. John’s. The steep hills of the picturesque capital are dotted with ‘For Sale’ signs, including on a church hall, a union hall and the Bacalao restaurant, which offered “nouvelle Newfoundland cuisine” before it was shuttered.

At the Gathering Place, a non-profit service centre near the downtown, 350 people line up for a free home-cooked lunch every week day, according to executive director Joanne Thompson.

The facility, which also offers dental and medical care, showers, laundry facilities and a bright and warm place to spend the day, will soon open for dinner and on weekends to meet the growing demand, Thompson says.

The impact the Muskrat Falls dam will have on Newfoundland brings no cold comfort to Benefiel, who has seen her town’s streets churned up by heavy truck traffic, its small hospital become among the busiest in Canada per capita and bags of hazardous fly ash dumped in the unlined landfill during the past six years of dam construction — all before a 59-kilometre stretch of the valley is flooded.

“I’m a Labradorian. It’s my home and I don’t want to see it destroyed,” she says.

Benefiel arrives at the inquiry wearing a $7 trench coat she has just purchased at a Salvation Army thrift store and driving a borrowed white Mercedes. The only strip mall and clothing store in Happy Valley-Goose Bay has just burned down and her thick Labrador winter coat is too warm for St. John’s near-zero temperatures, she explains.

The Mercedes is on loan from a friend who has asked Benefiel, plasterer and painter by trade, to do a small favour and climb up a ladder to tar a stubborn leak in her roof. Benefiel, who had a knee replacement only a few months earlier, thinks she is ready for this. It’s less strenuous for her knee than running the Goose Bay Kritter Sitter boarding kennel out of the home she built herself with weekend help from friends.

“I’m here to keep track of what’s said and to catch any discrepancy — and we’ve caught a lot,” she says.

“We have been saying things all this time and these things are now coming out at the hearing … We said the costs at sanction [final approval] had been tampered with and that’s been borne out.”

Benefiel represents two Labrador-based groups that share partial standing at the inquiry, which shifts to an arts centre in Happy Valley-Goose Bay for two weeks at a time: the Grand Riverkeeper Labrador Inc., a non-profit organization dedicated to protecting the Churchill River and its estuaries, and the Labrador Land Protectors.

‘Danny’s project’

The land protectors are a group of Indigenous and non-Indigenous people who have been trying to stop Muskrat Falls — including, in some cases, through hunger strikes and civil disobedience — since they became aware that methylmercury would poison their food sources and learned about Nalcor’s decision to fortify a natural spit of land for the dam’s north spur.

The problem with the north spur, Benefiel explains, is that it’s built on “quick clay” prone to landslides. Failure could wipe out the downstream community of Mud Lake, accessible only by snowmobile or boat, and flood lower-lying areas of Happy Valley-Goose Bay, including her own home.

Nalcor maintains the north spur is perfectly safe. But the two Labrador groups — as well as a group of Newfoundland lawyers and the Concerned Citizens Coalition — are calling for an independent panel to assess its stability, much the way that local residents are calling for an independent safety assessment of the Site C dam in B.C.’s Peace River valley, also prone to landslides.

Benefiel was born in the Newfoundland fishing village of Little Catalina but grew up in Labrador after her family relocated when she was a baby. She raised her children in Tennessee and then went to university while in her 50s, earning a degree in environmental studies with a minor in geography while she painted houses for a living.

After falling off a ladder in Sackville, N.B., and breaking her leg, she hobbled back to Labrador and dropped in on her friend Clarice.

“I walked into her house and into the middle of a meeting and she said ‘you’re now a member of the Friends of Grand River.’ That’s how it all got started,” Benefiel remembers.

The meeting was about the Muskrat Falls dam and a far larger sister dam, the Gull Island dam, that Nalcor wanted to build further upstream.

Back then, it was common knowledge that Nalcor and the province’s premier Danny Williams were planning to build the two hydro projects. The plan was rumoured to have been hatched in St. John’s Guv’nor Inn, whose menu today features island fare like moose yorkies — Yorkshire puddings stuffed with moose meat — and cod tongues and scrunchions — tasty morsels of fried salted pork rind and fat. But nothing had been officially announced.

Williams seemed determined to build Muskrat Falls, much the way his legendary predecessor Joey Smallwood had championed construction of the Churchill Falls dam 40 years earlier and populist B.C. premier W.A.C. Bennett had built his namesake dam on the Peace River in the 1960s.

“It was Danny’s project … a legacy project,” says Penny, who also served as St. John’s city manager and the city solicitor.

Muskrat Falls was praised by politicians as “a good, sound financial project for Newfoundlanders.” The dam, to be constructed before the Gull Island dam, would “not increase net debt by a cent,” they promised.

Former Newfoundland premier Kathy Dunderdale, who granted final approval to the project in 2012 after Williams stepped down, called Muskrat Falls the “most cost-effective green energy solution for the demands of the people of Newfoundland and Labrador.”

In April, Dunderdale testified at the inquiry that she must have known about a $300 million jump in the project’s price tag — an issue only disclosed to the public through the inquiry — when financing arrangements were finalized in November 2013.

But some former cabinet ministers, including the ministers of finance and natural resources at the time, have testified they were not aware of the increase, and the inquiry has so far found no paper trail to back-up Dunderdale’s testimony that cabinet was fully informed.

Senior Newfoundland government officials were briefed about the jump in cost, but they may not have conveyed this information to politicians tasked with making the final decision, according to other evidence presented at the inquiry.

The ‘dupes’ of Nalcor?

The hearing room’s curtains hide a view of St. John’s striking harbour, its steep sides ringed with the winter’s last snow, and the copper-roofed provincial legislature known as the Confederation Building.

It’s in this building, inquiry co-counsel Barry Learmonth repeatedly suggests, that politicians should have engaged in far more rigorous oversight of the Muskrat Falls project. The government’s oversight of Nalcor was “weak, feeble and limited” and politicians were “dupes of Nalcor,” Learmonth has suggested.

In late March, a senior Nalcor official, James Meaney, is called back to the witness stand after testifying that even though he knew about significant cost escalations it was not up to him to disclose that information to the province.

That responsibility lay with Ed Martin, Nalcor’s CEO at the time, according to Meaney, who was Nalcor’s top financial official in charge of Muskrat Falls.

Dan Simmons, lawyer for Nalcor Energy, enters through security at the Muskrat Falls public inquiry in St. John’s, N.L. on March 26, 2019. He is followed by James Meaney of Nalcor Energy, who is prepared to go on the stand. Photo: Paul Daly / The Narwhal

As Meaney, with curly dark hair and a furrowed brow, takes his place in the black leather witness chair, his voice is steady and measured, almost a monotone. But his posture, with his left shoulder tilted higher than the right, and his restless hands, reaching for his water glass or twirling a pen, belies an inner agitation.

LeBlanc, framed by a large inquiry sign and the Newfoundland flag, scribbles note and weighs in occasionally as lawyers question Meaney.

Will Hiscock, counsel for the Concerned Citizens Coalition, asks Meaney about a Muskrat Falls cost increase from $6.9 billion to $7.5 billion that Nalcor sat on for many months.

“Were you ever refused permission to send something on to the independent engineer?” Hiscock asks, referring to MWH Global, the Colorado-based engineering firm hired to provide expert Muskrat Falls oversight for Ottawa and banks that lent billions of dollars to Nalcor for the project.

“I don’t recall a refusal,” Meaney says.

“There was a failure to provide information,” Hiscock clarifies a minute later. “You’re saying you weren’t refused but obviously permission wasn’t granted either to send stuff along. Was it just radio silence when you would reach out and say ‘we need to send something on to the government?’ ”

Meaney explains the information-sharing process, repeating that the Nalcor CEO Ed Martin needed to sign off, which prompts Hiscock to re-frame his line of inquiry.  

James Meaney of Nalcor Energy prepares to take the stand at the Muskrat Falls public inquiry in St. John’s, N.L., on March 26, 2019. Photo: Paul Daly / The Narwhal

“During the seven or eight months, when you knew you were sitting on old information — you had newer information there — did you ever say ‘can I send this to the government, can I send this to Canada, I’m going to flick this over to the oversight committee,’ whatever?’ “

Meaney says “there would have been lots of discussions in terms of trying to advance that information,” but he doesn’t answer yes or no.

Then Hiscock asks Meaney several times if the potential for Muskrat Falls cost increases was disclosed to Deloitte, the Crown corporation’s corporate auditors.

Meaney pauses. He purses his lips, frowns, jiggles his chair and tilts his head to one side.

“I expect they would have been aware that those are estimates and there is the potential for variation from those amounts, so there would have been discussion with Deloitte on that matter.”

“So that is a ‘yes, we did disclose the potential for cost overruns and the cost increases with Deloitte, our corporate auditors?’ ”

There would have been discussion with Deloitte “that those numbers could vary,” Meaney replies.

“And you wouldn’t have provided your corporate auditors with the out of date estimates? You would have been providing them with fresh, the best information you had — the $7.5 [billion] as soon as the $7.5 was available, the $6.9 [billion] as soon as the $6.9 was available, as they were your corporate auditors?”

Meaney says Deloitte would have been provided with updated costs estimates, but he doesn’t elaborate.

“I don’t believe it was in Deloitte’s mandate to look at the reasonableness of final forecast costs,” he says.

The details of SNC-Lavalin’s demotion

Vardy listens carefully to the testimony, conferring with Hiscock during the morning break and passing on questions that coalition members have been asking for years without response.

More than 100 thick white binders at the inquiry are labelled with names of witnesses called to the stand. They include former premiers, top civil servants, Nalcor officials and executives and senior employees from Muskrat Falls contractors like SNC-Lavalin.

Inside the binders are thousands of pages of previously secret and now unredacted Muskrat Falls dam reports, emails, memos and “confidential and commercially sensitive” Nalcor documents.

Vardy, Benefiel and others tried to obtain some of the reports and information through access to information requests, often coming up empty-handed or with critical pages redacted.

Together with testimony, the contents of the binders shine a spotlight on facts that project critics have been trying to put on centre stage for years.

Those in the media room observe Derrick Sturge of Nalcor Energy as he testifies at the Muskrat Falls Inquiry in St. John’s, N.L., in March 2019. Photo: Paul Daly / The Narwhal

Normand Béchard, project manager for SNC-Lavalin, prepares to testify at the Muskrat Falls public inquiry in St. John’s, N.L., in March. Photo: Paul Daly / The Narwhal

No one is exempt from being called to the witness stand, as former premiers, top civil servants and Nalcor officials are grilled by the inquiry’s co-counsels and a bevy of suited lawyers who sit at long desks day after day as monitors flash up exhibits.

Tommy Williams represents his brother, former premier Danny Williams, who announced the Muskrat Falls project to much fanfare in 2010 and, in his inquiry testimony last December, called continuing opposition to the project “reckless, irresponsible and shameful.”  

Even the embattled engineering firm SNC-Lavalin is on the stand, its Muskrat Falls documents relinquished to the inquiry for anyone to see. The Quebec company was a Muskrat Falls dam cost estimator, a role it also held for B.C.’s Site C dam.

SNC-Lavalin was also originally responsible for the Muskrat Falls dam engineering, procurement and construction management. Then Nalcor demoted the company amidst conflict revealed in jaw-dropping testimony, with Nalcor testifying it was unhappy with SNC’s early performance and a SNC-Lavalin veteran project manager saying his team was bullied by Nalcor and “treated like slaves.”  

Helpful inquiry staff call people ‘dear’ in Newfoundland brogue, similar to an Irish accent. The uniformed sheriffs pass around a box of chocolates at the end of the day. But underneath the island’s traditional friendliness the atmosphere is solemn and contemplative, the hearing room expectant, as LeBlanc and inquiry co-counsels try to get to the bottom of how so much public money was squandered.

‘You can’t un-crash a helicopter’

For those who question the amount of money spent on the inquiry, Vardy points to the crash of Cougar helicopter flight 491 as it ferried workers to a three-week shift on Newfoundland’s Sea Rose offshore oil platform. The 2009 accident killed almost everyone on board and led to an inquiry that made recommendations about how to improve safety in Newfoundland’s offshore industries.

“You can’t un-crash a helicopter,” Vardy says. “But you can find out why it happened and try to make sure it doesn’t happen again.”

Former Newfoundland utilities board director, David Vardy. Photo: Bojan Furst

The Newfoundland government, acutely aware of escalating worries about rising hydro rates, released a plan on April 15 called “Protecting You from the Cost Impacts of Muskrat Falls.” The plan is designed “to protect residents from increases to electricity rates and taxes resulting from the Muskrat Falls project that would affect the cost of living.”

The government describes the plan as the “culmination” of a series of important steps taken to protect residents.

Those steps include restoring the oversight role of Newfoundland’s public utilities board and securing a federal commitment to engage with the province “to expeditiously examine the financial structure of the Muskrat Falls project so that the province can achieve rate mitigation.”

A federal bailout with tough love conditions appears almost inevitable now for the cash-strapped province. “This is an existential threat to the financial independence of the province and to our political sovereignty,” Vardy says. “If we have to be bailed out by the feds we’ll lose some element of our sovereignty.”

At the end of April, just after the plan is released, Benefiel travels from Happy Valley-Goose Bay to the northeastern United States for a Muskrat Falls speaking tour, organized by the North American Megadams Resistance. Large dams are a “false solution” to the climate crisis, the alliance asserts, noting the disproportionate toll they take on Indigenous communities.

Benefiel says it’s important to educate “folks down south” about the perils of big hydro projects: “They’ve got to stop buying this damn power.”

“I don’t know what keeps me going sometimes,” Benefiel admits. “I’ve been fighting this project for 20 years.”

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.

For eight years, Graham Lane headed a watchdog commission that raised red flag after red flag about the Keeyask dam hydro project on Manitoba’s Nelson River.

Politicians ignored the warnings and in 2012 Lane resigned as chair of Manitoba’s Public Utilities Board, concerned that Manitoba Hydro had strayed far from its main purpose — to provide low cost energy to Manitobans.

Now the retired chartered accountant is speaking out in the hopes of stemming the losses from the Keeyask dam project and a related transmission line, which he calls “an albatross around the necks of Manitobans.”

“In Manitoba basically everything has gone wrong,” Lane told The Narwhal. “It’s quite a disaster.”

Even though the utilities board kept flagging “runaway expenses and changing markets” as reasons to reassess the projects, Lane said the provincial government “just kept going” while the price tag for the dam and transmission line soared from $9.8 billion to almost $14 billion, with the dam’s final cost potentially $2 billion more.

“I’d had enough. I hung up my skates. I waited my year away. And then I started writing columns about it.”

‘Vast majority of Canadians don’t even know what Keeyask is’

The lesser known Keeyask dam joins B.C.’s Site C dam and Labrador’s Muskrat Falls dam on the list of hugely over budget big hydro projects currently under construction in Canada.

“Keeyask seems to fly beneath the radar,” said Garland Laliberte, a dean of engineering emeritus at the University of Manitoba. “Muskrat Falls gets a lot of exposure and even Site C gets more coverage. I think the vast majority of Canadians don’t even know what Keeyask is let alone what problems it’s causing in this province.”

Four years into construction 730 kilometres northeast of Winnipeg, the Keeyask dam will inundate 93 square kilometres of the Nelson River and boreal taiga lands or “snow forests” of pine, spruce and larch. It will destroy spawning areas and other habitat for fish such as sturgeon and result in habitat loss, alteration and fragmentation for caribou, moose and beaver.

Like the Muskrat Falls and Site C dams, the Keeyask project will also have a significant impact on Indigenous peoples, eliminating trapping, fishing and hunting sites in the traditional territory of Treaty 5 nations. The dam, which will be built at Gull Rapids, is named after the Cree word for gull.

With three large dams in the works, Canada is bucking the trend in Europe and North America, where the unacceptable price tag and profound social and environmental impacts of large hydro projects means that more big dams are being dismantled than are being built.

Keeyask dam map. Image: Manitoba Hydro

Laliberte said the global energy market has changed far faster than Canada’s politicians realized, as the price of wind and solar energy plummets, new energy storage options become available and the cost of building large hydro dams soars, in part because of hefty payouts to affected Indigenous communities.

Manitoba Hydro, for instance, has paid $169 million to First Nations who will be impacted by the project and is expected to pay out another $100 million.

“I think the main driver is politicians not understanding the market and thinking that it’s good to be seen to be investing, in all three cases, in renewable energy and thinking it’s going to fly,” Laliberte said in an interview.

“And our politicians were too busy doing other things and they believed that the market doesn’t change. And, of course what happened is that the speed of change now is so much greater than it was even 10 years ago and these guys went out on a limb and they got caught.”

Coalition warns of ballooning Keeyask costs

LaLiberte is a founding member of a grassroots Manitoba group called the Bipole 111 Coalition. The coalition was established by engineers — most of them retired from careers in Manitoba Hydro, the University of Manitoba and the consulting world — to inform provincial hydro customers about the impacts of proceeding with construction of the transmission line and Keeyask dam.

The coalition’s members include dozens of farmers in the Red River Valley whose land is being expropriated for a transmission line that will run through the heart of Manitoba’s most productive agricultural region, dividing farm lands.

The coalition is named after the line that will carry Keeyask’s energy southward, where Laliberte estimates it will be sold to U.S. markets for an average of $36 per megawatt hour even though it will cost about $140 per megawatt hour to produce. One consultant for the utilities board warns the Keeyask dam could balloon by another $2 billion by the time it becomes partly operational in 2021.

Lane said coalition members call the Keeyask dam “our stranded white elephant.”

“The Americans will buy [the power.] Of course they’ll buy it. But they’ll only buy it at a price that works for them.”

Watchdogs undermined

The Keeyask, Site C and Muskrat Falls dam projects have much in common besides their hefty environmental footprint, which includes poisoning fish, a traditional food source for Canada’s Indigenous peoples, with methylmercury.

In all three cases, the independent watchdog body that normally looks out for the public interest was removed, hamstrung or ignored by provincial politicians who were determined to push ahead with big hydro projects even though their electricity was not needed domestically.

B.C., for instance, has had so much extra power that BC Hydro has paid independent energy producers not to generate electricity. And as the Site C project moved forward, BC Hydro slashed its budget for energy conservation programs — programs that according to BC Hydro had saved about as much energy as the Site C dam would produce.

In each province, a change in government brought an opportunity to cancel the projects as costs surged and far cheaper, more nimble and less destructive renewable energy sources became readily available. Yet those opportunities went unseized, with newly elected governments of different political stripes continuing construction and approving cost overruns of billions of dollars.

That has led to another striking parallel: when the dams are complete, after seven to nine years of construction, their electricity will be sold for considerably less than it costs to produce, leaving hydro customers in all three provinces on the hook financially.

The impending pinch is already being felt in Newfoundland and Labrador, where the cost of the Muskrat Falls dam on the Churchill River, now nearing completion, has jumped from $6.2 billion to $12.7 billion. Hydro rates are expected to double as a result, and households can calculate how much their bills will likely increase.

Manitoba Hydro recently asked for annual 7.9 per cent rate hikes. Instead, a rate hike of 3.6 per cent was approved this year.

But it’s only a matter of time before the “amazing amounts of money” spent on the Keeyask dam and transmission line need to be accounted for, Lane said.

“If costs get to the point where you’ve got government siphoning it off to the sides so that ratepayers aren’t going to be too shocked when they go to the polls this is a bad thing.”

In B.C., the $10.7 billion bill for the Site C dam — which will flood 128 kilometres of the Peace River and its tributaries, destroying prime farmland, Indigenous burial sites and habitat for more than 100 species vulnerable to extinction — will only come due if the project becomes operational about five years from now.

In October, a B.C. Supreme Court judge ordered that a full civil trial, to determine whether or not the Site C project violates treaty rights, must take place before the reservoir is flooded, raising the possibility that British Columbians could be left with a stranded asset if two Treaty 8 First Nations win the case.

Site C dam construction along the Peace River, B.C. Photo: Garth Lenz / The Narwhal

Viability of large hydro dams a question in clean energy future

Lane and Laliberte question whether large hydro dams are still financially viable because there are much cheaper and faster ways to produce clean electricity.

“I can’t see another dam being built in Manitoba,” Lane said. “There’s probably enough river opportunities to build a couple more. But they’re gone. There’s no need for them with the renewables and even with natural gas, the energy efficiencies and everything else under the sun.”

Laliberte pointed to a recent call for bids to replace coal plants in Pueblo, Colorado. Out of 430 bids, 350 were for renewables, he said. The median price for wind power was US $18 per megawatt hour, and the median price for wind power with storage was US $21 per megawatt hour.

The Site C dam’s power, by comparison, will cost at least $120 per megawatt hour to produce, according to independent energy experts such as Eoin Finn, a former partner with KPMG, one of the world’s largest accounting and consulting firms.

“You’ve got too much electricity and you’ve got a lot of hydro in your system now in B.C.,” Laliberte pointed out. “So you have a lot of storage already. Can you really justify Site C in the B.C. circumstance on the basis of storage? I would be surprised.”

“So how are we going to sell this electricity? What are we doing in Canada just because we have hydro and we can claim that it’s renewable, although many would challenge how renewable it is considering what the impact is on the environment?”

Among other environmental impacts, large dams are major emitters of greenhouse gas emissions during construction, due to vast amounts of concrete used to build them and the burning of slash piles when tracts of land are cleared for transmission lines. Reservoirs are also significant carbon emitters, with about 80 per cent of emissions coming from methane, a greenhouse gas 34 times more potent than carbon dioxide.

A November 7 statement from the Bipole 111 coalition and the Manitoba Energy Council noted that Manitoba Hydro’s claim that the transmission line was needed for reliability has never been proven, pointing out that Manitoba Hydro’s reputation as the “crown jewel” of the province is in “tatters.”

“The proponents in the NDP provincial government and Manitoba Hydro who championed the expansion are long gone, living comfortably on pensions and termination benefits,” noted the statement.

The energy council, established this month by Bipole 111 coalition members, aims to find ways to promote the “economic, efficient and beneficial” use of electricity moving forward.

Dams face costly retroactive scrutiny

Faced with Manitoba Hydro’s insolvency, the Manitoba government recently announced a $2.5 million review to examine if the projects were based on sound economics and why the Keeyask project — like the Site C and Muskrat Falls projects — was approved in the absence of domestic demand.

The Manitoba review comes on the heels of a $37.5 million inquiry launched by the Newfoundland and Labrador government to determine why the Muskrat Falls dam proceeded, why it is so over budget, and whether the decision to exempt it from independent review was justified. As inquiry hearings continued last month, 500 workers were sent home from the Muskrat Falls construction site because there was no money to pay them.

The appointment of former B.C. premier Gordon Campbell to head the Manitoba review concerns Lane, who pointed out that Campbell has little experience in this area.

Campbell championed the Site C dam, announcing it as a $6.6 billion project when he was premier.

Campbell’s government also changed the law to remove the watchdog B.C. Utilities Commission (BCUC) from scrutinizing the Site C project to determine if it was in the financial interest of BC Hydro customers. A two-year BCUC review in the 1980s rejected the dam, which was also turned down in the early 1990s by BC Hydro’s board of directors on the grounds that its energy was not needed and the project was too expensive and unnecessarily destructive.

Campbell, now the CEO of Hawksmuir International Partners, a company that appears to have no website, has until December 2019 to deliver his report.

Lane said he believes the review is a “set up” to help Manitoba’s ruling Conservative government “whack the NDP before the next election.”

Manitoba’s NDP government approved the Keeyask project and the Conservative provincial government opted to continue the project after it was elected in 2016, despite repeated warnings that it was a boondoggle.

“You can just see it coming,” Lane said. “They’ll be labelling the waste and the cost…but it won’t necessarily be an open transparent process.”

Lane and other members of the Manitoba Energy Council are calling for a transparent, independent public inquiry to determine why the checks and balances of Manitoba’s system failed. Such an inquiry would allow the books to be “thrown open” and the ability to call witnesses so “people could actually understand what’s happened over this period of time,” said Lane.

In one column for the Winnipeg Sun, Lane wrote that, “Hard questions need to be asked about governance, political oversight, the influence of engineering contractors, the competence of executive managers, the advice provided by consultants, and the role of labour unions in this train wreck.”

“None of those parties will emerge looking good, but it is time to ensure a ‘never again’ future for key provincial infrastructure,” he wrote.

Lane also said that special attention needs to be placed on the “lack of action” by Manitoba Premier Brian Pallister, who had an opportunity to cancel the project after he was elected.

Pallister, along with his cabinet and advisors, failed to “grasp the immensity of the problem and take appropriate actions,” Lane said.

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After months of secrecy — and a few vague threats to withdraw from carbon pricing altogether — the provincial government of Newfoundland and Labrador has finally unveiled its federally approved climate plan.

While many details around its implementation remain unclear, what we know so far suggests that the big winner is the province’s oil and gas industry.

Filled with exemptions for large producers and consumers alike, the carbon pricing framework was designed to spur plans to double Newfoundland and Labrador’s offshore oil production by 2030.

“The way the [Dwight] Ball government has chosen to roll this out is to say: ‘there is no real carbon tax here, it doesn’t apply to anything, don’t worry, keep your head down, ignore this,’ ” Memorial University political scientist Russell Williams told The Narwhal.

“That’s exactly the opposite motivation for why we adopt carbon pricing systems in the first place.”

The centrepiece of the Newfoundland and Labrador climate plan is the controversial Muskrat Falls hydroelectric project, anticipated to come fully online in 2020. When this occurs, the province hopes to completely decommission the bunker oil-burning generator in Holyrood, which emits roughly 10 per cent of the province’s total 10.3 megatonnes of greenhouse gas emissions.

The remainder of the provincial carbon pricing scheme emphasizes just how little anyone will be required to pay. For example, the province is upping fuel taxes from four cents on gasoline and five cents on diesel to 4.42 and 5.32 cents respectively.

The provincial plan exempts home heating fuel, off-grid diesel generators, aviation fuel, the interprovincial ferry system and municipalities.

“Consider the exemption on home heating fuel,” Williams said. “This exemption is for everybody, and for as much home heating oil as you can consume. This is really counter-productive in a carbon-pricing environment.”

After factoring in exemptions, only 76 per cent of total greenhouse gas emissions in Newfoundland and Labrador are subject to carbon pricing. The provincial government also advises that it reserves the right to scrap all this should any other province refuse to set a plan or abide by the federal backstop.

“Given developments elsewhere in Canada, it’s excellent that the government of Newfoundland and Labrador isn’t outright rejecting carbon pricing,” University of Waterloo political economist Angela Carter told The Narwhal.

“But at the same time, this is a free pass for the offshore oil industry. The reality is that they will be paying a very small fee on a fraction of their emissions.”

Offshore oil industry dominates

Plans for Newfoundland and Labrador, put forward by the Liberal government, anticipate more than 100 new offshore exploration wells will be drilled in the next decade.

“That is absolutely remarkable,” Carter said, “because based on the data I’m seeing, there have only been 151 wells drilled into the offshore on Canada’s east coast since 1955.”

“The emphasis more than ever is on situating Newfoundland as the preferred location for oil extraction.”

Newfoundland and Labrador has become increasingly dependent on the petrochemical industry.

When Hibernia — an oil field about 300 kilometres offshore from Newfoundland — first came online in 1997, mining and oil extraction made up 11 per cent of the province’s GDP. By 2007, it reached a high of 47 per cent. Oil revenues, meanwhile, accounted for 30 per cent of the province’s revenue by 2010. After the 2014-2015 oil crash, mining and oil extraction dropped to 24 per cent of provincial GDP in 2017 while royalties declined by nearly 80 per cent between 2011 and 2017.

The industry also represents about 20 per cent of the province’s total emissions, a share expected to climb as new projects come online.

The provincial government’s stated intention is to double offshore oil production by 2030.

In her latest comparative study of carbon pricing plans in Canada’s oil producing provinces, Carter found that climate policy in Newfoundland and Labrador has always reflected its dependence on offshore oil.

“An industry-friendly approach has been built into the core principles of the province’s approach to regulating large emitters,” she told The Narwhal.

“Earlier climate documents were very frank in terms of acknowledging that the oil sector is driving along the rise in provincial emissions. But even the mandate of the Office of Climate Change from its inception was to give equal weight to environmental sustainability and economic growth. There was an emphasis on protecting industry and economic competitiveness from the get-go.”

The carbon price regulations reflect that industry-friendly approach. There are exemptions for agriculture, fishing, forestry, offshore and mineral exploration, methane venting and fugitive emissions. New entrants or “significantly modified” facilities are also exempt from the first three years of production, followed by a five-year phase-in.

Doubling oil production by 2030 guarantees the province will not meet its emission reduction targets. But this is par for the course in the Canadian carbon pricing strategy.

‘The underbelly of oil dependence’

Williams argues that the lax carbon pricing in Newfoundland and Labrador is representative of the broader failings in the federal system.

Canada’s national carbon pricing plan is not designed to slow growth in industries, Williams said.

“At best, it’s intended to try and get consumers to reduce their emissions, to try and wash out what’s going on on the large industrial side.”

But ultimately, he said, “the climate plan is a federal responsibility” while provinces have to pay “for all the services that voters clearly really want, like healthcare.

“The provinces badly need money. Natural resource revenues are really hard to ignore as a solution to that problem.”

Carter warns that the call of oil revenue is a siren song. Weaning the province off its dependence on oil and gas is as important for sustainable economic development as it is for the environment.

“The underbelly of oil dependence was revealed to us by the oil price crash at the end of 2014,” she told The Narwhal. In the three years following the crash, the province packed on debt to pay for basic services in the absence of the oil revenues it had become accustomed to.

“We can see what it does to our economy. It’s not a reliable industry.”

A bigger shift is happening globally as well that could start to see oil and gas prices permanently depressed. Carter said a much larger conversation needs to happen around the concern of stranded assets.

“Decarbonization is underway globally. What if we are moving away from a fossil fuel-powered energy system?”

“That means Newfoundland is putting all of its hopes on an industry that’s in decline.”

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Mark Winfield is professor of environmental studies at York University and co-chair of the university’s Sustainable Energy Initiative. This piece originally appeared on Policy Options.

Newfoundland and Labrador Premier Dwight Ball announced in late November a public inquiry into how the economically disastrous Muskrat Falls hydroelectric project was approved.

In reality, there is little mystery.

The project was strongly supported by the governments of former premiers Danny Williams and Kathy Dunderdale. A very limited economic review was permitted by the province’s Public Utilities Board, and the federal-provincial environmental review panel established in relation to the project was barred from examining its economic viability.

Both the board and the panel, to their credit, questioned the need for the project, but their advice was ignored.

A similar story has been unfolding on Canada’s west coast. The new British Columbia government of Premier John Horgan found itself faced with the question of whether to continue the construction of the controversial Site C hydro dam project. In the end, the B.C. government determined that it had no choice but to proceed, given the costs of cancelling the project.

ICYMI: NDP Government’s Site C Math a Flunk, Say Project Financing Experts

The story behind Site C is very like that around Muskrat Falls.

The project was strongly supported by the government of former premier Christy Clark, and the normal economic review process before the B.C. Utilities Commission was bypassed. The joint federal-provincial environmental assessment process that did occur was deeply constrained, and it remains the subject of long-standing criticism from the affected First Nations and communities.

The stories of these projects in B.C. and in Newfoundland and Labrador stand in contrast to the process that occurred in Manitoba over the same time period.

That province had proposed a massive hydro project of its own: the 1,485-megawatt Conawapa Dam.

However, Manitoba’s approach was fundamentally different from that taken in B.C. and Newfoundland. Rather than short-circuiting the normal assessment and approvals processes for these types of projects, the government of Manitoba undertook a substantial public review of the economic rationale and environmental and social impacts of the project.

This included consideration of the need for the project and the availability of alternative ways of meeting the province’s electricity needs.

Given the opportunity for a proper review, the Manitoba Public Utilities Board determined that there was no economic justification for the project. The dam did not proceed as a result.

Although several smaller related projects did still go ahead, notably the controversial Bipole III transmission project, the outcome of the review saved Manitoba residents from the kinds of catastrophic costs now faced by people in B.C. and in Newfoundland and Labrador.

The story, however, does not stop there.  

If B.C. and Newfoundland and Labrador had followed the type of comprehensive public review undertaken by Manitoba for its hydro megaproject, they might well have avoided the disastrous situations they now find themselves in. https://t.co/gmBrjD2nkl

— DeSmog Canada (@DeSmogCanada) January 24, 2018

In central Canada, the government of Ontario has embarked on an energy megaproject of its own: the reconstruction of 10 nuclear reactors at the Bruce and Darlington nuclear power plants. If everything goes according to plan, the projects are estimated to cost in the range of $26 billion. Many critics suspect, based on the outcomes of the province’s previous nuclear refurbishment projects, that things will not go according to plan.

The costs could be tens of billions of dollars higher than the province’s estimates.

There is even less excuse for the behaviour of the government of Ontario, which seems poised to condemn its residents to decades of massive electricity debt as well.

Surprisingly, particularly in a province where rising hydro rates are the number one political issue, Ontario’s nuclear reconstruction projects have been subject to even less meaningful public review than the Site C and Muskrat Falls projects.

There have been no public hearings at all before the province’s energy regulator on the need for these projects, their likely costs or the availability of alternatives to them. It has been reported, for example, that Hydro-Québec has offered Ontario firm, long-term deals for electricity exports at a fraction of the best-case estimates of the costs of the nuclear refurbishments.

There has been no formal public examination of this option, or of the need for the refurbishments in the context of the province’s current electricity surplus.

The lessons that flow from the experiences of these four provinces seem clear. If B.C. and Newfoundland and Labrador had followed the type of comprehensive public review undertaken by Manitoba for its hydro megaproject, they might well have avoided the disastrous situations they now find themselves in.

There is even less excuse for the behaviour of the government of Ontario, which seems poised to condemn its residents to decades of massive electricity debt as well.

The federal government is not without blame in these events. All these projects were subject to some form of federal approval and environmental assessment.

In each case, the federal government deferred to the wishes of the projects’ provincial sponsors, limiting the scope of federal reviews and avoiding unwelcome questions about need, alternatives and economic viability.

Justin Trudeau’s government was elected two years ago in part because of promises to reform the federal environmental assessment and regulatory review processes that apply to these types of projects.

So far, the Trudeau government has produced a discussion paper, which in large part proposes to leave in place the existing processes, established in their current form through former prime minister Stephen Harper’s 2012 “responsible resource development” initiative.

ICYMI: Is Trudeau Quietly Turning His Back On Fixing Canada’s Environmental Laws?

The situations that are now emerging in British Columbia, Newfoundland and Labrador, and Ontario make it clear that those approaches are not good enough.

Federal and provincial assessment and review processes need to ensure that there are meaningful, public evaluations of the economic rationality and social and environmental impacts of energy and resource projects before they proceed. It remains to be seen whether Canadian governments will draw the same conclusion.

Canada’s taxpayers and energy ratepayers should hope that they do.

Image: Early Site C construction along the Peace River, 2016. Photo: Garth Lenz | DeSmog Canada

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BC Hydro’s new CEO Chris O’Riley has written a letter to the B.C. Utilities Commission stating that the crown corporation will not meet the timeline for river diversion for the Site C dam, which will add $610 million to the project’s price tag.

“BC Hydro has encountered some geotechnical and construction challenges on the project and the risk to the river diversion timeline has now materialized,” O’Riley wrote.

“Based on the recent completion of a constructability review and an executive meeting with our Main Civil Works contractor on September 27, 2017, we have now determined that we will not be able to meet the current timeline for river diversion in 2019.”

The letter was in response to questions set out in the BCUC’s preliminary report issued on Sept. 20th.

ICYMI: What That 205-Page BCUC Report on the Site C Dam Actually Said

“Not meeting the current river diversion timeline has created new pressures on the project’s budget. We estimate that this development in the project is expected to increase its cost by 7.3 per cent or $610 million, for a total forecast project cost of $8.945 billion,” reads the letter.

BC Hydro had identified risks to the river diversion timeline in its August 30 filing with the B.C. Utilities Commission. An independent audit by Deloitte also identified the risk.

"BC Hydro are finally being a bit more transparent. It’s what we had expected for some time that this project has been mismanaged," said former BC Hydro CEO Marc Eliesen.

BREAKING: Site C Dam $600 Million Over Budget, Will Miss River Diversion Timeline, Says BC Hydro CEO https://t.co/ExEm9pgmu6 #SiteC #bcpoli

— DeSmog Canada (@DeSmogCanada) October 5, 2017

The Site C dam is the most expensive public project in B.C. history and, if completed, will flood more than 100 kilometres of river valley, destroying farmland and First Nations spiritual sites.

“Today’s filing provides an opportunity for us to share new information with the commission and the public,” O’Riley wrote in his letter. “Like all large, complex projects, Site C faces risks and uncertainties.”

The letter also notes that while the delay will set some activities back a year, there was a one-year float built into the schedule and BC Hydro is “confident we can still deliver this project ton time by November 2024.”

But Eliesen says that’s not a credible claim.

“There’s no way they’re going to meet the 2024 deadline. Keep in mind we’ve only completed two years of a nine-year project. We’ve got seven years to go with all of the problems and challenges and geo-technical issues,” Eliesen told DeSmog Canada.

The BC Hydro letter also notes that “due to the project’s complexity, we expect to continue to face risks in other areas, including our second largest procurement (i.e. the Generating Station and Spillway) that remains open and the highway realignment.”

Eliesen estimates the final price tag on Site C will escalate to $12 billion if the project is not terminated.

ICYMI: Revealed: Inside the B.C. Government's Site C Spin Machine

ICYMI: EXCLUSIVE: B.C. Government Broke Law to Expedite Site C Dam Construction, Legal Experts Say

“It is following almost the identical track that the other two major hydro projects in Canada — Keeyask in Manitoba and Muskrat Falls — have followed.”

Those two projects have been struck by major cost overruns and delays.

Despite the challenges Site C is facing, the letter states that BC Hydro’s analysis “continues to confirm that completing Site C as planned is still the most cost-effective option for our customers.”

“We remain committed to Site C and are confident in our ability to deliver the project,” the letter reads.

Eliesen finds that conclusion “totally bizarre” and credits the “very good work” of the Deloitte consultants for forcing BC Hydro to admit the project is over budget and behind schedule.

“To try to complete this project at this time is throwing good money at bad,” he said. “All of the evidence that’s coming out from this inquiry is that we don’t need the power.”

DeSmog Canada first reported on June 30, 2016, that the Site C dam was behind schedule and over budget. Documents obtained via Freedom of Information legislation later revealed a co-ordinated attempt by BC Hydro and the Premier's Office to discredit the story.

Image: Site C dam construction June 2016. Photo: Garth Lenz|DeSmog Canada

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David Vardy has a message for British Columbia about continuing work on the Site C dam while the project undergoes a quick independent review by the B.C. Utilities Commission (BCUC).

“My comment to British Columbia is a big red sign saying ‘Stop.’ This is crazy. Don’t go ahead with this [project],” Vardy told DeSmog Canada.

“While the review is taking place the activity should be suspended.”

Vardy is the former chair and CEO of Newfoundland’s public utilities board, which reviewed the “boondoggle” Muskrat Falls dam after a new provincial government came to power. As in the case of Site C and B.C.’s former Liberal government, the previous Newfoundland government had refused to allow independent scrutiny of Muskrat Falls.

On Wednesday the B.C. cabinet instructed the BCUC to provide two reports on Site C — a preliminary report by September 20 and a final report by November 1.

“We appreciate that a lot of people’s lives are on hold, especially in the northeast,” Energy Minister Michelle Mungall told a media briefing today, “and that’s why we want to make this an expedited process.”

Mungall was in part referring to people like Peace Valley farmers Ken and Arlene Boon, whose property was expropriated by the B.C. government last December for the relocation of a provincial highway for Site C. The Boons have remained in their farmhouse, now owned by BC Hydro, but their lease has expired and they are anxiously waiting to find out what will happen to their third generation home and property.

Mungall said no Peace Valley families will be forced to move and no further Site C contracts will be issued during the review, news that was met with relief by the Boons.

“We’re ecstatic,” said Ken Boon, reached by phone while moving hay bales. “That pretty much covers it.”

The BCUC review will focus on assessing whether or not the $8.8 billion Site C hydro dam is truly on time and on budget, as the former Liberal government claimed, and what the costs are to suspend, terminate or continue with the project.

Vardy, an economist, said Muskrat Falls went through a “quick and dirty review,” a process that took five months and resulted in the utilities board concluding that it lacked sufficient information to make a recommendation about whether or not to proceed with the dam on Labrador’s Churchill River.

Newfoundland’s new government went ahead with construction of the dam, which the CEO of Nalcor Energy, the Newfoundland equivalent of BC Hydro, has now admitted is a “boondoggle.” The cost of Muskrat Falls has ballooned to $12.7 billion, about $5 billion more than the price tag when the project was approved, and it will cause the average Newfoundland household’s hydro bills to jump by an estimated $1,800 a year.

Vardy said it was a “tall order” to ask the BCUC to review Site C in such a short amount of time.

“The main concern that I have is that the timing seems to be very short given the complexity of the review. It’s a very constricted time frame,” he said.

But Mark Jaccard, the former head of the B.C. Utilities Commission, said three months is plenty of time to review Site C. There are “all sorts of precedents” for that, said Jaccard, a professor in the School of Resource and Environmental Management at Simon Fraser University.

Jaccard said he once led a very quick hearing on gasoline prices in B.C. A few independent experts were asked to write a quick review on a narrowed range of possible responses to the key questions in the terms of reference.

The BCUC then issued a 20-page report and instructed intervenors — people with a stake in the issue who had signed up to participate in the hearing — to limit their criticisms, evidence, suggestions and arguments to about 20 pages, with a time limit for response.

It's Finally Happening: #SiteC Gets Its Date with the B.C. Utilities Commission https://t.co/D6ENSeu33r #bcuc #bcpoli

— DeSmog Canada (@DeSmogCanada) August 2, 2017

“We received all their material, digested it, and significantly edited our findings,” said Jaccard, who headed the BCUC from 1992 to 1997. “So think of that as a paper hearing.”

David Austin, a Vancouver lawyer specializing in energy issues, agreed that three months is sufficient for a thorough Site C review.

“As long as the necessary expertise is assembled the timelines are achievable,” Austin told DeSmog Canada, adding that work on the hydro project should continue in the meantime.

“Essentially the utilities commission is determining whether Site C can break even or make money from 2024 to 2094,” said Austin.

“Until the government has some basic facts before it, it shouldn’t terminate workers. That’s just the price that has to be paid given that the project was commenced in the way it was.”

Vardy also warned that focusing on Site C’s job creation potential rather than its overall cost and need for the electricity “makes no sense.”

“You can’t rationalize this on the basis of job creation.”

In Newfoundland, where 5,000 people were employed to work at Muskrat Falls during the project’s peak construction period, it cost ratepayers half a million dollars for each job that was created, said Vardy, who cautioned that “the only thing that really matters” in an economic assessment of Site C are future costs, not money that has already been spent.

“Even though you might have spent a lot of money — billions of dollars — you’ve got to set that aside and ask the fundamental question: how much is it going to cost to finish this and how much is it going to cost to stop it?”

The terms of reference for the Site C review, which Vardy called “very comprehensive,” include asking the BCUC to advise on other energy portfolios and conservation initiatives that can provide clean energy to BC Hydro customers at similar or lower costs to Site C.

The BCUC has said it is “ready and able” to review Site C if asked by the government.

Mungall said there will be a public engagement process during the BCUC review, and that it will be up to the BCUC to determine the format it will take.

She said the B.C. cabinet will make the final decision on Site C.

Image: Peace Valley Ken Boon in his kitchen, by Garth Lenz.

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B.C. Premier Christy Clark made headlines last month when she claimed that even a few months delay in evicting two Peace Valley families from their homes could add $600 million to the Site C dam project tab.

When Premier designate John Horgan asked BC Hydro to hold off forcing families from their homes this coming week as scheduled, Clark wrote to Horgan that “…with a project of this size and scale, keeping to a tight schedule is critical to delivering a completed project on time and on budget.”

But now BC Hydro’s latest Site C report reveals that — well before May’s provincial election and Clark’s headline-grabbing claims — the hydro project was already late meeting three out of eight “key milestones” for 2017 and was at risk of being late for three more.

It begs the question: was Clark trying to deflect blame for Site C construction delays and potential cost overruns onto the soon-to-be NDP government?

Tucked away on page 30 of BC Hydro’s most recent quarterly Site C report to the B.C. Utilities Commission is a chart of “key milestones.” It provides a glimpse at some of the behind-the-scenes challenges of keeping the $8.8 billion project on schedule and on budget.

Report Cites Reasons for Site C’s Late and “At Risk” Milestones

The report lists some of the reasons for Site C’s late and “at risk” milestones. Among them are a pesky 400-metre long tension crack on an unstable Peace River embankment and delays — prior to March 31 — in awarding contracts. 

One key milestone, a new civil contract award for the dam’s generating station and spillways, was five months behind schedule by March 31. A milestone to complete a road on the north bank, where the tension crack appeared in February, was 13 months behind by the end of March.

And a contract to relocate a section of provincial highway away from the Site C flood zone — the reason Clark gave for the pressing need to evict farmers Ken and Arlene Boon from their home as scheduled on July 15 — was one month behind and deemed to be “at risk” before the election campaign kicked off in April.

The report notes that the delay, even as of March 31, “may impact the overall work schedule” for highway relocation at Cache Creek, where the Boons live.

Site C Dam Late for Key Milestones Under BC Liberals, Report Reveals https://t.co/e6dpYO9KlM #bcpoli #SiteC pic.twitter.com/3Wf53gQUKl

— DeSmog Canada (@DeSmogCanada) July 14, 2017

It also states that “plans are in place to address potential delays” in constructing Peace River diversion tunnels — the river must be diverted to allow construction of the dam structure — as a result of the tension crack. 

Yet Clark made no mention of these potential delays when she told Horgan that allowing the farmers to stay in their homes for a few more months could prevent river diversion from occurring as planned in September 2019. 

In Clark’s words, “Preliminary work undertaken on this issue by BC Hydro indicates that should river diversion not be completed as scheduled, a year-long delay would occur…” That one-year delay, Clark wrote, was expected to cost BC Hydro customers $600 million.

Evictions for Highway Construction Hang in Balance

The Boon’s third-generation farmhouse, in an area of the valley known as Bear Flat, was expropriated by the B.C. government last December for a new Site C highway route that local First Nations say will desecrate an aboriginal burial site that may contain the bodies of people who succumbed to the 1919 flu pandemic while at a traditional winter encampment at Bear Flat.

The First Nations, along with the Peace Valley Landowners Association, representing 70 people whose properties would be impacted by Site C, have requested an alternate shortlisted route for the highway. They have also repeatedly requested details about the comparative costs of the shortlisted routes, which have not been released by the Transportation Ministry or BC Hydro.

The Boons were given permission to remain in their home until May 30, after the provincial election. That deadline was subsequently moved to June 30 and then to July 15 and now to July 23, leaving the Boons and their neighbours on tenterhooks as they wait to hear if they can stay in their farmhouses, which are now legally owned by BC Hydro.

Site C’s main civil works contractor — a partnership that includes the Alberta corporation Petrowest, Korea’s Samsung C&T and a Canadian subsidiary of the Spanish conglomerate Acciona — has “experienced delays on several of their critical path activities, requiring a re-sequencing of planned work,” according to the report.

BC Hydro declined to answer questions about the report, which states that Site C remains on budget and on track to be completed in November 2024 despite the late and at risk milestones.

“Any cost impacts to BC Hydro associated with rescheduling activities can be managed from existing allocated contingency budgets,” says the report.

The report also notes that the Site C project had spent $482 million more by March 31 than was anticipated for that date when the project gained final B.C. government approval in late 2014.

But adjustments made to Site C’s most recent service plan — a three-year spending plan — show that the project actually spent $93 million less than anticipated by that date.

The savings, according to BC Hydro, are related to a “shift in expenditures” into other reporting periods. Details were provided confidentially to the BCUC but have been withheld from the public.

“Many questions remain surrounding the cost of Site C,” Green Party leader Andrew Weaver told DeSmog Canada.

“It is egregious that the most expensive taxpayer-funded project in B.C.'s history has not undergone review by BCUC to determine whether this project is in the interests of British Columbians,” Weaver said in an e-mailed statement.

The NDP and Greens have said they will send Site C for BCUC review as soon as the new government is in place next week.

Muskrat Falls, Keeyask Dam Costs Escalate

Adjustments to Site C’s spending timeframe come as the people in charge of building the other two large dams currently under construction in Canada — the Keeyask Dam on Manitoba’s Nelson River and the Muskrat Falls dam on Labrador’s Churchill River — disclose that both projects are significantly over budget.

The bill for the Muskrat Falls dam — called a “boondoggle” by the CEO in charge of building it — jumped by another $1 billion last month and is now pegged at $12.7 billion. The dam will produce roughly three-quarters of Site C’s energy.

The price tag for the Keeyask dam — which will produce 695 megawatts of power compared to Site C’s projected 1,100 megawatts — jumped by $2 billion this year, to $8.7 million. 

Muskrat Falls is expected to tack an extra $150 onto the monthly hydro bill of every household in Newfoundland and Labrador. Rate increases for Manitobans as a result of the Keeyask dam’s escalating price tag have not yet been determined, although news reports say they will be in the double digits.

Former BC Hydro CEO Marc Eliesen has called Site C a “big white elephant” that will lead to significant hydro rate increases.

BC Hydro’s report also notes that three Site C “material risks” have increased this year — construction execution, geotechnical risks and environmental non-compliance.

“Unknown or changes to geotechnical ground conditions is a risk impacting the schedule and cost,” states the report. 

The “First Nations” material risk to Site C decreased this year, as a result of Site C impact agreements with the Doig River First Nations and the Halfway River First Nation, according to the report.

The risk of interest rate variability also decreased, and the $1.4 billion in interest that will be accrued during Site C’s construction period remains unchanged.

The report notes that “identified risks are being managed and treatments are in place or planned.”

Photo: Garth Lenz, Site C dam construction, fall 2016.

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Residents of Newfoundland and Labrador are preparing for electricity rates to double in the next five years, adding an estimated $150 per month in power costs for the average homeowner, as a consequence of building the Muskrat Falls hydroelectric dam — and experts warn it could be a cautionary tale for British Columbia.

“Muskrat Falls was not the right choice for the power needs of this province,” public power company CEO Stan Marshall told the press last year, confirming the project is a “boondoggle.”

“It was a gamble and it’s gone against us.”

Meantime in British Columbia, debate continues over whether to continue building the 1,100 megawatt Site C hydro dam on the Peace River, estimated to cost $9 billion, at a time that power demand has been essentially flat for 10 years, despite population growth.

“There are a lot of parallels between British Columbia and Newfoundland,” David Vardy, former CEO of the Newfoundland Public Utilities Board, told DeSmog Canada. “There’s the same fixation with the megaproject.”

B.C. Premier Christy Clark has vowed to get the project past the “point of no return,” while provincial NDP leader John Horgan has promised to send the project for a review of costs and demand if elected in May.

Vardy, who led Newfoundland’s public utilities board from 1994 to 2001, has called for a public inquiry into the Muskrat Falls dam.

Review Panels Called For Further Study of Dam Economics

In an interview with DeSmog Canada, Vardy pointed to several similarities between Muskrat Falls and the Site C dam.

For starters, the joint federal-provincial environmental panel that reviewed Muskrat Falls concluded there was not sufficient evidence the dam was the best and least cost project for the province and called for an independent analysis.

“There were a lot of fundamental questions that were raised about the justification for the project,” Vardy said. “The joint panel warned against proceeding with this without doing a very in-depth review.”

In British Columbia, the Site C panel’s finding was nearly identical, calling for further study of capital costs and electricity demand — a recommendation that was ignored much to the chagrin of the panel’s chair Harry Swain.

“The thing that’s in common … is that we’re dealing with large crown corporations. And these crown corporations are very close to government. They are seen to be instruments of government policy,” Vardy said.

Experts have questioned whether BC Hydro and the Premier’s Office are too close for comfort.

Both Dams Skipped Full Review By Utilities Boards

Despite the panel recommending otherwise, the Newfoundland government didn’t send Muskrat Falls for a full review by its public utilities board. In B.C., the government also ignored the panel’s recommendation for a review by the B.C. Utilities Commission.

“In the normal course of events it would have gone to the public utilities board and they would have done an exhaustive analysis of all the options and they would have looked at costs,” Vardy said.

Former Newfoundland Premier Roger Grimes told DeSmog Canada that B.C. should still send Site C for a full review by the B.C. Utilities Commission.

“There’s no doubt: once you short-circuit the public review process, there’s something wrong,” Grimes said. “If it can’t withstand that kind of proper review in the proper public forum, history has shown us that there’s probably something wrong with it.”

Grimes said if it’s the right project, the B.C. government shouldn’t fear the outcome of a utilities commission review.

“If they have information that has them as the government so convinced that it’s the right thing to do, then any independent panel that looks at it should come to the same conclusion with the same information,” Grimes said.

In Newfoundland’s case, the government did seek the opinion of the Public Utilities Board, but the terms were limited to examining two options and alternatives couldn’t be considered. Still, the utilities board found the evidence presented was not complete or current enough to support the project. Newfoundland forged ahead anyway.

“The government commissioned a whole flurry of consulting studies,” Vardy said. “Consultants were charged to demonstrate that what the government wanted to do was the correct thing. There was no independent testing. There was no cross-examination. It was all contrived to create a business case for a project that made no sense from the beginning.”

ICYMI: The Startling Similarities Between Newfoundland’s Muskrat Falls & BC’s #SiteC Dam #bcpoli #cdnpoli https://t.co/ZgO61VLVx2 pic.twitter.com/chdEs51cKh

— DeSmog Canada (@DeSmogCanada) August 18, 2017

Lack of Checks and Balances

Democracy only works with checks and balances, Vardy said.

“What we have is a strong crown corporation, which is overbearing and spends enormous amounts of money. It has infinite communications resources. It has infinite money for studies,” he said. “They’ve basically backend loaded the project so the people in 50 years time will still be paying off this project.”

In British Columbia, BC Hydro has tried to stifle critical media coverage and has conceded that residents will be paying for the Site C dam for 70 years — until 2094.

“By the time the Site C hydroelectric dam is paid off, fusion or some other energy advancement might already have made it obsolete,” Nelson Bennett wrote in Business in Vancouver.

Grimes has said the legacy of Muskrat Falls will haunt Newfoundlanders for generations.

“This is the biggest mistake that Danny [Williams] ever made, by far, and will haunt all of us, unfortunately, for the rest of my life, my daughter’s life, my granddaughter’s life even,” Grimes told CBC.

Questions About Power Demand

Stan Marshall, the incoming CEO of Newfoundland’s public power utility, Nalcor, announced last year that load growth estimates had been vastly exaggerated and the cost of the project had escalated to $11.7 billion, from $6.2 billion in 2010.

In B.C., questions about demand for Site C’s power on the current timeline have been raised by review panel chair Harry Swain, former CEO of BC Hydro Marc Eliesen and former premier Mike Harcourt.

BC Hydro argues that B.C. will need new power to meet the needs of a growing population. This is where the provinces diverge as Newfoundland is not projecting any population growth.

However, B.C.’s power demand has stayed flat for the past 10 years despite a growing population, due in part to the shutdown of several industrial pulp mills, which are large consumers of electricity. Efficiency improvements for things like appliances and light bulbs also decrease demand.

“Hydro’s demand forecasts are persistently and systematically wrong,” Swain wrote in an affidavit to a federal court last year. “There is no reason to believe that much new power, if any, will be required in the next 20 to 30 years.”

In the 2012 load forecast used for decision-making by the B.C. government, BC Hydro predicted nine per cent growth in power demand over the next four years. It dropped by one per cent.

However, if B.C. electrifies its economy, including transportation, to fight climate change, B.C. will need more electricity, argues Mark Jaccard, former head of the B.C. Utilities Commission and professor in the School of Resource and Environmental Management at Simon Fraser University.

That said, it’s important for demand forecasts to be reviewed by the utilities commission, Jaccard told DeSmog Canada.

“We ran into this where the politicians will lean on people in Hydro to give a different forecast because it will justify whatever they wanted to do,” Jaccard said of his time at the helm of the utilities commission between 1992 and 1997.  “It’s always tricky when the utility is publicly owned.”

“If we’re going to act on climate, we need a lot of electricity. But we don’t need the Site C dam to get that electricity. We could get it other ways too,” he said.

Out of Sight, Out of Mind

Another thing Muskrat Falls and Site C have in common is that they’re located in remote areas with very small populations.

“On the island, in St. John’s, it’s been kinda out of sight, out of mind,” Vardy said. “Until such time as people see it show up in their electricity bills, most people are fairly oblivious to these impacts.”

Power rates in Newfoundland are now projected to rise from 11.5 cents per kWh to 21.5 cents per kWh when the dam comes online in 2020.

“It’s a very precarious situation where the interest on the public debt is now costing more than what we’re spending on our schools,” Vardy said.

Newfoundland is relying on exporting excess power at spot market prices, which are a fraction of the cost of producing the power —  also part of the plan in B.C.

“Ninety per cent plus of the burden is placed on consumers in this province. That is the core problem,” Vardy said about Newfoundland.

Rate increases in B.C. will depend on the final cost of constructing the Site C dam, domestic demand for power and the ability of B.C. to export excess power.

‘Blinded By the Sunk Costs’

Muskrat Falls is now beyond the point of being stopped, according to Vardy. But he argued for years that it could have been stopped, even though it had begun construction.

“You can’t do anything about sunk costs. You’ve got to weigh the future costs of stopping against the future costs of continuing. They kept being blinded by the sunk costs,” Vardy said.

Vardy’s advice to British Columbia is to “go back to the public utilities board and take this thing apart and see if it makes any sense.”

“If there’s no business case, it should be stopped because it’s going to be a burden on future generations.”

Escalating Costs

In particular, Vardy warned there needs to be a process in place to stop construction if costs escalate.

“That’s exactly what should have happened here. We should have said: ‘Things have changed. Circumstances have changed.’ ”

An Oxford University study in 2014 found that large dams suffer average cost overruns of 96 per cent and delays of 44 per cent.

Commenting on Premier Christy Clark’s vow to get Site C “past the point of no return,” Vardy said: “That’s not good public policy. What you want to do is do the right thing. If it doesn’t make sense to do the project, then it should be stopped.”

He pointed to the problem of politicians getting too attached to projects.

“They’re looking at this as a legacy project and they’re focused on their own egos and their hubris. And this is what happened here. And it sounds like the same thing is happening in British Columbia.”

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