Wade Davis: Industrial folly and the fate of northern British Columbia

My father came of age in the 1930s, the son of a doctor in the lead-zinc mining town of Kimberley in the East Kootenays. To reach his boarding school on Vancouver Island, he would take a boat downriver to Spokane, Washington, where he could catch a train west for Seattle and the coast. Such was the state of infrastructure in British Columbia at the time — an economically debilitating void that men of my father’s generation sought avidly to fill as they came back from war in 1945.

The master architect was W.A.C. Bennett, premier from 1952 to 1972, another son of a small interior town, whose vision for the province embraced public works projects on a gargantuan scale, viewing each as an almost biblical challenge, a triumph of personal will. As his political rival and later ally “Flying Phil” Gaglardi laced the province with bridges and roads — many through lands conveniently owned by his sons — Bennett stamped his name on the largest construction project in the history of the province, one of the world’s highest earth-filled dams, a $6 billion investment (in today’s dollars) that flooded 350,000 acres of forested land, displacing, without consultation, the entire Tsay Keh Dene First Nation, a people who have yet to recover from the blow.

W.A.C. Bennett, like most of his peers, believed that any natural resource not used was wasted. Modern industrial logging took off during his tenure, driven by new machinery and technologies, and fuelled by a triumphant ideology that called for the elimination of all primary forests in the province. Science, it was said, had shown that the annual increment of cellulose in a young tree plantation was greater than that in an ancient forest. The old growth was, by definition, a forest in decline: the trees were over-mature. To see evidence of decadence, one had only to look at the deadfall, tons of rotting timber wasted on the forest floor.

Forest clearcut near Port Renfrew, British Columbia. Photo: TJ Watt

The goal of proper management was to replace these inefficient stands with fresh and productive new forests. A regime of carefully monitored clear-cut logging would eliminate the old growth, the debris would be burned and the land would be sown with uniform plantations comprised of only the most up-to-date conifer seedlings. In short, scientific forestry would clean up the mess inherited from nature. If it served the economic interests of industry by rationalizing the wholesale eradication of the old-growth forests of the province, so much the better.

Men like my father shared W.A.C. Bennett’s frontier values, honed by the Great Depression, forged years before the word “ecology,” let alone “biodiversity,” “sustainability,” “biosphere” or “climate change,” had entered our vocabulary. In the early 1960s, just getting people to stop throwing garbage out of a car window was considered a great environmental victory. To look back at that era is not to judge, but merely to suggest that we now live in a completely different time and that to allow such values of the past to determine public policy today would be as inappropriate as anchoring our future in the convictions of nineteenth-century clergymen who claimed with absolute certainty that the earth was but 6,000 years old.

To look back at that era is not to judge, but merely to suggest that we now live in a completely different time and that to allow such values of the past to determine public policy today would be as inappropriate as anchoring our future in the convictions of nineteenth-century clergymen who claimed with absolute certainty that the earth was but 6,000 years old.

And yet, as the recent decision on the highly controversial Site C dam suggests, this is precisely what we’ve done and continue to do throughout the northern reaches of the province.

That federal and provincial governments have squandered hundreds of millions of dollars on unrealized mega-development schemes may come as a surprise to many urban Canadians for, much as we like the idea of the North, few of us ever go there. Gordon Campbell in his decade as premier, and indeed in his entire life, never once visited the northwest quadrant of British Columbia, even as his government endorsed and funded capital-intensive initiatives that promised to fundamentally transform the region.

To appreciate the extent of these ambitions, not to mention the fiscal and environmental consequences of implementation and failure, consider the fate of just five industrial projects, all transformative in scale, that have been proposed or enacted in northwest British Columbia since the late 1960s. All of these centred in the Stikine Valley, traditional territory of the Tahltan First Nation, a vast and remote region roughly the size of Switzerland.

Five megaprojects in the Stikine Valley

The first of these projects, and the only one to come on line and reach the end of its life, is Cassiar Asbestos, which declared bankruptcy just before shutting down in 1992. For 40 years before its closure the mine had thrived as the one industrial magnet for infrastructure development and employment in a region the size of Oregon.

A company town of 1,200, Cassiar attracted workers by offering easy access to home ownership and by supporting an active civic culture along with all the facilities of a regular town, a movie theatre, two churches and two schools, a small hospital, a ski hill and curling rink, a library and a recreation centre. The Lion’s Club and PTA met regularly in a company hall where members of the handicraft, bridge, badminton and gun clubs also gathered. There were hockey teams and choirs, boy scouts and girl guides.

When the mine closed, every structure was dismantled or moved. Those who had made a home there, some for two generations, simply scattered to the winds. Today, Cassiar is a ghost town of fading memories. All that remains is a mountain of toxic tailings, 16 million tons altogether.

The 1970s brought two megaprojects to the Stikine, both of which, in the memorable words of filmmaker Monty Bassett, ultimately collapsed under the weight of their own stupidity. In 1969, BC Rail decided to extend the provincial railway in Nak’azdli Whut’en territory some 540 kilometres from Fort St. James northwest to Kaska Dena lands at Dease Lake, an arbitrary destination that consisted at the time of just a handful of broken-down structures once owned by the Hudson’s Bay Company. The rationale was to open up the country for resource extraction, notably the extensive anthracite deposits underlying the headwaters of the Skeena, Stikine and Nass Rivers, a region known today as the Sacred Headwaters.

Today, Cassiar is a ghost town of fading memories. All that remains is a mountain of toxic tailings, 16 million tons altogether.

Construction of the Dease Lake extension began in 1970, but costs soon soared to $360 million ($1.5 billion today), five times the original estimate. When, in 1977, amidst considerable controversy, the project was abandoned, the rail grade reached as far as Dease Lake, but only the first 84 kilometres at the southern end were operational. A Royal Commission established to review the project revealed not only massive cost overruns but also shoddy construction from one end of the line to the other, a consequence, in part, of W.A.C. Bennett’s imposed mandate to build the project at “minimum cost/maximum speed.” Today the grade, locally dubbed the “railway to nowhere,” serves as the most expensive backcountry mountain bike trail in the world.

Even as the provincial government struggled with the political fallout of the collapse of the Dease Lake extension, BC Hydro was gearing up to build a massive hydroelectric development in the canyons of the Iskut and Stikine Rivers. Three dams were planned for the Iskut, and two on the Stikine, including Site Z, a concrete arch dam projected to soar as high as a 75-story building. Together the Stikine dams were expected to completely inundate Canada’s largest and most dramatic canyon, destroying a stretch of wild river known throughout the world as the K2 of white water challenges. The cost of the project was a staggering $7.6 billion ($46 billion in 2017 dollars), making it the biggest capital project ever conceived by BC Hydro.

By project design the Site Zed reservoir would reach up the Stikine and drown the new railway bridge that had only just been completed at considerable expense as part of the BC Rail Dease Lake extension, an indication of just how little coordination occurred between government entities responsible for these enormous industrial projects.

Today the ‘railway to nowhere,’ serves as the most expensive backcountry mountain bike trail in the world.

Despite BC Hydro’s dire predictions that, without the Stikine/Iskut dams, the province would face severe shortages of electricity, the project stalled, though not before tens of millions of dollars had been spent. What saved the canyon was both strong local opposition from the Tahltan First Nation and a fortuitous shift in the corporate culture at BC Hydro that resulted in a new public focus on efficiency and conservation. The power shortages long anticipated by proponents of the dams never materialized.

The two final examples — Christy Clark’s dream of an LNG-driven economy and the saga of the Northwest Transmission Line (her “powerline to nowhere”) — leave little doubt that industrial folly conflated with corruption persists to this day. Indeed, one is left to wonder what, if anything, has been learned from the costly debacles of the 1970s, even as we continue to elect politicians cut from the same ethical cloth as “Flying Phil” Gaglardi.

Whatever one’s views of the virtues or challenges of the energy sector of the economy, Clark’s failure after such fanfare to bring online even a single LNG development was notable. Now that LNG Canada’s investors have decided to move forward under the Horgan government, Kitimat is in for a boom while northeastern B.C. can anticipate increased pressure to frack for gas to feed the export plant. 

Finally, we come to perhaps the most disturbing of all these megaprojects, though one that, on the face of it, ought to have been the least controversial — the extension of the provincial power grid through the construction of the 344-kilometre, 287-kilovolt Northwest Transmission Line from Terrace to Bob Quinn Lake.

In 2008, the Mining Association of BC released an industry survey estimating that $15 billion in new capital investment leading to 10,000 full-time jobs might be generated if only power on an industrial scale could be delivered to the mineral-rich northwest quadrant of the province. Premier Gordon Campbell immediately set aside $10 million to kick-start the environmental assessment.

Rationalizing the costs of the investment, initially budgeted at $400 million, were a series of large industrial projects in different stages of development, all promising and all in Tahltan territory. These included Imperial Metals’ open-pit copper and gold proposal on Todagin Mountain; two similar mines at Galore Creek and Shaft Creek, respectively; a run of the river hydro project at Forest Kerr canyon; Shell’s million-acre coalbed methane tenure in the Klappan; and Fortune Minerals’ anthracite claim, also in the Klappan.

Even as the premier launched the initiative, Byng Giraud, then vice-president of the Mining Association of BC, cautioned that all these “big-ticket items were more a wish list than anything certain,” adding that “nobody should necessarily go to the bank on this.” Unfortunately, someone did — the B.C. taxpayer, although she/he didn’t know it at the time.

Within two years the projected cost of the Northwest Transmission Line had increased by half; eventually, it would come in at $736 million. In addition, BC Hydro committed to reimburse Imperial Metals $52 million for the costs of building the company’s dedicated line from Bob Quinn to the Red Chris mine site on Todagin Mountain as well as the costs of a smaller line north to the Tahltan community of Iskut.

View north across Todagin Plateau and the pit of the Red Chris mine. Photo: Garth Lenz / The Narwhal

Of this $736 million, Alta Gas, owner of the Forrest Kerr project, would by agreement pay $180 million. In Ottawa, the Harper government agreed to invest $130 million from the Green Infrastructure Fund, money set aside, according to the government website, to support “projects that will improve the quality of the environment and … that promote cleaner air, reduced greenhouse gas emissions and cleaner water.” The official rationale for the inclusion of the $130 million was Ottawa’s desire to get 350 Tahltan at the small community of Iskut off of diesel generation to reduce their carbon footprint, albeit at a per-resident cost of close to $400,000. Even with this questionable federal subsidy, B.C. taxpayers remained on the hook for at least $478 million.

For the provincial government things began to unravel just as construction of the transmission line was coming to an end. In 2012, Shell withdrew from its coalbed methane development in the Klappan. The promising and highly promoted Galore Creek copper and gold project imploded due to fiscal challenges and uncertainties. Fortune Minerals remained committed to its anthracite play in the Klappan, but, given Tahltan opposition, it had very weak legs, especially in the wake of the Supreme Court’s Tsilqot’in decision.

Alta Gas’s hydro project at Forrest Kerr was a going concern. But the public was going to be hard pressed to understand why well over $700 million of public funds were spent to extend the provincial grid to facilitate a private power company’s efforts to sell back electricity to the state. By 2012, of the five other speculative industrial projects that had rationalized the construction of the transmission line back in 2008, only one remained viable — Imperial’s Red Chris mine on Todagin Mountain.

The powerline to nowhere

There is most assuredly nothing wrong with governments creating infrastructure that will promote economic growth or bring benefits to a wide range of citizens and diverse business interests. But things get a bit murkier when the benefits accrue exclusively to one sector of the economy. And they become downright muddy when they effectively benefit a single company, especially one owned by an individual who has heavily bankrolled the political campaigns of the government authorizing the massive public expenditure. 

Here was another challenge for the provincial government. Imperial’s Red Chris project had been kept afloat by the personal investment and loan guarantees of Murray Edwards, owner of the Calgary Flames. His infusion of some $200 million had effectively bought him ownership of Imperial.

On the eve of the 2013 provincial election, with the Liberals behind in the polls, at the Calgary Petroleum Club Edwards hosted a private dinner for Premier Christy Clark that raised $1 million for her campaign. Nothing illegal in this, but it was hardly something to reassure the B.C. public, given that Red Chris was the only industrial project aside from Forrest Kerr to benefit from construction of the Northwest Transmission Line.

Yet even here the optics for the government were problematic. Todagin is home to the largest concentration of Stone sheep in the world, a resident population that attracts remarkable numbers of predators. A wildlife sanctuary in the sky, the massif looks west to Edziza, sacred mountain of the Tahltan; north to the Grand Canyon of the Stikine; and east to the Sacred Headwaters, birthplace of the Stikine, Skeena and Nass Rivers; and beyond to the Spatsizi, widely recognized as the Serengeti of Canada.

There are more than 4,000 copper properties in the world. To build an open-pit mine on Todagin was as audacious an undertaking as drilling for oil in the Sistine Chapel.

But consider the provincial government’s dilemma. Some $800 million had been spent to build what was effectively a subsidized line for a single mine. At the same time the government had to have a successful mine at Red Chris to avoid accusations of having built a “powerline to nowhere.” In the 1970s, the collapse of the Dease Lake extension of BC Rail, the so-called “railway to nowhere,” had brought down a government.

To build an open-pit mine on Todagin was as audacious an undertaking as drilling for oil in the Sistine Chapel.

If the optics of Red Chris were already poor, public perception became truly dreadful in the wake of the Mount Polley disaster in August 2014 — a catastrophic failure of the tailings dam at Imperial’s other major holding, an open-pit copper and gold mine near Quesnel Lake that had been promoted by the company as the design prototype for the Red Chris development. Altogether, 10 million cubic metres of industrial water and 4.5 million cubic metres of slurry tainted with heavy metals surged into one of the most celebrated salmon lakes in the world, the place of origin of fully one-quarter of the Fraser River run.

In the wake of the Mount Polley disaster there was a strong sense in Iskut and, indeed, throughout British Columbia that Red Chris would be put on hold at least until the cause of the failure at Mount Polley was fully determined and corrective measures established and implemented. In fact, quite the opposite occurred. Just six months after the disaster, and within days of the release of a report that was, by every measure, damning, the Red Chris mine received an interim permit to begin processing copper and gold ore using the same wet tailings design that had failed at Mount Polley.

After two years in operation, with the eastern plateau of Todagin and the entire upper Todagin River drainage transformed into an industrial zone, the fate of the Red Chris mine remains uncertain. In December 2017, a leading credit rating agency, Moody’s Investor Service, assessed Imperial Metals’ “probability of default” and concluded that the company was “judged to be speculative, of poor standing, subject to very high default risk and may be in default on some, but not all, of their long-term debt obligations.” According to the latest report of British Columbia’s chief minister of mines, Imperial Metals has but $73 million set aside in bonds against estimated reclamation costs for its mines of $103 million.

Should Imperial fail to cover its debt obligations and be forced to default, the costs of reclamation and clean-up of all of its projects will fall to the people of British Columbia.

Site C dam a new chapter in B.C. white elephants

In the end, we are surely left overwhelmed by the scale of the corruption, the extent of the folly and the aggregate waste of taxpayers’ wealth. And yet it all continues. Consider the ill-fated Site C dam on the Peace River. Conceived by the Liberal government, the pharaonic, partially built hydroelectric project had already cost more than $2 billion when inherited by the NDP upon its election in May 2017.

Politically it presented a true challenge of leadership. Premier John Horgan had to decide whether to spend $2 billion to clean up a $2 billion mess inherited from the previous government or go ahead with the project, mortgaging the province’s future for a white elephant that few wanted and, according to many technical reports, nobody needed.

In the end, succumbing to pressure from the NDP base, including powerful unions, Horgan took the politically expedient decision to proceed with Site C, despite anticipated costs well in excess of $10 billion, all for a project that, on the campaign trail only months before, he had vociferously rejected for sound economic, technical and environmental reasons.

If many British Columbians were disappointed by his decision, many more were stunned to learn that the Liberal government of Christy Clark had committed the province to such industrial folly in the first place.

Silenced in the shuffle were any number of authorities, Indigenous and non-Indigenous alike — engineers, technicians, hunters and trappers, economists, farmers, ranchers, guides, environmentalists, lawyers and owners of small businesses — who had argued persuasively that the dam was both unnecessary and certain, over time, to be a drain on the provincial economy. The voices that were heard differed little, both in their values and priorities, from those of all these long-forgotten men who, in their enterprise and unshakeable confidence, left as their legacy the many industrial fiascos that litter the landscape and taint the history of the North.

Site C construction, July 2018. Photo: Garth Lenz / The Narwhal

For too many years politicians in all parties in British Columbia have told the people of the province that the only way we can generate an economy is to tear open our land, tear down our forests and empty our seas. Such tired and threadbare thinking both denies our potential and betrays our destiny. We are so few and we live in a place that is so vast. We are civil, decent and among the most educated citizenries in the world. Our intellectual and entrepreneurial capacity is limitless. When politicians suggest that the only way we can make a living is to compromise our natural heritage, what is revealed is not a lack of economic options but, rather, a dearth of imagination and moral character on the part of those we elect to office.

When politicians suggest that the only way we can make a living is to compromise our natural heritage, what is revealed is not a lack of economic options but, rather, a dearth of imagination and moral character on the part of those we elect to office.

Political leaders thinking not of the next election but of the next generations know that true and lasting prosperity in British Columbia will only come as we transform our economy from one dependent on natural resource extraction to one based on knowledge, technology and innovation.

Market forces are already driving us in the right direction. Information technology and biotech, together with media and film, are now dominant elements in the economy of the Lower Mainland, home to the great majority of British Columbians. Tourism throughout the province employs more workers than mining, industrial forestry and commercial fishing combined. Government can play a significant role with wise and cost-effective investments in education, infrastructure, affordable housing and virtually anything that will enhance quality of life, making the province ever more desirable for individuals and businesses aspiring to occupy the heights of the new knowledge-based economy.

What we don’t need are governments beholden to individuals and enterprises entrenched in the past and blind to the world coming at them from tomorrow. With the extension of the Northwest Transmission Line the Liberal government spent $750 million of public funds on a powerline that has largely benefitted a single mine employing but 300 people, an industrial project that, by design, implied the violation of perhaps the richest wildlife sanctuary in the province. That same level of investment would have allowed Vancouver to extend the SkyTrain from Burnaby to Point Grey, enhancing the well-being of millions of British Columbians, and the prosperity of hundreds of independent and self-sufficient businesses, not one of which would even imagine seeking or receiving government subsidies comparable to Christy Clark’s singular gift to Imperial Metals.