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B.C. government lets $10.7-billion Site C hydro project go ahead, with regrets

The B.C. NDP government gave the green light to the $10.7-billion Site C project Monday. Opponents of the project have already responded with promises of legal action and continued resistance, while supporters said it’s time to move on.
The Site C Dam location is seen along the Peace River in Fort St. John, B.C., on April 18, 2017. British Columbia Premier John Horgan will be giving his government's decision on the future of the controversial Site C hydroelectric dam this morning. THE CANADIAN PRESS/Jonathan Hayward

The B.C. NDP government gave the green light to the $10.7-billion Site C project Monday.

Opponents of the project have already responded with promises of legal action and continued resistance, while supporters said it’s time to move on.

Premier John Horgan said a “torn” cabinet decided that the hydroelectric dam project, which saw construction begin in summer 2015 under the previous B.C. Liberal government, was past the point of no return.

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

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

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

After nine hours of deliberation, cabinet’s decision came down to math: How much money has been spent and how much remains to be spent, compared with the cost of getting energy elsewhere.

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

Cancelling the project would mean a 12 per cent rate hike in 2020 that would last for 10 years, costing an extra $198 per year for an average single-family home on Vancouver Island.

Continuing would mean a 1.1 per cent increase in 2025 and 2026 under a rate-smoothing scenario over 10 years, government officials said.

Those figures are on top of the 30 per cent rate increase already promised over the next 10 years.

Cancelling Site C could also mean creating the province’s largest deficit, destroying the province’s credit rating and wiping out 80 per cent of B.C. Hydro’s equity, the officials said at a technical briefing.

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

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

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

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

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

In a Nov. 1 report to the government, the B.C. Utilities Commission said the dam is on track to meet neither its $8.3-billion budget nor the 2024 completion date. It pegged the likely cost at more than $10 billion, but did not give a recommendation to cancel or continue the project.

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

A federal court dismissed their legal challenge in January, but the nations believe the utilities commission’s report strengthens their case.

Chief Roland Willson of West Moberly First Nations called the decision to continue with Site C “shortsighted.”

“If they cancelled it, by the time the next election came around, I bet you nobody would even remember,” he said. “They had everything in front of them to make the proper decision and they failed.”

Ken Boon, president of the Peace Valley Landowner Association, said he was “very disappointed” by the decision. “We’ve had a lot of setbacks along the way and I would say this is the worst one,” he said. “But, having said that, we’ve always somehow bounced back, so I don’t know what’s going to happen moving forward.”

Boon predicted that opponents will continue to fight the decision and that the NDP will feel the effects for a long time. “I’m amazed at how many phone calls and emails I have received from NDP party members in the last few weeks stating that if John Horgan moves forward with this project, they’re done with the party.”

Mike Bernier, Liberal MLA for Peace River South, said moving forward was the right decision and the review had created unnecessary uncertainty. “Today’s announcement by the NDP is the right one,” Bernier said.

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

Tracy Redies, B.C. Hydro critic for the Liberals, said the party is concerned that the review meant some contracts were delayed, such as the realignment of Highway 29. “We’re concerned about what that means going forward, in terms of the cost of this project.”