Gary Mason: Site C is a disaster in the making

20 October 2020

Of the many issues awaiting the next government of British Columbia, none is more vexing and politically fraught than the Site C dam project.

On its present course, it has the potential to be the greatest financial disaster in the province’s history. And all indications are it will be John Horgan and the New Democratic Party who will have to make some enormous, financially consequential decisions related to the problem-plagued undertaking.

Before calling the current election, which concludes Saturday, Mr. Horgan ordered an investigation into the current trajectory of the project and the consequences that its myriad challenges are expected to have on final costs and timeline.

That report is expected in the next few weeks. It will almost certainly contain bad news. The question is whether it will be bad enough to cause the government to consider cancelling it, despite the billions that have already been invested – and the billions more yet that it would cost to halt it in its tracks.

Mr. Horgan had, until recently, steadfastly rejected any notion of killing the project and taking the losses. However, pressed on the campaign trail by Green Party Leader Sonia Furstenau, he opened the door to that possibility.

In referencing the report that is coming, Mr. Horgan said, “We’ll take a good hard look at the evidence, and if the science tells us and the economics tells us it’s the wrong way to proceed, we’ll take appropriate action.”

While that statement may have buoyed the hearts of thousands opposed to the dam, cancelling it at this juncture seems unimaginable. On the other hand, the thought of a cataclysmic failure of the dam’s wall down the road – not to mention the small army of engineers from BC Hydro that is already working, right now, to triage the dam – must keep Mr. Horgan up at night.

The problem is the soft sedimentary shale that underlies the construction site. Harvey Elwin, one of the country’s most experienced dam engineers, has observed that he’s never seen such appalling foundation conditions for a project of this scale. Documents recently obtained by Ben Parfitt of Canadian Centre for Policy Alternatives (CCPA) have revealed that a decision to pour massive amounts of concrete to build a buttress before a critical water-drainage tunnel was completed “could cause the notoriously unstable shale rock to move even further.” Several prominent British Columbians and the former chief executive officer of BC Hydro, Marc Eliesen, have called for the project to be stopped until an independent team of professionals can assess the situation.

BC Hydro has been less than upfront (to put it mildly) about the problems the project is experiencing. The whole thing has the feel of an issue that is growing in ugly complexity every day, the ramifications of which are enormous for the provincial treasury.

Site C started out as a concept that would cost $3.5-billion. When plans became more serious, the price tag was changed to $6.9-billion. By the time the BC Liberals approved it in 2014, the estimate rose to $8.8-billion. When the NDP took over in 2017, it ordered a project review by the B.C. Utilities Commission, but by that point, almost $2-billion had already been spent. It was determined that if the project was cancelled at that point, it would cost another $2-billion – a $4-billion writeoff.

So the NDP decided to push on with the dam, at a revised estimate of $10.7-billion.

No one believes that will be the final tally – not by a long shot. Comparisons to Newfoundland and Labrador’s infamous Muskrat Falls dam fiasco suddenly seem not so far-fetched.

As is always the case in these matters, it will be future generations that will bear the brunt of the pain. In the case of Site C, hydro rates are going to have to rise precipitously in order to pay the bill.

And then there is the indelicate question of demand. By the time the dam is scheduled to be completed in 2025, there is expected to be little need for the power it produces. Demand will be there down the road, but it can be reasonably asked if that power could have been supplied far more cheaply, with less damage to the environment, via independent producers and alternative forms of energy such as solar or wind.

There is no question that the BC Liberals deserve enormous blame for this debacle, pushing the project to the point where most believe there was no turning back. But it’s the NDP’s problem now – and they are likely to wear this, no matter what happens.

Thanks for reading! PLEASE sign the petition to halt Site C!