Common Sense Canadian

Seth Klein finds cracks in Site C Dam economics

PostedJanuary 18, 2018 by in Western Canada

Seth Klein, B.C. Director of the Canadian Centre for Policy Alternatives

Check out this January 17, 2018 opinion piece from Seth Klein in The Georgia Straight, debunking the economic argument in favour of building Site C Dam.

There is no question that the new B.C. government’s decision to proceed with the Site C dam was a very difficult one. The previous government left it with a poison pill. With $2 billion already spent, the Horgan government faced a no-win choice, with substantial political and economic costs for either terminating or proceeding with what is one of the largest and most expensive capital projects in B.C. history. I don’t envy them.

But count me among those who believe the wrong decision was made.

In a difficult decision like this one, it matters who gets listened to, whose expertise wields authority, and what considerations win the day. That’s why unpacking this decision matters—so we can consider how progressives might shake up the framework by which future decisions are made…

…The Canadian Centre for Policy Alternatives’ Marc Lee, in his submission last summer to the B.C. Utilities Commission, outlined why he felt the electricity Site C will provide is not needed. Indeed, our contention for many years has been that what was truly driving the push for Site C was the natural gas industry’s demand for electricity—both for fracking operations and, down the road, to electrify the process of liquefying that gas. Meaning it was primarily about producing “clean” energy in service of dirty fossil fuels, and it still might be…

Notably, when Premier John Horgan made the announcement that the government would proceed with Site C he appeared decidedly unenthusiastic. Make that downright miserable. He made clear that Site C was, at its outset, a wrong-headed policy choice, and not a project his government would have started. But with $2 billion spent and reclamation costs of termination pegged at $1 to $2 billion more (likely the low end), the premier felt his government had “no choice” but to proceed.

Granted, the prospect of spending $3 to $4 billion and having nothing to show for it hurts.

But the government went further, stating that absorbing such a bill would put its progressive economic and social agenda at risk. Some ministers expressed the view that termination costs would threaten B.C.’s Triple-A credit rating and would consequently drive up our debt-service costs. Minister Michelle Mungall, in an email sent to those who wrote to her about Site C, stated, “To do anything but move forward would require British Columbians to take on $4 billion in debt that would have to result in massive cuts to the services people count on us to deliver. After witnessing the legacy of BC Liberal cuts, I can’t allow that to happen again” (emphasis mine).

This line of argument may sound compelling. But on closer inspection, it is not at all convincing.

Read more here.



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