Category Archives: Hydropower

On Energy & First Nations, politicians want to have their cake and eat it too

Jonathan Ramos cartoon

Canada can fight climate change and build more climate-ravaging pipelines.

First Nations’ rights should be respected – just not at the expense of these pipelines, dams and other major projects they oppose. Got it?

It’s hard to fathom, but these are the positions of our provincial and federal leaders. They want to have their cake and eat it too.

All sunshine and broken promises

Justin Trudeau after election victory (John Tavares/Flickr CC)

If the first step in dealing with a problem is admitting you have one, then Canada has made some progress on the environment and Indigenous rights – but on that score alone.

We traded climate change-denying, First Nations-bashing Prime Minister Stephen Harper for the smooth-talking, Sunny Ways Justin Trudeau. He made bold declarations about fighting climate change on the campaign trail, then in Paris, earning him accolades from around the world. He installed Canada’s first ever Aboriginal Justice Minister, Jody Wilson-Raybould, promised a “new relationship” with First Nations, and vowed to adopt the United Nations Declaration on the Rights of Indigenous People (UNDRIP).

But many of his actions have not lived up to the words. The hypocrisy is on full display for everyone to behold. For instance, he recently told The National Observer that tripling Kinder Morgan’s dilbit pipeline capacity “is an unavoidable element in a national climate plan.” Huh?

Trudeau explained his twisted logic to CBC radio’s Gregor Craigie:

[quote]First of all, we need to have a world-class oceans protection plan in place, which is why we put over $1 billion in the biggest investment in protecting the B.C. coast that there’s ever been.[/quote]

Let’s pause there a moment. Wouldn’t not adding 340 new oil tankers a year to the BC coast be an even better way to protect it? Justin continued:

[quote]Second, we have to have an ambitious plan to fight carbon emissions, to reduce carbon emissions, right across the country, which we’ve brought in with the pan-Canadian framework…And third, we need to make sure that we are getting our resources to market overseas, safely and securely.

The only way we can get any of those things is if we do all three of those things together. That’s the plan that we put in place, and that’s what we’re going to move forward with.[/quote]

Justin has tried to clarify this dizzying argument by saying that “in order to get the national climate change plan — to get Alberta to be part of it, and we need Alberta to be part of it — we agreed to twin an existing pipeline in order to get to work.” So, in order to save the climate, he cut a deal that will only damage it more. I’m sure to him, this all makes perfect sense.

The problem is not only does Justin’s pipeline program undermine his climate promises, it breaks his commitments to First Nations, many of whom vehemently oppose this planned incursion into their unceded territories.

The latest to disappoint First Nations

On the provincial stage, in recent years, both Alberta and BC have also turfed long-running right-wing governments – in their case for the NDP (and BC Greens). In BC, John Horgan campaigned on clean energy jobs and a vow to fight Kinder Morgan, nebulous though it was. He also echoed Trudeau in supporting UNDRIP, and has since doubled down on his support for First Nations and the environment in his recent throne speech.

George Heyman, John Horgan and Michelle Mungall announce their decision to proceed with Site C Dam (Photo: Government of BC)

But where the rubber meets the road, it’s been a different story.

In announcing his controversial, factually-challenged decision to continue with Site C Dam, Horgan offered, “I’m not the first leader to stand before you and  disappoint Indigenous people.” Aside from being one of the great understatements post-contact, it showed how weak his resolve really was. He might as well have said to First Nations, “I have your back…as long as it costs me nothing.”

The Horgan cabinet ministers most directly connected to the Site C decision had essentially vowed on the campaign trail to pull the plug on the project. I say “essentially” because most left themselves a millimetre of wiggle room for insurance. Lana Popham, now agriculture minister, told a Victoria crowd, “In my view, we’re nine seats away from being able to stop Site C.”

Michelle Mungall, now minister of energy and mines, declared, “…if we’re government, then our plan is to go through the B.C. Utilities Commission and we will work to end Site C…Our desire is to stop the Site C dam.”

George Heyman, now environment minister, told Treaty 8 First Nations and citizens at the Paddle for the Peace, “The dam project is wrong on every count because of its negative impact on agriculture, the environment, First Nations, clean energy commitments, economics, and the promise of jobs”.

Is it any wonder so many First Nations and British Columbians feel betrayed by these very same people’s decision to carry on with Site C?

Alberta, the oil deep state

On the other side of the Rockies, the bar was admittedly much lower, even for a new NDP government. First Nations have never really factored into provincial decision-making there and few expected the NDP to shut down the bitumen sands. But Notley did run as a fresh face for Alberta politics, promising to tackle her province’s unfair oil and gas royalties. She even brought in a climate plan that included a provincial carbon tax and a promise to phase out coal-fired electricity by 2030.

In every meaningful way though, Notley has stayed the course of her Conservative predecessors. The royalty hike was soon kiboshed. Her provincial carbon tax is too low to accomplish anything and she’ll only buy into a bigger national tax if she gets her pipelines. Pro-industry voices have come to her defence, arguing it’s still technically possible to meet Canada’s climate commitments while adding new pipelines. Can we at least agree they don’t help?

Alberta Premier Rachel Notley and Canadian PM Justin Trudeau (Photo: Premier of Alberta/Flickr)

So committed to the industry is Notley that she’s prepared to start a trade war over it, as her childish antics have shown of late.

If we take their good intentions on the campaign trail at face value, how do these leaders get sucked into the status quo once elected? Former Alberta Liberal Opposition Leader Kevin Taft offers a credible explanation in his recent book, Oil’s Deep State: How the petroleum industry undermines democracy and stops action on global warming.

An “oil deep state”, says Taft, is what happens to jurisdictions around the world once they discover oil (as opposed to a “Petrostate”, which is “conceived in petroleum”). If governments don’t take serious steps early on to keep petrodollars out of their politics and ensure that the lion’s share of the benefits flow into public coffers, as Norway has successfully done, then it’s exceedingly difficult to hold on to one’s democracy. Industry leverages all that money back at controlling the very governments that are supposed to regulate them.

Albertans get 4% of oil wealth vs. 80% for Norwegians

This unholy relationship between Big Oil and our governments doesn’t just impact our environment, health and First Nations’ rights – it means a raw deal for taxpayers, as Mitchell Anderson lays out in a recent essay in The Tyee.  In 2015/16, he notes, the Notley Government “collected a mere $1.5 billion on 942 million barrels of bitumen production, worth only $38 billion due to collapsed oil prices. This resource rent works out to less than four per cent return to Alberta taxpayers. Compare that to the days of former premier Peter Lougheed when Alberta captured 28 per cent of resource revenue, or even 15 per cent even in the days of Ralph Klein. Norway taxes oil company profits at close to 80 per cent.”

So Notley had good reason to attempt a royalty re-jig – too bad she lacked the resolve to see it through. This helps explain her recent tantrums and her government’s desperation to expand the industry – though at a 4% share of depressed oil prices, they’d have to build an awful lot of new pipelines to claw their way out of their fiscal hole.

By the way, those who buy into Notley and Trudeau’s logic that without oil and gas revenues, we can’t afford to pay for our environmental programs need to take a hard look at these revenue numbers (BC’s are even more pathetic) and then promptly knock it off.

Under the influence

I say the above to provide context to our problem, not to absolve our leaders for the bad choices they keep making. Horgan’s predecessor Christy Clark let the oil industry write her climate plan, while she clung to the promise of a fracking-powered LNG industry. Sadly, inexplicably, Horgan is now trying to keep her LNG pipe dream alive.  Meanwhile, the Trudeau government welcomed Donald Trump’s election as they saw it would help resurrect the embattled Keystone XL Pipeline.

Our federal and provincial governments may well be “captured” by this industry – but one way to ensure they remain captured is for new leaders to keep taking the same campaign donations and meetings as their predecessors did. According to Huffington Post Canada, by late 2016, the Trudeau Government had already met with these big oil and gas companies or lobby groups the following number of times:

  • Enbridge: 86 times
  • Canadian Association of Petroleum Producers: 70 times
  • The Canadian Energy Pipeline Association: 57 times
  • TransCanada Pipelines: 45 times
  • Imperial Oil: 57 times
  • Kinder Morgan 35 times

That’s 350 meetings — nearly one per day — with just six of the top players in the Canadian oil and gas industry in Trudeau’s first year in office. Perhaps this explains why he wound up sticking with the very same Harper-era climate targets he once mocked for being too weak.

How do First Nations, environmental defenders and everyday citizens stand a chance against this kind of influence?

Horgan, the Enigma

On the surface, John Horgan is in many ways different from Christy Clark and at odds with Trudeau and Notley. His government has brought in a full grizzly trophy hunting ban, turned down the proposed Ajax mine, and it’s taking meetings with First Nations and carrying out investigations into the salmon farming industry. But, make no mistake, he too has much to answer for.

Harry Swain, head of the Joint Review Panel on Site C Dam, has attacked Horgan’s rationale for continuing the project (Photo: JRP)

He had everything he needed to kill the aforementioned environmentally and economically disastrous Site C – a BC Utilities Commission report that was a slam dunk against the dam; the testimony of highly respected, independent experts like the head of the Joint Review Panel on the project, Dr. Harry Swain, and former BC Hydro CEO Marc Eliesen, tearing to shreds the economic argument for the dam and Horgan’s statement in defence of proceeding.

Horgan had made commitments to First Nations that are simply impossible to keep while continuing to break treaty promises and violate their rights in such a significant way – even if he’s real “conflicted” about it.

He has talked tough on Kinder Morgan, particularly of late, but his true resolve remains to be seen. He took the bizarre position of backing the project in provincial court (against the Squamish First Nation), while opposing it in federal court. And he’s still backing the economically unviable, climate and ecology-destroying LNG industry.

By backing LNG, the Horgan NDP lost the election before it began
On energy, Horgan remains an enigma

It remains to be seen where the Horgan NDP goes from here. Their hypocrisy on key issues has already frayed relations with many of their longtime supporters and their legislative partners, the BC Greens. But much of their legacy has yet to be written. Will they show they respect the environment and First Nations’ title and rights by giving their all to oppose Kinder Morgan? Will they refuse to renew unsustainable open net pen salmon farming tenures – many of which come due this June? Will they drop this LNG business once and for all? Will they reverse their disastrous position on Site C? (They still very much can and should).

Or will they just be a milder version of the Alberta NDP or federal Liberals?

These are tough political choices, no doubt. But it’s the tough choices that reveal true character and leadership. It’s actions, not promises that count.

At least be honest

As I argued in a critique of Justin long before he was elected prime minister, it’s his hypocrisy that’s the hardest to stomach. At least with Stephen Harper, Ralph Klein, Christy Clark and Gordon Campbell, we knew what we were getting. They may not have been honest about a lot of things, but they made no bones about their policies on energy, the environment, and Indigenous Rights. They didn’t care and they told you, straight up.

It’s somehow worse being lied to, and then, to add insult to injury, getting lectured for having a problem about it. Justin clearly cares about his brand. Unlike Harper, he desperately wants to be liked – and when people turn on him, even for perfectly good reasons, he doesn’t take it well.

Witness the irony of Justin losing it on a pipeline opponent at a town hall meeting in Nanaimo: “If you’re not going to respect the people in this room, then you need to leave.” What’s worse – not respecting the decorum of a public meeting or not respecting an entire province, the rights of Indigenous people and the environment? If we’re talking about respect, who in this situation deserves the lecture?

Sure as God made little green apples, British Columbians and First Nations will keep fighting Trudeau and Notley on Kinder Morgan and Horgan on Site C, LNG, and fish farms.

These defenders of the environment and Indigenous rights have proven determined to stick to their convictions, even when doing so is deeply inconvenient. Even when it means being bullied, publicly insulted, and threatened with financial ruin or jail. They know Trudeau and Notley’s “National Interest” argument doesn’t hold water; that even the threat of pitting our police officers and military soldiers against decent citizens is a gross abuse of power that makes a mockery of our prime minister’s commitment to obtaining “social licence” for projects; that science and the law tell us we must take our environment and Indigenous rights seriously, and that our leaders are wrong not to – even worse, to pretend to and then break their word.

Of course politicians lie. A cynic might say it’s even quaint or naive to complain about it. But a lot is riding on just how pissed off citizens get about being lied to – and what they are prepared to do about it.

After the backlash from his Site C decision, Horgan can’t make another misstep, like faltering on Kinder Morgan, without losing critical votes to the Greens and dashing his chances of reelection. Justin’s 17 BC seats matter far more to his own future than do his four in Alberta, so declaring war on BC could prove a big mistake. Rachel can’t get reelected without getting her pipelines built, but, let’s face it, even with them, her days are numbered.

So they all had better enjoy their cake while they can.

At this rate, it won’t be long before the party’s over.

Former TD Bank Comptroller: Site C Dam too costly, unnecessary

Swain: Building Site C would harm BC’s credit rating; cancelling it would not


Former TD Bank Comptroller: Site C Dam too costly, unnecessary

The head of the Joint Review Panel on the controversial Site C Dam, Harry Swain, is dispelling the notion that cancelling Site C would somehow harm BC’s credit rating. In fact, it’s quite the opposite, he warns:
[quote]Terminating Site C means paying back the money that’s already spent in order to avoid another $10 billion in debt. From the credit rating agencies’ point of view, that’s a huge relief. No downgrade will be necessary.[/quote]
A lower credit rating means a higher cost of borrowing for the province, which would strain the budget and further hamper the NDP-led government’s ability to deliver on its campaign promises. Swain’s comments are in line with a warning from Moody’s that the single biggest threat to our Triple-A credit rating is BC Hydro-related debt. The already over budget Site C – piled on top of all the costly private power contracts and new debt the crown corporation accrued under the Liberals – would only compound an already bad situation.
Harry Swain

Swain’s comments, made in an emailed statement obtained by The Common Sense Canadian, add to the message he delivered at a press conference earlier this week, when he rebutted claims that cancelling the $10-12.5 Billion project would cause a significant increase to power bills in the coming years. “A decision to continue to build the dam based on fears of a big rate hike from cancellation would be a decision taken in serious ignorance,” Swain noted today.

“The decision about how many years it will take to pay off the termination costs will be decided by BCUC,” he added. “It will not be immediate. It will be done over a reasonable period of time so as to avoid unnecessary rate shock.”

Swain has repeatedly dispelled the need for the power, drawing attention to BC Hydro’s poor track record on predicting future demand, and quoting from the BC Utilities Commission’s similar finding on the subject, stating at the recent press conference:

[quote][The BCUC] was severely critical of BC Hydro’s load forecasting ability…noting that in forecasts going back fifty years, 77% of the time, they had been high to way-too-high…Even by Hydro’s account, we don’t need new power until somewhere in the middle of the 2030’s. By better load forecasting, that’s probably put off to the 2040’s.[/quote]

No rate shock from cancelling Site C: Head of review panel

Harry Swain leading the Joint Review Panel into Site C (Photo: JRP)

At a press conference earlier today, Harry Swain, head of the Joint Review Panel into Site C Dam, disputed recent claims that the costs of cancelling Site C Dam would have to be borne by ratepayers in a short timeframe that causes rates to spike. Swain made the comments as a part of a wide-ranging critique of fear-mongering coming from the pro-dam Allied Hydro Council, the Liberal Opposition, and a loaded letter from the government’s own deputy ministers. He explained:

[quote]There is no requirement that the sunk costs be paid immediately. There are lots of precedents in regulatory proceedings in Canada and the United States for these costs to be spread out over a reasonable period of time, and so I don’t think that is going to be the source of a rate shock for BC.[/quote]

Swain suggested the BCUC’s projected remediation costs were too high as well. “We are still mired in this sunk cost fallacy. Probably the one area where I disagreed with the BCUC was their contribution of about $1.9 Billion for remediation. I think that’s too high…I don’t think it’s a real issue.”

Swain also shot down other common attacks of the BC Utilities Commission’s report on Site C, such as its use of the lower end of Hydro’s demand forecasts:

[quote]It was severely critical of BC Hydro’s load forecasting ability…noting that in forecasts going back fifty years, 77% of the time, they had been high to way-too-high. They showed the increased attractiveness of the termination scenario, the lower the actual load turns out to be. In other words, if you adopted the load forecast that was given by BC Hydro, which the BCUC was constrained to do, you could be drawn to the notion that we needed the power early on. The Utilities Commission said, “Nah”. The low forecast – they had a band, high, medium, low – is the one that we would use and there are a number of considerations that could make the reality less than that.[/quote]

“Even by Hydro’s account, we don’t need new power until somewhere in the middle of the 2030’s,” added Swain. “By better load forecasting, that’s probably put off to the 2040’s.”

Swain was highly dismissive of the two deputy ministers, Dave Nikolejsin and Lori Wanamaker, who challenged the BCUC report, including its use of low-end demand forecasting, questioning whether they had even bothered to read it.

Swain also picked apart the contention of the Allied Hydro Council – which is made up of unions seeking jobs from Site C construction – that Site C is important for “decarbonization” – a “serious, serious issue”, he acknowledged. “British Columbia is not the greatest sinner in this respect [and] has considerable capacity for further generation that does not emit carbon dioxide or methane, that does not involve damming a river.”

[quote]The argument that we cannot integrate renewable energy into the system because of its intermittency and its non-dispatchability doesn’t work very well. First off, we have more storage than just about anybody else…Second, we have some million-and-half acre-feet [of storage] coming back to us [from the Columbia River Dams] in 2024 – coincidentally, the date that Site C is supposed to be finished – which is non-treaty storage and ours to do with as we like. Even BC Hydro says that we can integrate on the order of more than a third of renewables in the existing system without new storage.[/quote]

Finally, he noted that Site C, essentially a large run-of-river project as opposed to a storage dam, has only 0.4% of the storage capacity of the Williston Reservoir – making the argument for Site C over other renewables like wind and solar a moot point.

Swain’s comments come as the NDP cabinet is rumoured to be on the verge of announcing its decision on the project.


Why approving Site C could sink NDP

Illustration by Jonathan Ramos

It’s getting down to the wire for the NDP-led government to announce its decision on Site C Dam. The corporate media and a some big guns for labour have been making a sales push to throw the beleaguered project a lifeline, and many fear they could succeed. That would be the biggest mistake the NDP could make. They didn’t create this monster, but they will own the consequences if they keep it alive.

There are three reasons given for carrying on with Site C: 1. We’d be throwing away $4 Billion if we killed it; 2. We’ll eventually need the power; 3. The jobs!!! All of these are bogus – and the cost of getting this wrong, for ratepayers and taxpayers (YOU), is astronomical.

A bottomless hole

Former TD Bank Comptroller: Site C Dam too costly, unnecessary

Even if you buy the overstated remediation costs for the project, even if you accept the far-fetched premise of $4 Billion lost (experts like the head of the Site C Joint Review Panel peg it closer to $3 Billion), you’d have to consider the cost of not cancelling Site C. For once, let’s be frank. Even the BC Utilities Commission, when it found the project could easily exceed $10 Billion, even go as high as $12.5 Billion (up from Hydro’s estimate of $5 Billion-6.6 Billion in 2007), wasn’t fully appreciating how bad this could get.

Just look at Newfoundland’s yet unfinished Muskrat Falls project, estimates for which have more than doubled from $6.2 Billion to $12.7 Billion. At $6.7 Billion spent, many there say it’s past the point of no return (familiar), but Site C isn’t nearly that far along, so it should be viewed differently. The net result for Newfoundlanders will be an additional $150 a month in electrical costs per homeownerforever! Newfoundland has a smaller population to absorb its cost overruns, but we’ve got our own share of problems to compound the damage from Site C. Think of the lawsuits from First Nations whose treaty rights are being undeniably violated (while both the provincial and federal governments tout UNDRIP – i.e. they know better).

But the biggest issue is the shaky ground on which the project is being built – literally. Way back in 2009, I interviewed a longtime farmer in the region, Dick Ardill. His family has been in the Peace going back as far as mine, the Beatties, who lost their ranch to the first big dam there, WAC Bennett. Dick must have been well into his eighties when I spoke to him, with a lifetime of practical knowledge of the soil and slope stability in the valley. He told me then the biggest reason not to build the project was the unstable land. He’d seen firsthand the Attachie slide of 1973 and many others over the years. The mixture of shale, clay, and alluvial soils made for an awful place to put an earthen dam.

Slumping around the Williston Reservoir, circa 2008

The 80 km section of the valley – from Hudson’s Hope to the foot of Fort St. John – where Site C was proposed was in some ways worse in this respect than where the Bennett Dam and Williston Reservoir were built (the Williston gobbled up far more land than originally contemplated, due to slumping, including my grandfather’s property above the planned reservoir). Granted, the Williston Reservoir behaves differently than would Site C, which is more a massive run-of-river project than a storage reservoir with large swings in water levels, but a 1991 report by geologist Norm Catto for the Ministry of Energy and Mines had this to say about the eastern Peace Valley, which includes the area where the dam itself is proposed:

[quote]Thus, all of the major terrain units present in the eastern Peace River region are subject to slope failure. Extreme caution should therefore be observed in any effort to exploit or utilize river valley slopes.[/quote]

This report appears to have been ignored by Hydro in evaluating Site C.

Cracks in the dam

Site C Dam construction site with tension cracks highlighted (PVEA)

Flash forward to the tension cracks formed around the dam site and the hundreds of millions of dollars of cost overruns already attributable to these very stability issues and you see that old Dick knew what he was talking about. And here’s the thing: There’s no bottom to this problem. Like a highly leveraged 2008 stock deal, we have no idea how deep this hole gets. Ten billion? How about fifteen? Or twenty?

If everything went perfectly according to plan (the opposite of what has happened thus far), Hydro intended to have the dam paid off by 2094! That’s now blown, so what are we talking? 2120? 2150? How many generations of your descendants will be paying for this mistake? And what’s the interest on $20 Billion amortized over a century, at much higher interest rates than we currently enjoy? (The BCUC rightly chastised BC Hydro for assuming low rates in perpetuity). In other words, what’s the real cost of this project? I could take a stab and say $60-80 Billion, and you could say that’s just a wild-eyed guess. Then I would reply, “Exactly – I’m using BC Hydro’s methods.” (For the sake of argument, though, at a rate of 5%, $20 Billion, paid off over 100 years, comes to roughly $100 Billion in principal and interest. Just sayin’).

Oh, and remember that the NDP wants to do all this while freezing Hydro rates. LOL! If they’re serious, they’ll have to raise taxes or make massive cuts to social services. They can’t have their cake and eat it too.

According to Moody’s, the single biggest threat to our Triple-A credit rating is BC Hydro-related debt. In other words, Site C – piled atop all the sweetheart private power contracts and financial blunders the crown corp committed under the Liberals’ direction – will cost us our rating. Then up goes the province’s cost of borrowing – for all our debt – and the house of cards comes tumbling down. We’re worried about (at most) $4 Billion in sunk costs, remediation and cancellation fees? Chump change!

But that’s not the worst of it. Dr. Vern Ruskin (PhD, MCom, BSc, Retired PEng [BC]) warned the BCUC of serious safety concerns, partly due to the above stability issues around the dam site. Dr. Ruskin is no less than the former Director of BC Hydro’s Planning Division, responsible for planning, designing, budgeting and contracting more than ten dams in BC, including WAC Bennett, Peace Canyon and Site C in its early stages. Among other things, Dr. Ruskin warned that changes made in 2011 to the original dam design pose increased risk of dam failure, as do these recent tension cracks and the instability they suggest.

The BCUC did not consider these concerns of Dr. Ruskin because dam safety was outside of the terms of reference for its review. But there is no reason the NDP-led government should ignore Dr. Ruskin. The enormous consequences of a dam failure – potential human injury and loss of life, widespread property damage – would make these financial concerns seem trivial by comparison.

“We’ll eventually need the power”

Here’s a thought: For the last decade, our population has been growing, we’ve been building bigger houses and acquiring more gadgets, but our power consumption has remained flat. Is it so wild a concept that ten or twenty years from now the same thing could be true? Our gadgets are getting more efficient, our building codes more stringent, and we’ve seen an exodus of heavy industry, which once consumed a third of our total electricity. Wait, are we stopping raw log exports tomorrow? Did I miss the memo about a whole bunch of pulp mills reopening? Are there dozens of new mines breaking ground this year? Will BC defy global economics and magically produce an LNG industry after all the years of failure?

But let’s play this out, for sake of argument. Say in 20 years we do need more electricity. We sure as heck wouldn’t be building Site C to supply it. At the rate renewables of all stripes are dropping in cost, we’d avail ourselves of the latest, best technology – which wouldn’t be a 70-year-old idea for a mega-dam. No less than the head of the Site C Joint Review Panel, Harry Swain, the BCUC itself, and other eminent energy experts not tied to Site C, Hydro or the government, have come to the same conclusion. We won’t need the power for a very long time and if and when we do, Site C will not be the best option, either environmentally or in terms of cost.

One final point that connects to the cost issue: Since we don’t need this power, it will have to go into our grid and across our borders to customers in Washington State and Alberta. In real terms, it will cost over $110/megawatt hour (MWh) to produce, yet the going rate to sell this power has been hovering around $35/MWh for years. You do the math. Every megawatt produced carries a loss to the ratepayer.

But the jaaaawwwbs!!!

A few quick notes:

1. BC’s big unions aren’t getting these jobs – a different, quasi-union called the Christian Labour Association of Canada, already has the lion’s share of this gig. It is also noteworthy that one of BC’s biggest unions, the BCGEU, has come out against the project, so there is a divide within labour on the issue.

2. We keep hearing 2,000 jobs – balderdash. With a series of layoffs and a significant decline in vehicles and visible work on the property – much of that related to these tension crack issues – local sources suggest the real number of workers is far lower than Hydro and the government claim, pegging the number at 500 or less. These jobs are temporary and have come under criticism for allegedly unsafe conditions.

3. If we’re prepared to spend large quantities of tax dollars and hydro fees simply for a make-work project, there are far better ways to employ far more British Columbians for far less money, as a new analysis from UBC’s Program on Water Governance underscores.

This jobs argument is the weakest link of the pro-Site C camp and the NDP should treat it as such.

NDP deciding its own future

If Site C proceeds, this could be the one and only time John Horgan and his NDP cabinet are sworn in by the Lieutenant Governor (Photo: Province of BC / Flickr)

The costs to ratepayers and taxpayers – along with all the other impacts on farmland, First Nations and the environment – are impacts Site C would have on British Columbians, fauna and flora. But the NDP would be wise to consider the impacts the project would have on them, politically. Had the BCUC come out with rosy outlook for the project, that would perhaps have given them some cover to continue forward. It didn’t. Now, the ball is in the current government’s court and it is not only deciding the future of Site C, but its own future.

Many in the environmental community appreciate the moves the NDP has made thus far – (partially) banning the grizzly hunt, (sort of) taking a stand against Kinder Morgan, reviewing professional reliance, reviewing Site C. Yet, I have spoken with many colleagues and seen scores of comments on social media to the effect that if the NDP proceeds with Site C, they will abandon the party.

On the flip side, if the NDP kills Site C, will it lose labour votes? Will union lobbyists Bill Tieleman or Jim Quail turn their backs on the party? Hardly. It’s unclear what the Greens will do in the short term, but this delicate, temporary arrangement will be severely strained and, in the long run, Site C will further drive a wedge through the Left, causing the NDP to lose votes in the next election. This will all be compounded by the fiscal woes that will accompany this inevitable boondoggle. Just look to Ontario and Newfoundland to see the  political fallout from poorly made decisions on large-scale energy projects.

Green MLA Sonia Furstenau said it best in the legislature last week:

[quote]Up until now, this has been a BC Liberal boondoggle. The cost overruns, the ballooning debt, the questionable need for such a costly project: this is the Liberals’ mistake alone. But if the government decides to continue with Site C, they will become responsible for the impacts. It will be on the shoulders of this government.[/quote]

Indeed, if this government chooses to flood the Peace Valley (again), we may look back in years, drowning in unbearable power bills and debt, and realize that 2017 was the NDP’s high watermark. Then came the flood.


BC Hydro’s real debt has grown 1337% under Liberals…Shouldn’t someone call the cops?

The Keystone Kops (1914)
The Keystone Kops (1914)

I start this exercise with a couple of general comments.

The detailed information available on the “progress” of BC Hydro since the Liberals took over in 2001 would be very difficult to pull together if we were left to government confessions of error or sleuthing by the NDP opposition. In fact, in this regard, the public are greatly indebted to Norman Farrell, Arthur Caldicott, Erik Andersen, Tom Rankin, John Calvert, author of Liquid Gold, Damien Gillis, myself and, on the question of Site C, people like Harry Swain, who have been steadily reporting and commenting, faced by stony silence from the government, since 2007 or earlier.

The Sun and the Province papers in Vancouver, with their mutual masturbation agreement with the Canadian Association of Petroleum Producers, have been in a coma where the government is involved, thus I think it imperative that The Tyee, The Common Sense Canadian, In-sights, Desmog Canada, and Laila Yuile be singled out and congratulated for providing a constant flow of information demonstrating the all-but-formal and clearly deliberate bankrupting of BC Hydro by the Campbell/Clark government.

Liberals raise Hydro’s obligations by $74 Billion

The hard fact is that under the Liberals, BC Hydro’s real debt – including all its obligations – in constant dollars has increased by 1,337%, from $6 billion in 2005 to $80.2 billion today. This total comes from Hydro’s most recent annual report (2016) and is made up by the following three categories:

  1. Regulatory (Deferral) Accounts: $5.9 Billion
  2. Long Term Debt: $18 Billion
  3. Long Term Private Power (IPP) Contracts: $56.3 Billion

It must be noted that since the Liberal reign began in 2001, Hydro hasn’t been hit by a depression, a burst dam, a substantial labour dispute, a diminution of its customer base, nor any other calamity that could explain this huge increase in debt. In fact, according to Premier Clark and the brains of the outfit, Deputy Dreamer, Rich Coleman, thanks to Liberal policies of perfection, we had absolutely Sooper-Dooper times. Just how their largest trust from the people, BC Hydro, went $74 billion in the goo and de facto bankruptcy on their watch simply isn’t dealt with, on the the theory that if no one heard the tree fall in the forest, it never happened.

BC Hydro HQ
BC Hydro HQ

During this period, Hydro has been borrowing large sums to pay yearly dividends to the Minister of Finance for his annual cooking of the books to make it appear that BC has a balanced budget, a noteworthy piece of fiction in a government noted for fiscal legerdemain.

In fact, this has been a government that doesn’t just employ puffery or exaggeration, it lies through its teeth, as if lying was its default position. I raise this because in a moment I’m going to talk about a criminal investigation being required and in such matters, believability is a critical factor and I tell you plainly that neither Clark nor Coleman can demand to be accepted as truthful people on their public record.

Unforeseen catastrophes aside, there are only three possible answers as to how Hydro could lose all this money: grossly negligent management, money being wrongly spent, or money exerting undue influence on decision makers.

In law there there’s a maxim, “res ipsa loquitur” meaning “the thing speaks for itself”, and I suggest the pissing away of $74 billion does speak loudly and fairly to bloody awful management; yet it hardly seems likely that there wasn’t some culpable conduct somewhere in the mix. There may or may not be a fire but there’s a hell of a lot of smoke. Moreover, never forget that this is a tightly controlled Crown Corporation and the government runs it using its own pet poodles.

The fix is in

BC Liberal Legacy: A Huge Debt Burden
Former Premier Gordon Campbell and Finance Minister Colin Hansen

Let’s turn to Premier Gordon Campbell’s radical change of policy in 2002, which forbade BC Hydro from creating any new hydro power of its own (except Site C, as it had been on the books for decades), with new power to be produced on a tiny scale – no more dams or big environmental devastation. Dr. Andrew Weaver, the leader of the BC Greens who has always supported this scheme, told me they only used water wheels! There would be no damage to the streams involved and they would be run by small “mom and pop” operations.

Well, it turned out a tad differently, with rivers blocked, with what sure look like dams, huge pipes, a substantial powerhouse, a notable lack of waterwheels, river banks demolished, fish runs destroyed, trees knocked down and run by little “Mom and Pop” operations such as Ledcor and General Electric. Incidentally, this substantial environmental loss is not computed and included in the $74 Billion loss.

These teensy-weensy “Mom and Pop” operations called Independent Power Producers (IPPs) got a very good deal, in fact the sweetheart deal of all sweetheart deals, such that if you gave the same to your family, the taxman, once he stopped laughing, would disallow it!

In simple terms, BC Hydro must take all the power IPPs produce and pay 3 times the market price. They must buy whether they need it or not and, if you guessed that means during the Spring runoffs – when the bulk of their power comes and our electrical demand is at its lowest – Hydro must buy all their power even though their own reservoirs are filled to overflowing and didn’t need it, you’d be right. If you also guessed that Hydro must have to sell a lot of excess power at large losses, you get a gold star on your report card!

Losing 72 cents on the dollar

Citizens for Public Power member and SFU professor John Calvert explained it like so:

[quote] B.C. Hydro announced the outcome of its 2006 tender call for electricity from private energy developers. The results were startling. Not only had B.C. Hydro agreed to buy three times the power requested in the tender, it had done so at locked-in prices far above projected market rates…

…The core of that policy was laid out in the 2002 Energy Plan, which prevents B.C. Hydro from building new generation assets, and transforms the Crown corporation from a generator of publicly-owned electricity to a purchaser of energy from the private sector.

The rationale for this change is hard to fathom. The old policy worked very well. By generating its own power, B.C. Hydro ensured that ratepayers enjoyed, on average, the second lowest electricity prices in North America. This is because prices were based on the historic cost of production, not the current energy market price…[/quote]

Flash forward a decade to Norm Farrell’s update on the situation:

[quote]…over the past decade, amounts paid to IPPs have tripled. Independent power producers, more than doubled deliveries to BC Hydro, and the utility was forced to dump surplus power outside the province, with trades sales at an average, since 2005, of just 28% of prices paid private producers. And that loss is made worse because of Hydro’s collection and distribution costs.

Then years later, for every dollar we pay them, we lose more than 72 cents.

Consumer demand was not growing, private power supplies were rising and export markets were soft. BC Hydro could only dump power outside the province for little revenue or reduce its internal production. Again, the utility’s own reports lead to a conclusion.

The following numbers are drawn from BC Hydro’s annual and quarterly reports and from U.S. Department of Energy market recaps. They demonstrate that in nine months, BC Hydro paid more than $600 million above market to independent power producers – having purchased the power from IPPs at $85,261/GWh, while the market for selling electricity to the US market was just $28,930 CAD per unit. Unfortunately, the rate of loss is accelerating…

…Dr. Calvert’s warnings were insufficient and subsequent Liberal actions even more egregious. The professor noted early independent power producer (IPP) contracts locked BC Hydro (and BC taxpayers) into financial commitments of up to 40 years. Recently, contracts have extended to 60 years and all are indexed to protect suppliers against inflation. Some required large public expenditures for distribution. Calvert said IPP prices were double the market value but they’ve since risen to even more.[/quote]

Now here’s a little observation from Mr. Farrell that will make you feel warm and fuzzy all over: “We also know that, instead of costing between $400 million and $500 million every year, IPP payments have climbed beyond $1.3 billion yearly, a number that has increased 188% since 2011 when Christy Clark was appointed Premier.”

Now, none of this would have been possible if this the recipients of this government largesse with our money didn’t have friends on the inside. Campbell before her knew and now Clark knows that BC Hydro’s potential profitability and financial strength guaranteed corporate raiders would attack, seeking to convert public wealth to private. To be successful, they needed cooperation of modern political rulers and, whether explained by incompetence, philosophical bent or desire for covert rewards, the Liberals have cooperated fully.

It will only get worse

Even if the Liberals are given the boot in May, Hydro’s skyrocketing debt won’t stop here. Additional costs already baked into the crown corp’s plans will see its obligations rise to the hundred billion dollar range in the coming years. So serious is the problem that BC Hydro alone could cost BC its prized triple-A credit rating, as The Times-Colonist reported – albeit belatedly:

[quote]…projects like Site C are pushing up B.C. Hydro’s debt levels, and adding to concerns about the province’s overall ‘high debt burden’ compared to its peers, Moody’s also wrote in its credit opinion. B.C. Hydro’s debt has increased from $8.1 billion in 2008 to a projected $18.1 billion last year, and there is a further $20 billion expected in the future for infrastructure projects, a $2-billion annual upgrade program and the Site C dam.

‘The anticipated increase in debt continues to pressure the province’s rating since it raises the contingent liability of British Columbia,’ wrote Moody’s…[/quote]

And that’s assuming Hydro keeps Site C on track at $9 Billion – which is impossible to believe, given the Liberals’ track record with major capital projects more than doubling in cost. Dams are especially prone to wild cost increases (see Muskrat Falls), as recent geotechnical issues with Site C illustrate. Hydro is trying to tamp down concerns over a 400 meter-wide tension crack at the dam site, but locals have been warning for years about the unstable ground upon which the project is being built.

Grandson helps destroy grandpa’s legacy

The father of BC Hydro, WAC Bennett
The father of BC Hydro, WAC Bennett

Ironically and to me sadly, among today’s political facilitators of the utility’s destruction is W.A.C. Bennett’s grandson, and my late friend Bill Bennett’s son, BC Hydro Chair Brad Bennett, who is, I’m told, is a Liberal apparatchik and close Christy Clark pal. Another is Hydro CEO Jessica McDonald. She was Deputy Minister and confidant to Gordon Campbell in 2006 when the premier’s office invited predators to get rich on electricity.

 The companies give generously to the Liberals but it’s hard to get full and accurate figures since, as we now know from Elections BC, who recently sent their investigations of Liberal fundraising to the RCMP, donations are often laundered through individuals, and companies have been known to lie through their teeth on this subject.

One way to get a general picture is to go back to 2008 when the long-term contracts were handed out and there was a call for independent power projects, 75 proponents registered with B.C. Hydro. From July 1, 2008 to September 30, 2010 – when B.C. Hydro was making its decisions – 14 proponents donated $268,461 to the Liberals. Ten of the 14 were successful.

Shouldn’t someone go to jail?

The duties and powers of the Attorney General, Suzanne Anton, for the purposes of this article, are set out in admirable simplicity by the ATTORNEY GENERAL ACT. Under Section 2, Duties and Powers, article b) states:

[quote]The Attorney General must see that the administration of public affairs is in accordance with law.[/quote] 

Bearing in mind the enormity of the losses and complete lack of explanation by the government for this incredible emptying of the public purse, where is the Attorney General?

By the simple statement of the law as quoted above, her duty is clear. By long tradition, she sets aside her political role – especially when evidence of a crime comes to her attention – and it is reasonable to assume colleagues are involved.

Christy Clark being sworn in as Premier of British Columbia in 2011, surrounded by her cabinet (Province of BC/Flickr)
Christy Clark being sworn in as Premier of British Columbia in 2011, surrounded by her cabinet (Province of BC/Flickr)

I place before you my opinion in plain terms. There is a great deal of money involved here and plenty of people who feel entitled to share it. We have a premier who, in a political context, has the morals of an alley cat. The deputy premier, also in charge of gas, is hardly any better. It’s surely fair to say that when politics is involved, a fairy tale is second nature, their default position.

The death of BC Hydro has nothing to do with the ordinary risks of the business world and there are no events beyond human control here. Of considerable importance, the premier and the minister in charge are struck dumb on the question of how a thriving monopoly on power could rack up $74 billion in unwarranted costs, with a full clientele and the means to meet all demands.

Ms. Anton, if you don’t order a full enquiry forthwith on the evidence before you, in light of the statutory requirement of the Attorney General Act and your sworn oath to “see that the administration of public affairs is in accordance with law”, it would be open to fair conjecture that this inaction is to protect your political colleagues.


Liberal pals plundering BC Hydro for tens of Billions



By Norm Farrell

Until the mid-twentieth century, much of British Columbia lacked reliable and affordable electricity. To resolve the privation, W.A.C. Bennett created BC Hydro, a publicly owned utility. The province’s leader acted because the private sector had refused to meet growing needs for electricity. Unlike less effective successors, Premier Bennett was a pragmatist, not an ideologue.

Longtime Bc Premier WAC Bennett's dream is dead
BC Premier and BC Hydro founder WAC Bennett

Existing power producers focused on profitable services in the southwest but Bennett had a province-wide vision. His was an audacious plan, but appropriate and successful. BC Hydro became indispensable to the growth and wealth of British Columbia. However, success sowed seeds of destruction.

BC Hydro’s profitability and financial strength guaranteed corporate raiders would attack, seeking to convert public wealth to private. To be successful, they needed cooperation of modern political rulers and, whether explained by incompetence, philosophical bent or desire for covert rewards, the Liberals cooperated fully.

Looting Bennett’s Legacy

Ironically, among today’s political facilitators of the utility’s destruction is W.A.C. Bennett’s grandson, BC Hydro Chair Brad Bennett, a Liberal apparatchik and close Christy Clark pal. Another is Hydro CEO Jessica McDonald. She was Deputy Minister and confidant to Gordon Campbell in 2006 when the premier’s office invited predators to get rich on electricity. (Blogger Alison Creekside named lucky BC Liberal operatives and allies in her article Gordon Campbell’s Big Jobs.)

A decade ago, Citizens for Public Power member and SFU professor John Calvert wrote:

[quote]B.C. Hydro announced the outcome of its 2006 tender call for electricity from private energy developers. The results were startling. Not only had B.C. Hydro agreed to buy three times the power requested in the tender, it had done so at locked-in prices far above projected market rates.

…The core of that policy was laid out in the 2002 Energy Plan, which prevents B.C. Hydro from building new generation assets, and transforms the Crown corporation from a generator of publicly-owned electricity to a purchaser of energy from the private sector.

The rationale for this change is hard to fathom. The old policy worked very well. By generating its own power, B.C. Hydro ensured that ratepayers enjoyed, on average, the second lowest electricity prices in North America. This is because prices were based on the historic cost of production, not the current energy market price…[/quote]

Dr. Calvert’s warnings were insufficient and subsequent Liberal actions even more egregious. The professor noted early independent power producer (IPP) contracts locked BC Hydro (and BC taxpayers) into financial commitments of up to 40 years. Recently, contracts have extended to 60 years and all are indexed to protect suppliers against inflation. Some required large public expenditures for distribution. Calvert said IPP prices were double the market value but they’ve since risen to even more.

IPP costs explode under Clark

We also know that, instead of costing between $400 million and $500 million every year, IPP payments have climbed beyond $1.3 billion yearly, a number that has increased 188% since 2011 when Christy Clark was appointed Premier.

All graphics courtesy of Norm Farrell
All graphics courtesy of Norm Farrell

Chronically overestimating demand

BC Hydro’s encompassing blunder was failure to recognize technology and market changes revolutionizing the energy industry. Hoping to grow their fiefdoms and deliver value to demanding friends, Hydro executives chose to ignore reality. They steadily issued demand forecasts predicting immense growth. (“If a boy holds a hammer, everything needs pounding.”) Meanwhile, consumers were conserving.

Here’s how badly they’ve gotten it wrong:

  • In 1994, they predicted 52% demand growth by 2004. Actual growth: 18%
  • In 2005, they predicted 20% demand growth by 2016. Actual growth: 0%
  • In 2011, they predicted 20% demand growth by 2016. Actual growth: 1%
  • In 2012, they revised to 9% demand growth by 2016. Actual growth: -1%

Indeed, the utility’s records reveal that electricity consumption by regular customers has been flat for more than a decade.


IPPs get rich on ratepayers’ backs

Despite all the above, over the past decade, amounts paid to IPPs have tripled. Independent power producers more than doubled deliveries to BC Hydro and the utility was forced to dump surplus power outside the province, with trades sales at an average, since 2005, of just 28% of prices paid private producers. And that loss is made worse because of Hydro’s collection and distribution costs.

10-yearsSo, for every dollar we pay them, we lose more than 72 cents.

Consumer demand was not growing, private power supplies were rising and export markets were soft. BC Hydro could only dump power outside the province for little revenue or reduce its internal production. Again, the utility’s own reports lead to a conclusion.

The following numbers are drawn from BC Hydro’s annual and quarterly reports and from U.S. Department of Energy market recaps. They demonstrate that in nine months, BC Hydro paid more than $600 million above market to independent power producers – having purchased the power from IPPs at $85,261/GWh, while the market for selling electricity to the US market was just $28,930 CAD per unit. Unfortunately, the rate of loss is accelerating.



Liberals pulling Hydro’s puppet strings

The Liberal Premier and cabinet failed catastrophically when they directed BC Hydro to contract for private power the utility did not need at prices it could not afford. The extent of this gross mismanagement, unprecedented and ruinous for the crown corporation, remains concealed by government-friendly media that is enjoying millions of public funds spent on advertising and public relations.

The Liberal decision to exercise absolute control over BC Hydro’s management was made clear in 2008. CEO Bob Elton, a qualified professional, was fired by Gordon Campbell after stating publicly, “Conservation is the cleanest, easiest and least expensive way to meet the increasing demand for electricity in B.C. – it’s like building a virtual dam.”

Reducing consumption of electricity simply did not fit with the Liberal gang’s desire to buy private power from their pals for tens of billions of dollars.

The goose that lays the golden egg

More recent opponents of Liberal power policy assume that, beyond grabbing the profits to be made flipping IPP contracts, political operatives aimed to cripple BC Hydro to make its privatization palatable. The writer believes that, while this was the initial plan, the guiding parties decided they could gain more another way.

There was no need to privatize Hydro’s assets and liabilities. Instead, they privatized its profits and left Hydro and the public with all the financial risks.

One example is Site C, which will create more unneeded and unaffordable power. No private investors in the world would fund a hydroelectric dam with environmental issues, First Nations conflicts and near zero prospects of profitable operations. But, if the public pays for the dam and sells power to the private sector at a fraction of cost, there are private profits to be made.

Former TD Bank Comptroller: Site C Dam too costly, unnecessary
Site C Dam will likely run well over its $8.8 Billion price tag

Budgeted at $8.8 billion, if spending on Site C matches other Liberal megaprojects, it will cost substantially more. That money goes straight into the pockets of big construction companies who have donated heavily to the Liberal Party. Far from caring about keeping the project on budget, they have a huge incentive to see that it goes over.

In addition, there are indicators the dam’s output will be less than forecast. In 2011 through 2016, BC Hydro’s three largest facilities annually produced 3.6 times stated capacities. Proponents claim that Site C, with 1,100 MWh capacity will produce 5,100 GWh. That is a ratio of 4.6, considerably above Hydro’s typical experience. Reduced production will mean higher costs for each unit of power the dam generates.

That should set off alarms for residents and small businesses operators. BC Liberal policy enables heavy industries to pay well below the average cost of new power so residents, commercial enterprises and light industry are the utility’s only profit producing customers. High production costs for private power and Site C output and weak export markets make significantly higher domestic prices inevitable.

Liberal donors control Hydro board

Hydro Board, Liberal DonorsClearly, BC Hydro has been in disarray for some time. In fact, it is operating as an affiliate of the BC Liberal Party. Of the eleven people collecting fees as directors of the province’s utility in the last fiscal year, all have records as party contributors or close associates of Liberal politicians. Some have business dealings impacted by business activities of BC Hydro.

Political meddling, moronic contracts, deceptive accounting and the self-serving management of mediocre hacks devastated what was once a competent and professional crown corporation. Not by accident or mere negligence, this was deliberate.

Recovery will not be simple or quick but, if it is to happen at all, a new beginning starts with the provincial election on May 9.

Note: Site C’s output was originally stated as 1,100 GW, which has been corrected to 1,100 MW.

Norm Farrell is a longtime blogger and published of IN-SIGHTS.


Rafe: Site C Dam shows how broken our democracy is

BC First Nations Chiefs Roland Wilson, Liz Logan and Stewart Phillip took their anti-Site C message to Ottawa – to no avail (Liz Logan/ Twitter)

This week I said I would talk about Site C but little did I know what I had taken on. I spent nearly a day and a half with stuff that wouldn’t likely be in the article but knew I needed to read.

After devouring an enormous pile of material which I’d rather not have, I came to the firm conclusion that Site C is a terrible idea, founded on a professed need for energy in BC based upon highly suspect, self-serving research by Hydro, which has a long history of deliberately overestimating electrical demand and with no reasonably certain market except a very dubious LNG industry. The price tag, likely well in excess of $10 billion, will guarantee the bankruptcy of BC Hydro, which I suspect was the plan all along.

The whole story

It’s interesting and important to note a March, 2016 article by Justine Hunter in the Globe and Mail:

[quote]The author of a report the B.C. government used as a green light to proceed with the $8.8-billion Site C dam says there are better alternatives, but his review panel was not permitted to look at other solutions to future demand for more electricity.

In fact, Harry Swain, an associate fellow at the University of Victoria, whose May, 2014, report on the dam was viewed as a “mostly positive” study that justified the government’s decision to proceed, says British Columbia could meet its future energy needs at a lower cost with the stroke of a pen by taking back the power available under the Columbia River Treaty.

“In the report, we held back a lot of stuff because we were not allowed to talk about policy,” he said in an interview this week. “It wasn’t the whole story.”[/quote]

In short, in typical Christy Clark style, the report upon which the government bases its support of Site C, according to the Chairman of the Joint Review Panel that produced it, “wasn’t the whole story”.

Wow!  Even with this incompetent lot, that truly takes the breath away. 10 Billion bucks to be spent based on an incomplete assessment of the facts as honestly admitted by the Chair of the Committee!

Knowing that MLAs don’t have the guts to do anything about this, I realize that the real question is the same as that which I talked about recently with the Kinder Morgan pipeline. How was the decision to be made?

Democratic deficiency

Our version of a parliamentary system is totally unsuited to deal with a large controversy.

If you were to say that to someone ignorant of political philosophy, let’s say Christy Clark, she would respond, “Well we had an election in 2013, we got a majority and therefore we make the decision.” In fact, that’s just what her slightly less than cerebral colleague, Bill Bennett said.

That ignores a number of factors, not the least of which is that elections, including the one in 2013, are seldom over one controversy. They are held to elect a government, not decide a single issue which may not be well canvassed in the election campaign and indeed may not yet have become a recognized issue.

Secondly, under our system, we elect people of various backgrounds but who all have one thing in common – they will all, in every matter, do as they are bloody well told.

There is still this myth that great discussions take place in Caucus, which opinions the Minister responsible uses as the basis of his legislation. As the Duke of Wellington said when a man accosted him with “Mr. Robinson, I believe”.

“If you believe that, you’ll believe anything!”

These days, caucus is rarely even told about government policy, much less consulted. What they read is the same mindless, self-serving shit they mail out to you at public expense.

Kinder Morgan: A top-down decision

Let’s examine the federal government decision to approve Kinder Morgan, a flashpoint issue in BC the likes of which I have never seen before. It was publicly denounced by half a dozen Liberal backbenchers in BC, all of whom can now forget about promotion. The decision was made by Cabinet in accordance with orders from the Prime Minister.

Now, suppose you were vehemently opposed to Kinder Morgan and it so happened your MP was a Liberal. Let’s say that you know him/her very well, are a good supporter and even gave them money. Naturally, you go to this MP and advise them that you believe strongly that Kinder Morgan is a terrible idea, not only for the constituency but the whole province, and that you would be furious if the MP didn’t make that clear. Furthermore, you could say with accuracy that the vast majority of the constituency felt the same way.

What do you think would happen?

I can tell you what would happen: Nothing! Two times the square root of sweet Fanny Adams.

Now that is a democracy? That is the people having a say in the policies by which they will be governed?

There is an obvious solution to this problem – on major issues, submit the question to the people by way of referendum. I think I can feel the shivering out there as these words are being read. We don’t use referenda because this is a parliamentary democracy.

Well, that takes us back to where we started – our parliamentary democracy in practice denies individual voters any role in decision making for controversial issues like Site C or Kinder Morgan. Do we all just say “who cares?” and amble off to the pub for a beer?

The real reason we don’t use referenda more often is that the “elite” are afraid that the rabble won’t do what they’re told.

A lesson from Charlottetown

One only need to look at the proposed changes to how we elect MPs in Canada to see how vigorously – and illogically – the “elite” fight the idea of letting the people decide how they want to perform their democratic right to vote!

Isn’t that absurd when you think about it?

The most glaring example of the nations ignoramuses thwarting the wise decisions of the “elite” came with the Charlottetown Accord referendum in 1992 when the Rabble told “those who know best” to get stuffed and, in fact, in British Columbia, by 67.9%.

There were a number of us in BC who threw everything into the fight on the “No” side, including constitutional lawyers, professors of constitutional law, members of the British Columbia Court of Appeal, probably Canada’s most experienced constitutional lawyer and so on – yet the answer from the “higher purpose persons” (the late Denny Boyd’s wonderful phrase) was that these stupid bovine masses, following hypnotic broadcasters, destroyed the country.

Well, even though the “elite”, from the Prime Minister down, predicted that the country would fall to pieces if Charlottetown didn’t prevail, that not only did not happen but, I would argue, the county was saved. In due course, Quebec realized it would have to be like all other provinces if it wanted the benefits of being part of the nation and, although the last separation vote was close, the separatists lost and it also became clear that the changing population was going to make their case harder and harder to make.

The voter should be boss

I think the killing argument is simply this: If the principle is that decisions in our democracy will be made by ordinary people voting for their representatives, how can they be smart enough to elect good representatives but too stupid to give instructions as to what they want to happen?

No, don’t let me mislead you. I do not say that ultimate wisdom comes from referenda but I do say neither does it come from electing ordinary people to Parliament or from benevolent despots, for that matter. Nor do I support government by referendum; I support representative government where the voter is boss, not the Prime Minister, and, on major issues, by referendum.

I would argue from the Charlottetown experience that people in a referendum on a serious issue inform themselves far better than they are ever informed in an ordinary general election. With Charlottetown, it was remarkable what information the public demanded, what they observed on their own, the questions they asked of expert guests on my show and what they learned and learned so well.

What we really get down to is that the “elite”, whose motivation is not reaching an appropriate decision that’s beneficial to all, rather a resolution that suits their personal interests or those of their backers, don’t like it when the people they normally control in parliament or the legislature are not there to do what they’re told.

Yes, these are harsh words and betray a hearty mistrust of the system under which we govern ourselves. I say them by reason of a lifetime experience watching, participating and seeing just how willing we are to fool ourselves, rather than attempt any sort of change. We are masters of allowing perfection to be the enemy of improvement.

I am not so naïve as to think there is a perfect system available. What I do know, and I’m sure most people realize, is if you are never prepared to change, you will always have the same lousy situation.

Over the festive season I suggest you sit down with your mate or a good friend, with a glass of good BC wine and ask yourselves, “Do I really have a say, however minor, in the decisions that are made by the legislature or Parliament? The decisions on which my life is directed?”

If the answer is negative, you know that the big kids don’t want the rules to change – does that mean that you passively accept your fate?

Or do you go to work as freedom loving people always have when the “elite” run the citizen’s life from the comfort of their favourite chair at the Club?


Justice for Peace Caravan tells Trudeau: Keep your promises to First Nations 

Members of the Treat 8 "Justice for the Peace" Caravan (Photo: Gary McNutt)
Members of the Treat 8 “Justice for the Peace” Caravan (Photo: Gary McNutt)

Submitted by Andrea Palframan

On September 12, the Federal Court of Appeal in Montreal will hear the latest legal challenge to the massive Site C hydroelectric dam already under construction on Treaty 8 territory in northeast British Columbia. First Nations community members from Treaty 8 are travelling on a caravan across Canada to focus attention of the importance of this case to the rights of all treaty nations and to Prime Minister Justin Trudeau’s promised new relationship with First Nations.
The Justice for the Peace caravan has been supported by LeadNow and is endorsed by the Assembly of First Nations British Columbia, the First Nations Leadership Summit, and the Union of BC Indian Chiefs.
Prophet River and West Moberly First Nations have been fighting the Site C hydroelectric dam project for close to five decades. Site C is a disastrous plan to build a giant dam in the Peace River Valley of northeastern BC. It’s an $8.8 billion project that will flood 83 km of farmland, drown wildlife habitat, and trample indigenous rights — all to supply electricity for dirty tar sands extraction and fracking.
Site C Dam is a litmus test of the commitments made by Canada to have a renewed, nation-to-nation relationship with First Nations. Treaty 8 Justice for the Peace Caravan are joining thousands of supporters in calling for a respectful relationship that honours Treaties and the United Nations Declaration on the Rights of Indigenous Peoples.
Grand Chief Stewart Phillip, head of the Union of B.C. Indian Chiefs, called the federal government’s permitting of the Site-C Dam “an absolute betrayal of all of the commitments and promises Prime Minister Trudeau made during the last election.” He called on young people to be a part of history by stepping up and taking action to protect the Peace River: and they are.
Youth delegate Helen Knott, who is blogging about the caravan at, says that although dam construction is underway, “Only a small fraction of land has been cleared and the earth is so resilient that it has already begun to heal itself. It is not too late to stop this dam. It can and will be stopped.”
Says Caleb Behn, Treaty 8 member and Executive Director of Keepers of the Water:
[quote]We are the heart and soul of the oil and gas economy in this country. We have given coal. We have given oil. We have given trees. My dad went to residential school. We gave souls…And this is how you’re going to treat us in the 21st century? This is the kind of hypocrisy that makes me question the wisdom of my ancestors choosing to sign on to treaties.[/quote]
With their Justice for the Peace Caravan, Treay 8 members and their allies are make it loud and clear that if the Trudeau government is serious about a renewed relationship with First Nations, it is unacceptable to issue construction permits while there’s an outstanding First Nations legal challenge about the Site C dam.
The West Moberly and Prophet River First Nations are appealing a federal Judge’s decision to approve the construction of Site-C despite the project’s violation of their constitutionally-protected rights to hunt, fish, and trap. After months of waiting for a trial date, they’re appearing in court on September 12. When the House of Commons resumes sitting a few days later, they’ll head to Ottawa to deliver 20,000+ petition signatures and meet with key Ministers on the file.
“We’ve raised nearly $300,000 for Treaty 8 First Nations’ legal challenges,” says Susan Smitten, executive director of RAVEN Trust.
[quote]The caravan is a powerful demonstration of unity and hope, and what it means to bring people together to support communities who are on the frontline of disastrous projects like the Site C dam. Legal challenges are expensive, and a major financial burden on First Nations. But Treaty rights of First Nations offer some of the strongest environmental protections in the world.  They stand a good chance of victory in the courts.[/quote]
The cross-country Justice for the Peace Caravan will stop in communities all across Canada, sharing stories, connecting struggles, and building support for the just resolution of the Treaty 8 First Nations’ case against the Site-C dam. 4,432km is a long way to go.
To follow the caravan, go to


Who Killed BC Hydro?



This is the story of the death of our province’s once greatest institution, BC Hydro. Though the public power utility began its life under Socred Premier WAC Bennett in 1961, the story of its demise starts circa 2001, under the newly-minted Liberal administration of Gordon Campbell.

Today, this once thriving institution is de facto bankrupt, without counting the $8.8-plus billion set aside for Site C Dam (a number surely to double, as we have seen with Newfoundland’s Muskrat Falls) – this catastrophe when customers haven’t required any increase in electricity for more than a decade, while rates increased by 30%.

The envy of the world

Longtime Bc Premier WAC Bennett's dream is dead
Longtime BC Premier WAC Bennett’s dream is dead

When the Liberals came to power in 2001, BC Hydro was a thriving energy company and it is no exaggeration to say the envy of the world. It was set up by WAC Bennett so that cheap power could be delivered to the less developed regions of the province the private sector wouldn’t supply. Bennett held that without cheap transportation and power, the north couldn’t develop, so he converted private companies into BC Rail, the BC Ferry Corporation and BC Hydro.

Since 2001, BC Rail has disappeared and BC Ferries might just as well have. Moreover, BC Hydro’s real debt has increased by 1,170%, from $6 billion in 2005 to $76 billion today.

How did this happen to a profitable company and so quickly?

Public bad, private good

Former BC Premier Gordon Campbell and his Finance Minister Colin Hansen
Gordon Campbell and his Finance Minister Colin Hansen

Clearly, it was deliberate and consistent with the Camp Rightwing and Fraser Institute-inspired view that crown corporations are evil and can’t possibly do anything as well as the private sector. You’re to overlook that this wasn’t part of Campbell’s election platform; in fact, he promised to save the crowns I mentioned, including BC Hydro. This was the first of a long line of Liberal falsehoods that continues to this day, reaching a crescendo with Premier Clark’s ongoing bullshit about Site C.

Let’s see how it happened and you judge whether or not it was deliberate.

In 2002 Campbell propounded his energy policy, part of which said: “The private sector will develop new electricity generation, with BC Hydro restricted to improvements at existing plants.” The other exception was Site C, since it had been in the plans since the ’70s.

The myth of “small hydro”

The private companies were called Independent Power Producers (IPPs) and here’s how then finance minister Colin Hansen described the program:

[quote]… where we can encourage small companies to build small scale hydroelectric projects that are run of the river, and what that means is, instead of having a big reservoir, a big dam that backs water up, and creates a great big lake, these are run of the river, so the river continues to flow at its normal rate but we capture some of the energy in the form of hydroelectric power from this.[emphasis added][/quote] 

Construction of a private power project on the Ashlu River (Photo: Range Life)
IPP construction on the Ashlu River (Photo: Range Life)

This was all barnyard droppings – the dams were called weirs but no less dams for that: the rivers, their ecologies, salmon runs and other water life were killed; roads and transmission lines were constructed; the small companies were the likes of General Electric. The contracts, which virtually run forever, pay the companies at least and often much more than double the market price and BC Hydro is required to buy all of their energy whenever produced whether it needs it or not!

A vital fact is that the vast majority of private power can only be generated during the annual Spring run-off, when BC Hydro least needs it as its reservoirs are full to brimming and power demand is at its lowest.

Power we don’t need, at outrageous costs

These huge corporations pay peppercorn rent, but didn’t fancy putting their own money on the line, so the public was forced to carry almost all the financial risks for a wealthy private system. It wasn’t long before every sharp operator wanted in, with the result that a few big guys cashed in and Hydro was stuck with buying power it didn’t need at prices it couldn’t afford.

What happened then?

Norman Farrell, a Hydro watcher for many years and the publisher of In-sights, says:

[quote]… IPP power, (for 2015) costing BC Hydro $1,217 million, could have been acquired from our southern neighbours for $545 million, a $672 million premium for buying power in BC. Ironically, many of the IPPs are foreign owned companies, happily exporting their profits…the fastest growth in the independent power industry has been in last two years, while Premier Clark hurries to get the Site C dam construction beyond what she calls “a point of no return.”[/quote]

Premier Campbell’s rationale was that IPPs would supply California, but didn’t do his homework or he’d have known that California’s renewable portfolio standard doesn’t consider IPPs “green”, so they won’t pay a premium for electricity produced by our IPPs. BC Hydro was forced to take and pay for all this power whether it needed it or not – and it didn’t. Another great business decision!

Self-regulation = No regulation

These huge, rapacious IPPs police themselves with respect to environmental practises, and Surprise! There have been no prosecutions. The environmental consequences have been rightly called a “horror show” by eminent BCIT fish biologist Dr. Marvin Rosenau.

And for all that, the values of IPP generating facilities are not included in BC Hydro assets, although the company is obliged by contracts extending up to 56 years to pay a reported $56.2 billion for the produced power.

Working to save our rivers

In 2008 I was approached by rancher Tom Rankin, who had a ranch on the Ashlu River near Squamish, destroyed by an IPP. Tom, a successful businessman who had formed Save Our Rivers Society, asked me to be spokesperson and I joined Damien Gillis, now publisher of The Common Sense Canadian – which we later co-founded in 2010 – and Joe Foy, chief campaigner for The Wilderness Committee, using Tom’s enormous knowledge reservoir, and we travelled throughout the province in the 2009 election speaking against this calamitous Liberal energy policy.

With help from people like economist Erik Andersen, we would continue for years to explain to people from village to village that their rivers were being destroyed, their Hydro rates were set to soar, and BC Hydro was being driven into bankruptcy. People simply couldn’t believe that any premier or any government would allow this to happen! Well, it did happen and the result was even worse than we had forecast.

The only good news is that through these efforts and the support of thousands of British Columbians awakening to this crisis, we were able to fend off most of the really big projects – General Electric’s $5 Billion/17 river Bute Inlet behemoth, The Upper Pitt River Project, the Glacier/Howser project in the Kootenays, and many others. All that is to say that, no matter how bad things got, they could have been much, much worse.

What is Weaver thinking?

Rafe- Weaver, BC Greens should quit supporting private river power sham
Dr. Andrew Weaver, leader of the BC Green Party

Because politics is what this is all about, you should know that the current Green Party leader, Dr. Andrew Weaver, wrote and spoke in favour of the Liberals’ policy in 2009 (listen here to his robo-call on behalf of the Campbell energy policy) and still supports it to this day – to the astonishment of all who hoped that the Greens might be a solution, not part of the problem.

In fact, prior to his decision in 2009 to support the Campbell Energy Plan and its IPP program, Dr. Weaver didn’t bother to visit the easily accessible Ashlu River project, all but completed, to see for himself what an ecological catastrophe but baldly stated IPP energy to be “clean and green”. Even as recently as this month Dr. Weaver declared to me that IPPs were merely waterwheels!

Here we are in 2016 and BC Hydro would be bankrupt if it were in the private sector. The public is left to pay ever-increasing rates to cover this financial boondoggle (and that’s without the massive additional burden of Site C), scores of rivers ruined, wealthy companies made wealthier with the money going out of British Columbia, all without any change in sight – except for the worse.

Robbing Peter to pay Paul

Ah, but that’s not all this business-oriented government has done for us. You see, BC Hydro is forced to pay an annual dividend to the government so that Finance Minister Mike de Jong’s “budget” looks better. Now – get this – Hydro must pay this dividend even if it loses money hand-over-fist, as it has ever since the Liberals got their greedy little pinkies on the till.

As of now, Hydro owes $852 million to the government over the next three fiscal years in mandatory annual dividend payments and, not having the money, must borrow the funds. In short, BC Hydro must borrow money — which ratepayers will have to pay back in the future — so that it can meet government’s annual demand for a share of its non-existent profits, transferring the debt from us the taxpayers to us the ratepayers!

The business acumen displayed takes the breath away – along with our money.

Deferring the inevitable

Graph courtesy of Norm Farrell
Graph courtesy of Norm Farrell

Here’s some more funny math. BC Hydro has been deferring expenses to avoid declaring operating losses. “Money was disbursed but instead of treating payments as expenses, the company treats some of them as ‘temporary’ assets,” explains Norm Farrell. “It is like a dairy farmer buying hay but not counting its cost as an expense, arguing that feeding cows today allows them to grow larger and healthier and perhaps produce more milk in the future. It is trick accounting, allowed because government writes its own accounting rules.”

Another trick is with something called “regulatory assets” which are largely deferrals – expenses Hydro paid but doesn’t want to treat as expenses. Instead, they stay on the balance sheet as deferred costs. As of this year, they stand at a whopping $6.3 billion, up from $861 million 10 years ago and zero 15 years ago, when the Liberals took over from the NDP.

“Someday, these will have to be treated honestly,” says Farrell. “Except, if they did that, instead of showing profits, they would show massive losses and have to end the transfers from BC Hydro to provincial treasury.”

Where are the alternatives?

BC Hydro is often referred to as our “energy” company – I’ve called it  that – where in fact it is our “Hydroelectric” energy company. Hydro has been negligent unto disobedient in its failure to assess alternative sources of energy.

BC sitting on enough geothermal to power whole province, say new maps
Steam rising from the Nesjavellir Geothermal Power Station in Iceland (Photo: Gretar Ívarsson / Wikipedia)

For many year, it made the excuse that other energy sources like wind power, tidal, solar and so on were intermittent – there’s no wind power when there’s no wind – and the power couldn’t be stored, so it was useless. That excuse is no more. These alternate sources, with new technology, can spell each other off in an integrated grid, and are starting to be stored through improved battery technologies and can thus relieve the need for hydroelectric power with consequent monetary and environmental savings. Not to mention geothermal, which is, like hydropower, “base-load” (always available). Experts tell us we’re awash in geothermal potential but BC Hydro would rather flood productive farmland with giant, old-school dams and sign rip-off IPP contracts than harness the sustainable and plentiful power beneath our feet.

The difficulty is philosophical and emotional as much as anything. It should be called the BC Energy Corporation and thus remove the impression that hydro is the only power we can get.

The management of BC Hydro is so wired into hydropower that they’re like a carpenter who only owns a hammer, so that everything he sees looks like a nail.

Space doesn’t permit an extensive look at Site C here, a book in itself, but most experts – including no less than the head of the Joint Review Panel into the project – agree that Site C is almost totally unnecessary in any event and, going further, there’s not a scintilla of need if alternative forms of energy were developed.

Our debt to bear

In closing, what must never be forgotten in any assessment of BC Hydro is that it is not only a public company owned by the people of British Columbia, their debts are owed by the people as well. It’s not that we don’t think of that much – we don’t think about it at all. We whistle past the graveyard, assuming that we will never be called upon to pay. We may not ever have to write personal checks but government services will be substantially diminished if BC Hydro turns up its toes to be ravaged by the vultures patiently watching.

When you look at the disgraceful mess the Liberals have made of BC Hydro, you have to seriously ask – how long will it take for the public to realize how Gordon Campbell and Christy have, ahem, screwed them?


BC Hydro being used to funnel tens of billions to Liberal friends


BC Hydro being used to funnel billions to Liberal friends

By Norman Farrell – republished from In-sights

Readers may tire of reports on BC Hydro but the more I examine this public utility, the more convinced I am that citizens of BC are victims of massive financial deception.

In 20 years leading up to 1996, BC Hydro’s average annual revenue from trading in North American electricity markets was $115 million. In three years ended March 2003, the utility realized gross trading revenue of  $11.25 billion, although that sum was tempered by the $1 billion or so BC Hydro paid to end a subsequent lawsuit by California.

Transferring risk

Construction of a private power project on the Ashlu River (Photo: Range Life)
Construction of a private power project on the Ashlu River (Photo: Range Life)

Although the American power market had been manipulated by Enron and other criminal fixers, Gordon Campbell and his colleagues believed that British Columbia could become a permanent power supplier to the western USA. Liberals wanted the electricity to be created by private operators, but it was soon clear that private entrepreneurs were not prepared to take significant financial risks.

The provincial government was determined to proceed so it decided that BC Hydro would sign long-term contracts to purchase power produced by independents at prices that made projects attractive to investors. This effectively transferred all business risks from private operators to the public. While dumb, it’s a fairly common occurrence today when governments are keen to be seen as business-friendly.

Compounding the situation was the Liberals’ misjudgment of future markets because they didn’t anticipate improved technologies and growing availability and affordability of alternative power. Consumption efficiencies, declining heavy industries and falling costs of solar and wind permanently changed the energy industries.

A losing proposition

BC Hydro has contracted with independent power producers for increasing quantities at prices adjusted upwards each year for inflation. But, domestic demand has been flat for a decade and the export market in the last five years has returned only 2.8¢ per KWh, a fraction of the 22.8¢ gained in the heyday of 2001.

Because it is buying each KWh from IPPs at over 9¢ but has no need for the total it must buy, BC Hydro is left with two choices. One is to generate less power in its own facilities and the other is to dump power outside the province at prices less than 1/3 of the amount IPPs are paid. BC Hydro is doing both.

Spending more to make less

power sourcesI’ve had utility defenders argue the company has never reduced its own output to accommodate private power so I reviewed sources of power reports for more than two decades. Here is a chart showing the last five years under Premier Clark’ leadership and the five years between 1996 and 2001.

The situation is not improving. In FY 2015, BC Hydro facilities generated 41,443 GWh of electricity. In FY 2001, those very same sites produced 49,940 GWh, which is 20% more.

However, here’s a vital point. In 2001, BC Hydro had assets of $12.6 billion. In 2015, assets had grown to $27.8 billion. The company has been spending heavily, allegedly to make the system more efficient. In fact, what is continuing is misappropriation of public wealth for the benefit of suppliers, contractors and other BC Liberal friends.

Some people believe the government intention is to privatize BC Hydro. However, I believe the present situation, with another $10 billion of public funds being thrown at Site C, is working just fine for Christy Clark, her cabinet colleagues and their sponsors.

Citizens should be asking for explanations, from politicians and the pro-media journalists who choose to ignore these facts.

A longtime blogger and publisher of In-sights, North Shore resident Norman Farrell has experience in a broad range of small business activities with a particular focus on accounting and financial management.