UPDATE – 2:30 PM PST: The BC Liberal government has approved Site C Dam, with construction tabled to start this summer.
Even if the BC Liberal government decides today to approve the now $8.5 billion Site C dam, the project still faces some big legal hurdles – based on mistakes the government made following the environmental review process.
In a nutshell, Site C faces six lawsuits from three different groups – each bringing both provincial and federal challenges. The plaintiffs include Alberta First Nations, BC First Nations and the Peace Valley Landowners’ Association (PVLA). Each case boils down to two main issues that linger from the Joint Review Panel’s indecisive verdict on the project earlier this year.
The first issue is the fact that the need for the project has still not been demonstrated. The second is the lack of fiscal due diligence surrounding the project.
Rob Botterell, former Comptroller for TD Bank in BC and the lead lawyer representing the landowners, reminds taxpayers, “At $8.5 Billion+, this would be the largest public infrastructure expenditure in the history of the province – the equivalent of 19 fast ferries.”
Independent regulator had its hands tied
Botterell’s case is built partly on the fact that the Liberal Government excluded the public’s independent energy watchdog, the BC Utilities Commission, from reviewing the project. The regulator was built precisely for this purpose: to examine proposed energy projects and plans based on their need and value to taxpayers and ratepayers.
The fact that the regulator was deliberately barred from doing its job on Site C constitutes gross political interference which may be legally actionable, in Botterell’s view. In a release prior to today’s announcement on the project, he noted:
[quote]Public infrastructure decisions of the size and scope of Site C…require the most thorough public scrutiny. It is simply unacceptable to make such decisions behind closed doors, release limited explanatory information, and conduct public policy by news conference sound bite. For the largest public infrastructure decision in provincial history we deserve better: open, transparent, and unfettered review of Site C’s economics by the independent and expert BC Utilities Commission.[/quote]
Botterell’s clients, a group of landowners in the Peace River Valley – some 30,000 acres of which would be flooded or disrupted by the project – have been granted a hearing at the BC Supreme Court on April 20. They will be seeking a Judicial Review that quashes the government’s issuance of the environmental certificate for Site C in October.
The PVLA is alleging that Cabinet erred in dismissing key portions of the Joint Review Panel’s findings on the project. While the JRP neither recommended nor argued against Site C, it found some gaping holes in the case for the project, which the government has thus far completely ignored.
BC govt breaks its own rules, gets sued
According to a legal backgrounder on the PVLA’s case, these issues include the overall need for the project – which was not demonstrated throughout the hearings – and the “uncertain economic effects of the Site C Project, including the Project cost, Site C electricity costs, and revenue requirements for the Project.”
This is the crux of the case: According to the PVLA’s legal petition, in ignoring these key findings from the panel, the government violated the very rules that it laid out in the terms of reference for the Site C review.
[quote]The Ministers relied upon a referral package from the Environmental Assessment Office that declared several key Panel recommendations to be beyond the scope of the Panel’s mandate. The PVLA Petition is based on a thorough review of the documents which set the scope of the Panel’s mandate, and which reveal that the Panel was not only permitted but was expressly required to assess the very economic impacts of the Project that were the subject of the recommendations the Ministers failed to consider. (emphasis added)[/quote]
In other words, the Liberal government set the rules for the review process, then broke them as soon as they became inconvenient. Project cost and need are no mere trivial matters and to cast them aside and proceed with Site C is highly irresponsible – and possibly illegal, according to this suit.
“The Ministers were not permitted under the Environmental Assessment Act to ignore the Panel’s findings and recommendations about the significant problems and uncertainties relating to Project and electricity cost estimates, load-forecasts, and valuation of alternatives for the Project,” say the plaintiffs.
And these are far from the only warning signs that should compel the government to halt the project or defer its decision.
Project’s cost keeps climbing
For starters, there’s the almost billion-dollar increase to the project’s sticker price leading up to the government’s announcement – now up to $8.775 Billion, making it the most expensive capital project in BC history. This from a government with a long track record of doubling initial estimates on much smaller capital projects – far, far worse than the NDP’s fiscal record in the 90s.
With dams particularly notorious for going over budget, there is no reason to expect Site C not to balloon further in cost.
BC’s credit rating in jeopardy
This would be compounded if Site C cost BC its Triple-A credit rating – a justifiable fear only made more real by Finance Minister Mike de Jong’s last-minute trip to meet with ratings agencies in Toronto on the eve of this announcement.
A lower credit rating means a higher cost of borrowing, hence a more costly dam – not to mention other fiscal challenges across the board. This last-minute trip by de Jong also begs the question: If you’ve already made the decision to proceed with Site C, then why go to Toronto now; if you haven’t, then why not leave more time to carefully contemplate your findings before rushing to announce your decision?
With soaring debt at BC Hydro, plus over $100 Billion in hidden taxpayer obligations (from private power contracts, public-private-partnership deals and the like) and close to $70 Billion in conventional provincial debt, BC’s credit rating should be in jeopardy.
Remember, when the NDP left power in the early 2000s, our provincial debt was a mere $34 billion, with none of these extra costs. Pile on Site C Dam, plus these hidden obligations – which are debt by another name – and the Liberals will have raised the real burden to BC taxpayers by over 5 fold since coming to power!
Already, we’ve seen skyrocketing power bills in recent years – which we can only expect to intensify if Site C proceeds.
No need for Site C
This will be compounded by the lack of need for the project, as we learned throughout the JRP’s hearings. This notion has been reinforced by both the premier and BC Hydro’s confused messaging around the project.
At first, Site C was to power BC’s homes, but when we became a solid net exporter of power in recent years – according to BC Stats – the rationale morphed into powering energy-intensive LNG projects. But BC Hydro undermined that statement during the JRP hearings, saying it was instead to export excess power to California – likely a money-losing proposition for BC.
Then, just last week, Christy Clark went back on her LNG argument, admitting that Site C was not in fact required for that industry. Even Hydro acknowledges we won’t need the power from Site C until 2022 at the earliest, but the crown corporation has a long history of exaggerating demand, and, thanks to improved conservation, BC’s power consumption has barely risen since the early 2000s and shows no signs of increasing – an important fact Hydro ignores.
Buy high, sell low
Because the need isn’t there, and because Site C would be one of the most expensive new energy options available to British Columbians, every watt will be produced at a loss as we dump unused power on the North American grid – which pays something like $30-35/megawatt hour for power which will cost us around $100 to produce.
This led the retired head of the Major Power Users’ Association of BC, Dan Potts, to predict a $350 million/year operating loss for taxpayers from Site C . “This project is turning gold into lead,” said Potts at a recent Vancouver press conference on the project.
[quote]It’s going to have a legacy of wealth destruction…It’s going to sap the province’s ability to raise money and borrow money, to do other things, such as infrastructure, hospitals, schools – all the things we need to do.[/quote]
First Nations lawyer up too
Finally, in addition to both provincial and federal lawsuits from the Peace Valley landowners, Site C faces legal challenges from BC’s Treaty 8 First Nations, as well as separate actions from Alberta’s Treaty 8 First Nations.
Knowing the victorious track record of Aboriginal court cases in Canada of late, even if the Liberal government makes the mistake of forging ahead with Site C Dam, it can expect to run headlong into a wall of legal challenges.
What were the results of the WAC Bennett Dam to First nations? Not good results for the Ingenika first nation. History does repeat itself. This time there is more preparation for fight.
Good Luck
nobody has mention that when the ground they want to build the dam on gets wet it turns to jello and when it does its going to move I believe there will be loss of life down stream when the banks of the peace start to move, build the dam on rock not clay has nobody looked into the stability it is easy to see, big bam ski hill is in the river ,there are slides from Hudson Hope to Taylor not the place for a dam, if they do build don’t live down stream
Site C is how the Provincial government intends to confront the First Nation issues, to appease the LNG industry.
Check out this site for an analysis of hydro electricity.
http://www.newscientist.com/article/dn7046-hydroelectric-powers-dirty-secret-revealed.html#.VJuuarjECA
Wouldn’t it be more cost effective to put solar panels on every house in BC?
How is it this government still running BC into the ground , is it the lower mainland sinking this province voting for these people . vancouver island should secede from BC and become it’s own province . Take everything west of the mainland coast and Haida Gwaii . To heck with the lower mainland
If there is no oversight by the BCUC or any other regulatory body, we can be sure that some people are making huge amounts of money off this bad decision, just as with the smart meter program. Follow the money and I bet will lead to the Liberal friends and former politicians. We must all recognize the time has come for major public protest about this ongoing attitude of rape and pillage.
Oooh! the government hasn’t yet figured what the opposition to this project will lead to.
The FN peoples along with local ranchers etc. will be a little more than annoyed. The country up there is empty for the most part and weird things happen at night – you know Bigfoots etc.
It has barely begun and already there is opposition that appears to have the legal aspects on their side. So, what do we have – the provincial government breaking the law with impunity ! I doubt it, a lot will happen and there have been many warnings against this project.
Great care will be needed before the proverbial sh*t hits the fan and the RCMP and the army get involved.
I sure hope it does get to this stage, but with the current government mindset, it will and it will get dirty.
A very sad day for British Columbia and it’s citizens.
Thanks.
There is much more to this decision than meets the eye. I am a resident of Fort St John and the impact of this decision will change our lives and impact us in many detrimental ways. When Christy Clark made this decision, she ignored these facts and all the residents in the area. She ignored the fact that we said no to site c. She doesn’t understand the challenges we’re going to face as a community. We are a small city with a large population that live in rural settings here, We’re farmers and ranchers as well as oil and gas workers. With the O&G industry, we have a huge transient population that strains our very infrastructure. With our population around 30,000 people, we share fewer than 20 doctors including 1 surgeon. We have 2 clinics and a small hospital. Our wait times for medical services is 6+ months. This is wait times for resources we actually have available, but no technical staff to run the equipment. We go out of province for such things as an MRI, as none is available to us here. Now we’ll add an extra 10000 workers to our already stressed or barely existent medical system here. As a northern community, with limited access, all of our supplies must be trucked in here, with the cost of fuel, we pay four times for the same amount of food as anywhere else in BC. With more people, more trucks and more trips, our food costs will double. Then we have the issue of housing. Already, we pay twice the rent for the same square footage as elsewhere. A one bed, 1 bath apartment costs more that $1000.00 per month, this rate will increase as more people compete for the few options available. The real estate market is already not affordable for the average person here. The average house costing well over $400,000. Our city streets are in very poor condition and are not well maintained. They are narrow and some are not even paved. They cannot handle and were not built with an extra few thousand in mind. We have 7 elementary schools, most of which are well over 60 years old. They are in bad disrepair and there is never enough funding by the BC government to fix them. We have 2 junior high schools and one high school. They all have issues with overcrowding, huge class sizes,, lack of supplies and teaching aids. but we have to make room for the workers families on top of these problems. There is all the environmental concerns that have yet to be addressed by the decision makers. On a human level, the impact to the families that live and make their living in the valley is the tragedy of the entire story. These families have resided on these farms and ranches for several generations. Some for 125 years. They have to watch their lives be destroyed and their entire histories be covered with water. This is what the government didn’t take into account, the lives of the 30,000 + people that will be completely altered by this decision. Did they ever wonder why the residents of this region have been fighting this dam for more than 30 years? No, they didn’t take us into consideration whatsoever. We are expendable it seems. Now we’ll have another huge reservoir and will live in a shroud of fog because of it. Thanks BC liberals, thanks a lot.
Everything you said I completely respect that your community will be and IS overwhelmed , but yet you vote BC Liberals every time with very clearly no interest in any other political perspective ….So you get what you voted for ….sad
Shelly,
While I agree that the flooding of the Peace River valley is disgusting and unecessary you diatribe is a tad “over the top”.
The medical “wait times” in the Lower Mainland are MINIMUM six months to a year. And you have “fewer” than 20 doctors for 30,000 people? Wow! We’d kill for those Doctor / Patient ratios down here…… And if you’re in a medical life threatening emergency in Ft St. John your FLOWN via air ambulance ( and paramedical staff) to either Edmonton or Vancouver…What the hell does THAT cost all us taxpayers?
I also find it hard to believe you pay “four times the cost for food” .
Really? I pay $5.00 for a loaf of bread in Vancouver so you pay $20? And you expect that cost to ‘double’ to $40 a loaf? Because to trucking costs?
News flash. The more trucks driving north to supply Ft.St John , the more competition for freight rates = LOWER freight(food) costs.
Please spare me the sensationalistic drama.
Stick to the facts, your arguements will be a tad more believeable.
What’s 3% interest on a $9 billion loan?
$270,000,000 per year, every year.
BC Hydro’s debt is already about $16 billion, not counting the deferral accounts and cost of IPP power.
I am no mathematician, and please correct me if I am in error here, but your calculation appears to represent simple interest which, if the loan was for a 30 year payback, would almost double the original $9 billion.
However I think most long term loans, like mortgages, are calculated at compound interest rather than simple interest, and if so the $9 billion loan over thirty years puts this project into the stratosphere in dollar terms and even with massive inflation I doubt that our great great grandchildren would even pay it off.
I am using the formula M=P(1+i)n where M is the final amount including principal, P is the principal ($9 billion), i is the interest (3%) and n is the number of years of the agreed upon term of the loan (30 years?).
Perhaps Norm could help us out with this.
seems most absurd to be trying to sell this as a public infrastructure project
Yeah I thought that was a bit weird as well.
“The dam will provide enough power to supply 540,000 homes.”
Sounds way nicer than
“The dam will provide enough power to run 250 bitumen oil pipeline pump stations all across northern BC’s pristine wilderness.”
or
“The dam will provide enough power for 500 natural gas pipeline pump stations all across northern BC due to relentless fracking.”
or
“the dam will provide fresh drinking water for northern BC due to the polluted condition of all those fracked undrinkable water tables.”