Horgan Pressing on with Site C as Budget Soars to $16 Billion

The B.C. government will continue constructing the Site C dam even though it will be delayed by a year and the budget has more than doubled to $16 billion.

Premier John Horgan acknowledged the opposition to the project in a news conference. “I know there are a lot of British Columbians who have never accepted this is an appropriate way for BC Hydro to go,” he said.

His government inherited a project it never would have started and has done its best to deal with circumstances as they’ve presented themselves, he said.

The 2017 decision to continue building Site C was difficult, but the decision announced today was easier, Horgan said. The dam is half finished and the consequences of cancelling it have grown, he said. “It would have left us a $10-billion debt and nothing to show for it.”

With the dam closer to completion, Horgan said he doesn’t expect the budget to keep growing, though as the pandemic has shown some things are unforeseeable. “The costs going forward are going to be less than the costs behind us,” he said.

Bruce Ralston, the minister of energy, mines and low carbon innovation, said the reports the government released today have provided assurance that continuing construction is the right decision.

“We know that Site C can be built and completed safely,” Ralston said. “With the information available to us now we feel there is a path forward for the Site C project.”

He also said the government has appointed Doug Allen, a long time civil servant who has held senior roles at TransLink, ICBC, BC Ferries and other public bodies, as the new chair of the BC Hydro board.

The government attributed the delay and budget increase to a combination of geotechnical issues and measures put in place due to the COVID-19 pandemic.

Cancelling the project now would still cost $10 billion that would need to be covered by either BC Hydro ratepayers or taxpayers, it said.

Background materials on the decision point to various benefits, including the economic stimulus of an undertaking that employs some 4,500 people and the role of hydro power in helping B.C. meet its carbon emission reduction targets.

The government also released two reports on the project.

One was from Peter Milburn, a former deputy minister, who the government appointed last July as a special advisor to work with BC Hydro and the Project Assurance Board and advise the government. He made 17 recommendations in his 40-page report dated Oct. 10, 2020 to improve governance, all of which the government said it has accepted and is implementing.

The other report was from John France and Kaare Høeg, technical experts the Project Assurance Board appointed to advise on geotechnical issues.

They found that BC Hydro’s plans to enhance the foundation on the right bank of the river will make the structures safe and serviceable over Site C’s operating life and that the dam can be safely constructed in a way that meets all Canadian Dam Association safety and reliability guidelines.

Milburn’s appointment came following an update to the BC Utilities Commission last year in which BC Hydro flagged “serious concerns” about the Site C dam’s schedule, scope and budget.

There were delays due to the COVID-19 pandemic, the utility said, but also a problem discovered on the right bank of the river requiring stronger foundations under the powerhouse, spillway and core areas of the future dam.

The third of a series of dams on the Peace River, Site C would flood an 83-kilometre-long stretch of the river to generate enough electricity to power 450,000 homes.

There has been steady opposition to the project. Ahead of the October election a group of 18 prominent British Columbians released a statement urging the government to reconsider continuing with construction. They included former BC Hydro CEO Marc Eliesen, former ICBC CEO Robyn Allan, the Union of BC Indian Chiefs’ Grand Chief Stewart Phillip and Harry Swain, who chaired the Site C Joint Review Panel that completed its work in 2014.

“The prudent course of action — one that respects Indigenous and treaty rights as well as the interests of all taxpayers and hydro ratepayers — is to immediately suspend all construction activities at the project,” they wrote. “This includes the imminent and critical river diversion. It’s folly to allow that diversion to occur when geotechnical woes of unknown magnitude abound at the construction site.”

Before the NDP formed government in 2017, the previous BC Liberal government had pledged to get Site C past the point of no return. The incoming government ordered a review of the project and consulted with professionals who were for and against continuing. It ultimately decided to keep going, saying it would cost too much to cancel the project.

The budget for Site C was $7.9 billion in 2010. By the time the NDP decided to continue construction it had grown to $10.7 billion. It was to begin power generation in 2023 and be completed by 2024.

It is now expected to be in service in 2025.