The Site C hydroelectric dam will be completed with the backing of British Columbia's NDP government, but it is warning the price tag will be higher than estimated.
Site C was projected to cost $8.3 billion to complete, but the government now estimates the project will total $10.7 billion.
"Megaproject mismanagement by the old government has left B.C. in a terrible situation," Premier John Horgan said Monday in a news release. "But we cannot punish British Columbians for those mistakes, and we can't change the past. We can only make the best decision for the future."
An estimated $4 billion has been spent so far on the dam and the NDP government was debating whether to continue construction or cancel the work midway through the job.
The financial impact of cancelling the project on ratepayers and B.C.'s bottom line were the major factors in the government's decision to proceed rather than cancel.
Our decision on #SiteC. #bcpoli pic.twitter.com/tNSr0Ndldc
— John Horgan (@jjhorgan) December 11, 2017
The government says the province risked a credit downgrade and debt-servicing costs of up to $150 million annually if the project was cancelled and the treasury absorbed the $4 billion loss.
The B.C. Utilities Commission, the province's independent energy regulator, concluded in its assessment released last month that the dam is over budget and behind schedule.
"It's clear that Site C should never have been started. But to cancel it would add billions to the province's debt, putting at risk our ability to deliver housing, child care, schools and hospitals for families across B.C. And that's a price we're not willing to pay," said Horgan.
The decision on the project's future is one of the first major decisions that faced the minority NDP government.
The massive hydroelectric project has been at the centre of a polarized debate between politicians, environmentalists, First Nations, labour groups and landowners in the Peace River Valley.
Former premier Christy Clark gave Site C the green light in December 2014, saying the decision to approve the province's most expensive megaproject marked a historic milestone that would be felt for a century.
Green Leader Andrew Weaver said the NDP's decision to proceed with the dam "is fiscally reckless."
"This government promised to be better than the B.C. Liberals. On this issue, the NDP government's approach has turned out to be no different whatsoever," he said in a statement.
"Today, Site C is no longer simply a B.C. Liberal boondoggle -- it has now become the B.C. NDP's project."
Site C has been part of the province's hydroelectric generation plans since 1958.
It will be the third dam on the Peace River in northeastern B.C., flooding an 83-kilometre stretch of valley near Fort St. John. It will provide enough power to light up to 450,000 homes a year.
B.C. Hydro's environmental impact statement forecasted flooding of more than 5,550 hectares of land, of which at least 3,800 hectares is agricultural. Site C would also flood Indigenous heritage sites and force up to 20 families, many lifelong ranchers, to move.
Construction started in July 2015, but one of the Horgan government's first moves was to send the project to a review by the utilities commission.
The commission was asked to confirm whether Crown-owned BC Hydro is on target to complete construction on budget and by 2024. It was also asked to provide advice on three possible outcomes: proceeding with the project, suspending construction until 2024 or terminating it.
SOME REACTION TO THE NDP'S DECISION TO PROCEED WITH THE SITE C DAM IN B.C.
Here is some of the reaction to the NDP government's decision to go ahead with the Site C hydroelectric dam in British Columbia:
"Today is a dark day. The government has passed up its chance to stop this misbegotten project. Instead, it has betrayed First Nations and all those who voted in hope of stopping Site C." — Peace Valley campaigner Galen Armstrong of the Sierra Club in B.C.
"In the long-run, Site C's affordable energy is a huge competitive advantage for business in the province. B.C.’s hydroelectric system gives businesses and residents certainty that reliable and clean power will be available when it is needed." — Val Litwin, president and CEO of the B.C. Chamber of Commerce.
"Affirming the construction of Site C is the right decision for the future of our province. Assuring a domestic source of clean, reliable hydroelectric power helps secure our energy system for the growth of businesses and sectors of the Lower Mainland and provincial economy for decades into the future." — Iain Black, president and CEO of the Greater Vancouver Board of Trade.
"Since the 1970s when it was first proposed, the Site C dam has caused nothing but worry and heartbreak for the farm families and First Nations living in the Peace River Valley. With the election of the NDP government, there came reason to hope. But now the looming threat of a dam flooding them out is back – what a lost opportunity." — National campaign director Joe Foy of the Wilderness Committee.
"With so much at stake for our province, better late than never for John Horgan and the NDP government to support Site C. This entire process and all of the uncertainty it caused was completely unnecessary. In the past four months, we have seen a rushed review and needless NDP-Green politicking create uncertainty and confusion that put this clean energy project, and the thousands of jobs it supports, at risk for no reason." — Chris Gardner, president of the Independent Contractors and Businesses Association.
"It was John Horgan's NDP that demanded a Site C inquiry by the B.C. Utilities Commission, and the results they received from it were clear: no need for the power, better alternatives once we do, and no advantage to ratepayers to proceed. With those findings, the only responsible choice was to immediately stop destroying the Peace River Valley. — Chief Roland Willson of the West Moberly First Nations.
"We recognize this has been a difficult decision for the newly elected NDP government. We respect and appreciate the many contributions from all sides of this issue because this was certainly not an easy choice. That said, completing the Site C dam remains the best choice for British Columbian families." — Tom Sigurdson, executive director of the B.C. Building Trades.
