Two Bungling Canadian Provinces

Two Bungling Canadian Provinces–Far East and Far West

The two provincial bookends of the Canadian Federation , Newfoundland and Labrador and British Columbia are cozy bedfellows when it comes to sanctioning billion dollar hydro projects without due process. .

Both have embarked on theses projects; Muskrat Falls in Newfoundland and Labrador and Site C in British Columbia even though the Joint( Federal / Provincial ) Environment Reviews of both projects recommended further independent review.

And in both cases the Provinces deliberately exempted the projects from their already established Public Utilities Review process .

This boggles the mind and calls into question the very nature very of our governance system in this country.

The Muskrat Falls Project on the Churchill River in Labrador is now well underway . The power to be generated is 824 Mega Watts . It was to cost in 2010, (The Joint Review Report) according to NALCOR, the Provincial Crown Corporation, the Corporation developing the project , around $4 billion ( $2.9 billion on site and $1.6 billion transmission lines) for a total of $4.5 billion. . It is now estimated by NALCOR that that cost is almost $12 billion . Some will argue the price quoted at that time was $6.4 billion. But that number included an extra project , Gull Island .

The Site C project is on the Peace River in North Eastern British Columbia. The project is underway but is not as far advanced as Muskrat. Its cost , according to BC Hydro, the Crown Corporation developing the project , is $8.3 billion .

Here is what the Joint Review Panel for the Newfoundland and Labrador Project said:

‘August , 2011


The Panel concludes that, in light of the uncertainties associated with transmission for export markets from Gull Island, Nalcor has not demonstrated the justification of the Project as a whole in energy and economic terms.

The Panel further concludes that there are outstanding questions for each of Muskrat Falls and Gull Island regarding their ability to deliver the projected long-term financial benefits to the Province, even if other sanctioning requirements were met. ‘

It went on to say :

‘RECOMMENDATION 4.1 Government confirmation of projected long-term returns

The Panel recommends that, if the Project is approved, before making the sanction decision for each of Muskrat Falls and Gull Island, the Government of Newfoundland and Labrador undertake a separate and formal review of the projected cash flow of the Project component being considered for sanctioning (either Muskrat Falls or Gull Island) to confirm whether that component would in fact provide significant long-term financial returns to Government for the benefit of the people of the Province. Such financial returns must be over and above revenues required to cover operating costs, expenditures for monitoring, mitigation and adaptive management, and financial obligations to Innu Nation. The Panel further recommends that the Government of Newfoundland and Labrador base these reviews on information on energy sales, costs and market returns that have been updated at the time of sanction decision, and make the results of the reviews public at that time. The financial reviews should also take into account the results of the independent alternatives assessment recommended in Recommendation 4.2.’

Here is what the Joint Review Panel said for Site C:

‘Page 337 –of the Joint Review Report

The Panel cannot conclude on the likely accuracy of Project cost estimates because it does not have the information, time, or resources. This affects all further calculations of unit costs, revenue requirements, and rates.

If it is decided that the Project should proceed, a first step should be the referral of Project costs and hence unit energy costs and revenue requirements to the BC Utilities Commission for detailed examination. ‘

These recommendations from both reports come from panels that were set up by the Governments of Newfoundland and Labrador and British Columbia and the Federal Government .’

What did both Provincial Governments do after these independent reports were released ?

Ignored them!

Both Governments sanctioned the projects without an independent review requested by both reports .

Now , since the Muskrat Project has begun it has run into all sorts of cost overruns and is now hovering around $12 billion according to NALCOR .

In the case of Site C , the final cost is unknown . But!

A new study by the University of British Columbia , just released calls
for the project to be stopped and a full independent review undertaken . It says , contrary to BC Hydro claims, that it is not the cheapest or cleanest alternative for the Province and that proper First Nation involvement was not done especially given First Nation legal action is underway yet the project was given sanction.

‘UBC Report

The merits of the business case and infringement on Treaty rights should have been assessed before Site C was approved. This is simple common sense.

Our research indicates that proceeding with Site C may result in hundreds of millions or even billions of dollars of unnecessary costs, for a project that will have an unprecedented environmental impact. It is imperative that the Site C Project be referred to the BC Utilities Commission, so that we can take a sober second look.’

Unfortunately , in Newfoundland and Labrador’s case , just a small band of commentators have taken up the obvious bungling . And although their comments and analysis have all been public , little traction has resulted.

In British Columbia’s case , it seems out of sight , out of mind with little substantial investigative analysis—-until now with the UBC report.

The manner in which these projects have been handled by the respective Provincial Governments should cause the public to rise up and demand accountability .


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