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The north Bala Falls are pictured in the township of Bala in Muskoka Lakes on June 7, 2014.

Matthew Sherwood/The Globe and Mail

A small hydroelectric project at Bala Falls in the heart of Muskoka’s picturesque lakes won’t be cancelled as Ontario Premier Doug Ford had initially promised because of the steep price of stopping construction.

Campaigning for the leadership of the Progressive Conservative Party in February, Mr. Ford told locals in Ontario’s cottage country the North Bala Small Hydro Project was a “big scam” and vowed he would cancel construction of the power station if elected premier. On Wednesday, Mr. Ford said cancelling the project would cost up to $100-million and that his government would instead invest money in protecting the Muskoka watershed.

“I wish we could cancel it, but the problem is you would leave a big hole in the ground. It would cost the taxpayers an absolute fortune. This was a massive mistake,” Mr. Ford said during an unrelated event in Milton, Ont., where he announced reductions to natural-gas rates.

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The construction of the 4.7-megawatt project has been met with local protest because of concerns the power facility could affect water quality in the Muskoka region and present safety risks to boaters in the area. According to builder Swift River Energy Ltd., the facility should be in operation for 40 years and power 4,000 homes while helping better manage water levels. Construction on the hydroelectric project should finish next year.

Mr. Ford blamed the previous Liberal government for approving the venture and said that after “endless consultation” with local groups, he was responding to concerns with a $5-million investment announced on Aug. 22 to help identify risks facing the Muskoka watershed.

“Their No. 1 concern, after consultations with the people up in Bala, was the watershed. So we’re going to invest with the community … they seem to be pretty happy,” Mr. Ford told reporters.

However, a community group opposed to the hydro project, Save the Bala Falls, said the Premier has not undertaken local consultations and that all requests to meet with Mr. Ford or any other senior officials have been rebuffed over the past month.

“He claimed that they have consulted extensively with the community. They haven’t. For over a month, we’ve been trying to contact the Premier’s office and we haven’t gotten through to them,” said Mitchell Shnier, a spokesman for the group. “It’s complete spin. It sounds like we’re talking to the Liberals.”

He said the local community has been “riled up” by Mr. Ford’s announcement; however, they still want to meet with the Premier to discuss the merits of cancelling the project. “It’s an absolute betrayal. People voted for him because of that promise,” Mr. Shnier said.

The New Democrats have called on Mr. Ford to honour his promise and cancel the project. The Official Opposition is opposed to the type of private power developments, such as Bala Falls, approved by the former Liberal government. Opponents of the project have said the public could end up paying millions in higher hydro rates over decades to help fund the facility.

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“Ford has some serious explaining to do. The Bala Falls generating station is a private contract to produce power that’s not needed in a town that doesn’t want it. Ford should respect the community, and do what’s right for Ontario instead of just what’s right for a few insiders. This project should be on hold,” New Democratic MPP Jennifer French said in a statement.

Ontario’s Green Party, which now has a seat in the provincial legislature, is also opposed to the private ownership of the hydroelectric project.

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