B.C.’s at-risk Site C dam is an omen for energy projects across Canada

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Adam Pankratz is a lecturer at the Sauder School of Business at the University of British Columbia. He is on the board of directors at Rokmaster Resources and an adviser on the Task Force for Real Jobs, Real Recovery, a coalition established to explore natural-resource solutions to support economic recovery in Canada.

B.C.’s long-suffering Site C dam is, well, suffering again.

On July 31, BC Hydro downgraded the overall health of its project to “red” in a report to the B.C. Utilities Commission. Geological risks have materialized, Hydro declared, threatening the stability of the dam, powerhouse and spillways. If that weren’t bad enough, construction costs appear to have gone well over budget; the $10.7-billion project has already burned through three-quarters of its $858-million contingency budget. The expected completion date of 2024 is now far from a certainty, and further structural and financial problems are all but certain to follow. The entire project is potentially at risk before even being close to completion.

For his part, Premier John Horgan says he is “profoundly disappointed” in the delays and overruns. “We put in significant oversight on this project and it hasn’t proven to be sufficient,” he told Glacier Media. But as disappointed as he is, he shouldn’t be surprised. Site C’s difficulties are a reminder that large infrastructure projects are profoundly complicated, even after they navigate the regulatory approval quagmire – and a warning for what could happen if Canada fails to provide better and more efficient routes for project approval.

Consider the Site C project from its inception. This was a project determined to do things right. BC Hydro undertook years of environmental review, First Nations consultation and local impact assessment, knowing that if any regulatory corner was cut, approval of the project would never happen. They assiduously followed the letter of the law, and indeed, it was approved by B.C.’s Liberal government in 2014. While construction began in 2015, the election of the BC NDP government threw the project in doubt two years later, but after a project review, Mr. Horgan allowed the work to continue, even if through gritted teeth. Nonetheless, we’re now six years into the project, and it’s still a minimum of four years from completion.

This type of timeline has become all too commonplace for large infrastructure projects in Canada. Threats of delay and cancellation loom at every turn. And pipelines have it even worse than hydro dams: Energy East was cancelled, and the Trans Mountain Expansion and LNG Canada are all going to take a decade or more before being fully built. Not even ports are exempt; Roberts Bank Terminal 2 continues to languish in futile obscurity.

Decade-long timelines are obviously unacceptable, but governments do not seem particularly interested in fixing the problem. Ottawa’s Bill C-69 is emblematic of this. Ostensibly designed to streamline the process for large infrastructure projects, it seems to cause more problems than it fixes: It has no cap on approval or rejection timelines, reduces the role of regional regulatory experts and does not prioritize local voices when gathering feedback. This will suffocate investment by raising risk and uncertainty. The refusal to prioritize local voices is also extremely puzzling: Why should environmental activists in Los Angeles have as much to say about a project in Northern Ontario as the citizens of Thunder Bay or Pickle Lake? Common sense appears to have capitulated to the baying hordes of Twitter’s perpetual campaigners, and the general trepanning of government policy and political discourse is the result.

Living in our age of ultraconvenience, it’s easy to forget that not everything can be done so easily. A hydro dam or a pipeline can’t be delivered in a single day by clicking a button labelled “build.” These large infrastructure projects are complicated, intricate and difficult. As Site C demonstrates, even a well-planned project by a world leader in hydro electricity can run into problems. Pipelines, meanwhile, have to cross huge swathes of rough terrain where unforeseen issues are even likelier.

None of this is to suggest that corners be cut. Environmental assessment must be properly done, First Nations consultation efforts must be meaningful and understanding local impact is essential. But all this needs to happen within reasonable time frames, or project approval and permitting will drag on indefinitely. Investors will fall away, and economic prosperity for Canada and good-paying jobs for hard-working Canadians will be the tragic casualties.

Large infrastructure projects may encounter delays owing to complexity and size. Their route to approval, however, ought not be subject to the same difficulty and uncertainty as their construction and completion.

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