John Horgan’s $6 billion LNG giveaway

LNG-gift-BC

A bad deal for BC

by Eoin Finn B.Sc., Ph.D., MBA

The announcement – on World Water Day – that the NDP Government is to enact regulations and legislation to “make BC LNG competitive” caught many by surprise. Though the fine-print details are not yet available, the Premier’s announced provisions for all of BC’s wannabe LNG industry include:

  • A 20-year postponement of PST payable on construction materials (PST on these will be a hefty 7% on the 70%-or-so materials portion of the $40 Billion capital expenditure on liquefaction, treatment, storage, port and pipeline components of the project):
  • As an EITE (emissions-intensive and trade–exposed) industry, exemption from future carbon tax increases above the current rate of $30/ tonne all others in BC will be paying. (This is totally the opposite of the Government’s announced policy of “polluter pay”);
  • Elimination of the 3.5% LNG income surtax (already reduced from the 7% royalty rate originally announced in 2015);
  • Application of the BC Hydro industrial rate ($54/ megawatt-hour) for grid electricity service to LNG facilities. (This rate is half the current $110/ MWh residential rate, well below BC Hydro’s $120/ MWh marginal cost of new electricity from Site C and below its breakeven average rate of around $90/ MWh. Giving power away for half-price will make residential customers foot the bill via future BC Hydro rate increases – lest BC Hydro slide further into debt).

These are extraordinary measures for any Government – let alone one recently critical of the previous Clark government’s largesse to well-heeled LNG proponents, many of them large contributors to BC Liberal election coffers. And to an industry which has so far dismally failed to deliver on its promised 100,000 jobs, a debt-free BC and a BC treasury overflowing with a $100 Billion taxation bounty.

All in all- these concessions represent a gift of $6 Billion of taxpayer money – primarily to LNG Canada’s Kitimat project and spread over the expected lifetime of that project. If enacted, it will make all British Columbians, willing or not, silent partners in LNG Canada, a company jointly owned jointly by Shell Canada (50%), Petro China (20%), Korea Gas and Mitsubishi (both 15%).

So what’s the problem?

Simply put, the “deal” is woefully one-sided. We BCers are neither shareholders nor guaranteed creditors of the LNG venture(s) we may so generously give to. We failed to secure any guaranteed dividends or tax payments (as Qatar and Norway both did), there are no minimum employment quotas for British Columbians (Australia got those), there are no guarantees that profits won’t be siphoned off to tax havens via imaginative accounting practices (as happened in Australia, where that Government is suing Chevron to recover over $300 Million in evaded taxes. Woodfibre LNG’s owner, Sukanto Tanoto, appears prominently in both the leaked Panama and Paradise papers that expose the murky world of off-shore finance – this subsequent to his company being convicted and fined $250 Million for evading taxes in Indonesia), nor any guarantees that most of the construction work won’t be offshored to Korea or China and temporary foreign workers brought in to staff the project (as LNG Canada and Woodfibre LNG both plan to do. These LNG proponents are currently lobbying Ottawa and filing in Federal court, appealing for exemption from a 45.8% anti-dumping tariff levied on the Chinese and Korean steel they plan to use to construct their LNG plants there and float them into the BC coast).

Neither do we have assurances that selling our gas to Asia won’t cause supply shortages and a tripling of prices here, as has happened in Australia’s sad LNG experience. Add to those the perils of fracking and polluting First Nations land in Northeast BC and the difficulty this plant – emitting 8-9 million tonnes of GHGs every year – will create for BC’s 2050 commitment of an 80% reduction in GHG emissions (to a total of 12.6 tonnes, which this one plant would commandeer 80% if), and the rottenness of this deal for BCers becomes woefully apparent.

A BC LNG industry would struggle to be profitable (the only operating LNG export plant in the U.S. – Cheniere Energy – lost about $600M in each of the last 5 years). It would be another boom-and-bust industry (the very last experience many BC towns want to repeat), and would, even at its inception, be an industry already in its sunset years as the world transitions away from fossil fuels to avoid the worst of runaway climate change.

We should all admonish our Premier to stop this ill-advised giveaway of taxpayer money. Well-heeled proponents begging for tax concessions to “make them competitive” isn’t how capitalism is supposed to work. Rotten deal, John. Stop it!

myseatosky.org
efinn@myseatosky.org

Zero carbon or bust

carbon-pollution-by-sector-Canada

The oil and gas sector is our most polluting industry

by Peter McCartney

Prime Minister Justin Trudeau and Alberta Premier Rachel Notley have put together a climate plan that phases out coal power and brings in a carbon price. But they’ve done it with the explicit goal of justifying the expansion of our dirtiest industry: oil and gas.

Canada is the world’s fifth largest producer of oil and gas. We export fossil fuels all over the planet, despite knowing the harm they are causing. We hold some of the responsibility for those climate impacts, even if we didn’t burn the product ourselves. Here at home, the oil and gas sector is our most polluting industry. Any climate plan that doesn’t tackle these emissions will fail. And that doesn’t mean allowing the tar sands to expand while producing less carbon per barrel of oil. We need abrupt, absolute reductions in pollution, the kind that can only come from a planned phase-out. This means ending oil and gas exploration, stopping the proposed Teck Frontier tar sands mine and the Kinder Morgan pipeline. Ultimately, we need a plan to wind down the industry and support the workers who are affected.

Alberta has an example of how to transition workers out of a polluting industry. It provides financial support for coal workers to access further education, fund their retirement or relocate for new opportunities. It also funds economic development initiatives in coal communities. Why not expand this, with support from the federal government, to the oil and gas sector? Our leaders clearly see the need to wind down and transition one dirty fossil fuel industry, but not another. Any gains made by winding down the coal industry are lost as long as we plan to increase pollution from oil and gas, which is already 38 times more damaging.

There is simply no future for this industry and workers deserve a plan to deal with the aftermath.

Peter McCartney is the climate campaigner at the Wilderness Committee. Find out more about his work to take on Canada’s fossil fuel industry at wildernesscommittee.org and contact him at peter@wildernesscommittee.org, 604-683-8220, or mail to 46 6th Ave E., Vancouver, BC., V5T 1J4.

Government reaping royalties from GM Atlantic salmon

The Canadian government is receiving 10% royalties from sales of the world’s first genetically modified (GM or genetically engineered) animal, a GM Atlantic salmon.

“We’re concerned that the government is responsible for regulating this GM fish and also has a stake in its success,” said Lucy Sharratt of the Canadian Biotechnology Action Network (CBAN).

The royalties are part of a 2009 $2.8 million-dollar grant agreement between the company AquaBounty and the federal government Atlantic Canada Opportunities Agency. The royalties will be paid to the Government of Canada until the grant amount is paid back. If the GM salmon is not a commercial success, there is no requirement for the company to repay the government funds.

“The GM fish was developed with public funds, but without public consultation, and it’s being sold without labels,” said Sharratt. “If Canadians unknowingly buy GM salmon, the government gets 10% of the profit.”

In 2016, Health Canada approved the GM fish for human consumption. In 2013, the Minister of the Environment and Climate Change approved GM salmon production at Bay Fortune in Prince Edward Island (PEI) where GM salmon eggs are currently manufactured and then shipped to Panama for growing at a small pilot site.

The company AquaBounty must still seek approval from Environment and Climate Change Canada for commercial scale GM salmon production at their Rollo Bay facility in PEI, now under construction.

The Canadian Biotechnology Action Network, The Council of Canadians, Ecology Action Centre and Living Oceans Society are calling on the government to halt any further assessments of the GM salmon until it takes steps to increase transparency in the regulatory process and marketplace, including by establishing mandatory labelling of GM foods.

“We’re concerned about the next steps for environmental assessment because future repayment of the federal funds partly relies on the government approving the company’s next GM fish plant,” said Mark Butler of Ecology Action Centre in Nova Scotia, referring to the planned Rollo Bay site in PEI. “In this case, increased sales mean increased production and increased risk to wild Atlantic salmon.”

In Canada, there are no public consultations before a new genetically modified food, crop or animal is approved and no mandatory labelling of GM foods. “At the very least, consumers should know when they buy salmon just what they’re getting,” said Karen Wristen of Living Oceans Society.

AquaBounty is a majority owned subsidiary of the US biotechnology company Intrexon.

Source: Canadian Biotechnology Action Network (CBAN), www.cban.ca The Canadian Biotechnology Action Network (CBAN) brings together 16 groups to research, monitor and raise awareness about issues relating to genetic engineering in food and farming. The Ecology Action Centre is an environmental charity based in Nova Scotia. Living Oceans Society has been a leader in the effort to protect Canada’s oceans since forming in 1998.

Charging ahead with car sharing

modo Rav4 hybrid

Photo: Modo CEO Patrick Nangle at the wheel of a Rav4 hybrid. Image courtesy Modo.

Vancouver leads North America with about 3,000 shared vehicles. Now, if it could just electrify the fleet.

by Robert Alstead

Maybe we should have marked it on the calendar? Ten years ago: our personal car-free anniversary. The day we broke free from hefty insurance premiums, maintenance costs and parking fees. Free from the temptation to reach for the car keys when a bike would do. Free to use the precious space that had been liberated in our garage. Free from the responsibility – ecological and economic – that goes along with owning a car.

But then it never really felt like a clean break from motordom. We may have given up our worn-out 1991 Mazda 626, but after putting down $750 for joint membership in car share co-operative Modo, we, along with several thousand others, became owners of a whole fleet of vehicles.

Transportation in this city and province still revolves around cars. As our family has grown over the years from two to three to four, there’s always been the temptation to buy our own.

That we’ve remained car sharers this long is largely down to Vancouver’s increasing cycle friendliness, as well as reasonably good, albeit strained, transit system. Paying as we go with Modo has served us well when combined with our bikealot lifestyles, and the list of other options for those times when we need four wheels has just kept growing: Zipcar, car2go and Evo. Peer to peer Turo (“Airbnb for cars”) recently launched in BC and there’s even a hybrid bike/electric vehicle (EV) share, Veemo, being piloted at UBC. Actually, Veemos are three-wheels, but you get the picture.

Gearing up

When, a decade ago, we joined Modo, or the Co-operative Auto Network as it was known before its brand makeover in 2011, we booked a car over the phone and then retrieved the car key from a secure box at the back of the car. There were slips of paper to fill in with miles driven and gas bought at the beginning and end of every trip. Now, you can book by app, web or phone, in increments of 15 minutes. Trip logging is automated and you key in and out with an electronic, key ring fob. There’s a good variety of vehicles. We now have a 2017 Hyundai Elantra on our block where, until recently, the nearest family sedan was based a five-minute bike ride away. When elderly relatives visit, there’s various minivan options and a pick-up truck down the road is my go-to for lugging furniture. If we don’t drive during the month, we don’t pay anything.

Modo started life 20 years ago as an SFU thesis project with two cars and 16 people in Vancouver’s West End. Today, it has over 50 different vehicle models in a 600-strong fleet spread across Metro Vancouver, in Greater Victoria, Saanich and Nanaimo. The Co-op’s 18,000 members can book anything from an eight-seater Kia Sedona mini van in Fairfield, Victoria, to a 2017 Toyota Prius V at Vancouver City Hall, a 2015 orange Scion coupe at Lafarge Lake-Douglas SkyTrain in Coquitlam or a Nissan frontier truck outside Surrey City Hall.

It’s not perfect. Don’t try last-minute booking that seven-person mini van at long weekends. Plus, the two-way carshare model, exemplified by Modo and its counterpart Zipcar, where you have to return the car back to its home location at your pre-chosen time, can seem inflexible.

Modo’s fees have also been creeping up; in the last year, they went from $4 an hour and $0.40 per kilometre to $5 an hour and $0.25 for Modo Plus (i.e. shareholding) members.

“A price change is a pretty soul searching exercise here,” says Patrick Nangle, former CEO of Purolator who, as new Modo CEO, brought in new rates in August. “It’s the last thing ever we want to do because of our value proposition. Affordability is top of the list.”

Nangle defends the new pricing structure as necessary to cover basic operating costs, for better quality cars and better maintenance of vehicles so they’re not scratched and dented. They’re also cleaned more often.

Certainly, for occasional drivers like us, carsharing still means thousands of dollars a year saved over solo ownership, while enjoying the benefits of a diverse and regularly updated fleet of vehicles. There’s also those carsharing perks: being able to park in resident-only spaces, not having to worry about insurance and gas or changing the winter tires. It’s covered.

What’s more, Modo’s day rates, up to 250 km over 24 hours for $80, with taxes included, are hard to beat and the winter season overnight rates, from 7pm to 9am of $12.50 plus $0.25 per km, are a gift for night owls.

“We are a co-operative. We are owned by the members. It is sharing in the truest sense of the word,” says Nangle, in his small office in a tower opposite the Waterfront Skytrain station on Granville Street. “So we run the business just to break even and a little bit more than that. We’re not trying to make a big profit.”

Nangle is keen to press home Modo is not always the best option. He welcomes new entrants on Vancouver’s carsharing scene, seeing them as “complementary” rather than competition, and stresses that sustainability is part of the bottom line. While his wife needs the family Volvo to get to work, Nangle himself buses and bikes to work when he can. “We advocate very strongly in Modo to walk, ride your bike, use the bus first. If you need to use a car, use a shared car. But don’t take a car as your default choice to go three blocks to buy some milk.”

Are you going one way?

evo car share
Robert Alstead phot

Sometimes you don’t want to return a car to its original starting point as with the Modo two-way model. “Floating” or “one-way” car shares car2go and Evo, which launched in Vancouver in 2011 and 2015, have gone some way to filling the gaps, particularly as they grow their Vancouver fleets and expand the geo-fenced “home” areas in which their cars operate. The one-way carshare model is ideal for urban trips: going to a restaurant, cinema or ball game. You can book any free car via an app, drive to your destination and walk away.

Vancouver has the largest member base of the 11 North American locations that Daimler-owned car2go operates in, says Tim Krebs, the company’s communications manager. There are 137,000 Vancouver members.

Unlike Modo, with its diverse fleet, car2go’s 1,100 vehicles are a few select models: the familiar Smart cars, as well as more roomier Mercedes-Benz CLA and GLA models.

The car2go home area spans most of Vancouver and North Vancouver, with satellite parking at UBC, BCIT and the Pacific Gateway hotel for airport access. You can go outside the home area, but you must return back home to end your trip.

With BCAA-owned Evo, it’s been a similar story of rapid expansion. “We’ve grown the fleet from 250 to 1,250 in just a short two and a half years,“ says director Tai Silvey. As well as Vancouver, Evo is in New Westminster (since May), North Vancouver and university campuses like UBC, SFU and BCIT. It has satellite parking also at Grouse Mountain and the airport.

Evo’s fleet is 100% comprised of Toyota’s hybrid subcompact, the Prius C, a roomy hatchback that can fit five people and bikes or skis on the roof rack.

You can start an Evo trip using the app or, unlike with car2go, a dedicated keycard, with reservations possible up to half an hour beforehand. Customer support is good and a simple, but useful, feature is the Evo button on the dash to make hands-free calls to customer support.

Which one to join? A lot of people join both as membership fees are negligible and it gives you more driving options. Both companies also have promotions where they waive the sign-up fee and offer free minutes.

From carshare to EV share

car to go car share
Robert Alstead photo

In recent months, a succession of countries have announced they are going to ban conventional fuel combustion engine (ICE) cars, including China, India, the UK, Norway and France. Some cities will call time on gas-fuelled cars even sooner than national governments: Paris is going free from noxious car emissions by 2030, Oslo is turning roads into bike lanes for its 2019 ban and Oxford will phase in its ban, even on road gritters and garbage trucks, between 2020 and 2035.

GM is going all-in on EVs, Shell is buying up charging stations by the tens of thousands, and a rebranded Toyota doesn’t want us to call it a car manufacturer anymore; it’s a “human movement company” now.

Canada may still be pushing dilbit pipelines and its consumers buying bigger vehicles, but it is pricing carbon. At the provincial level, the BC government’s decision to remove bridge tolls may be exacerbating traffic congestion, but some form of mobility pricing is expected to replace it. “Greenest city” Vancouver has joined Paris and 10 other cities in pledging to de-carbonize the “major areas” of their cities.

The trend is clear

Around a quarter of BC’s greenhouse gas emissions are from road transport. Car share operators, who have a frequent turnover of vehicles in their fleets, would seem well-placed to take a chunk out of that. Not everyone can afford to buy a new EV. They probably can afford to share one.

However, there are only three all-electric carshare vehicles in Vancouver: Modo’s 2 Nissan Leafs and a Prius PHEV.

What’s holding us back? Lack of charging stations is the response from all of the car share operators I talked to. “I know the city of Vancouver is taking steps towards increasing their infrastructure, but there’s a long way to go,” says Evo’s Tai Silvey. “We’re very focussed on creating the greenest fleet possible,” he says, adding, “The first step to that in our opinion is hybrid and that’s why we have a fully hybrid fleet.”

Patrick Nangle says Modo has been gathering data on the duty cycle of 40 Modo gas vehicles to build a business case with Fraser Basin Council and West Coast Electric Fleets for evolving its fleet more quickly toward EVs. Currently, 20% of Modo’s fleet is hybrid or electric. “There is some subsidy from provincial government, but it’s still more expensive. We don’t believe people will pay more. So how do we make sure that we get the right level of utilization, the right economics on the car. We want to introduce more. We think it’s the right thing to do,” says Nangle.

Car2go already has exclusively EV fleets in Stuttgart, Amsterdam and Madrid with 1,400 vehicles in total. Yet the company retired its electric Fortwo Smart cars in EV-friendly Portland because the long charges meant the cars were out of rotation for too long. Last year, car2go switched its all-EV fleet in San Diego to gas after a major charging station provider went bankrupt. Parent company Mercedes Benz will be phasing out gasoline Smart cars for electric only, so the trademark tiny car will gradually be replaced in North American car2go fleets by the larger Mercedes GLA and CLA vehicles.

Vancouver has around 250 public, level 2 charging stations and, importantly, as far as hardworking shared cars are concerned, only one DC fast charging station, which the City of Vancouver runs in conjunction with BC Hydro at Empire Fields. Fast charging stations allow for top-ups that take minutes rather than hours, but cost much more to install. BC Hydro has set up 30 fast charging stations across the province since its launch in 2012, with around 27 more being planned as part of “Phase 2” of the fast charge network rollout.

By comparison, Amsterdam, which saw the launch in October of another free-floating, all-electric car share with 100 Hyundai IONIQ EVs, has 2,200 public charging stations with more fast chargers about to go into gas station forecourts.

City of Vancouver climate policy analyst Ian Neville says that Europe’s 220 volt electrical standard versus North America’s 120 volt system makes them a “little more advantaged.” Amsterdam’s municipal government also has more control over land use, which helps when it comes to putting in kerbside charging stations. But Vancouver can learn from Amsterdam’s experience.

“Part of it is it’s hard to predict right now,” says Neville. “We know with autonomous and shared, together that’s going to have a very different impact, but it’s a hard thing to plan infrastructure.”

BC Green Party leader Andrew Weaver has been calling on the provincial government to make it easier for industry to install charging stations and sell electricity. At the moment, businesses must register as a utility to resell electricity or give it away for free as Tesla has done for Tesla owners with its 10 BC Superchargers. “BC Hydro is the single biggest barrier to the introduction of electric vehicles in the province,” says Weaver.

Self-driving, wirelessly charging, shared pods may become common on city streets in the 2020s, but Vancouver’s immediate focus is on fast-charging public stations as well as steadily adding residential charging in new buildings. By 2020, the City expects to have deployed eight to 10 EHubs, which will have DC Fast Charging units plus Level 2 stations for charging over longer periods.

Given what we know about their impact on our climate and health, it’s clear that gasoline vehicles have outstayed their welcome in our cities. We are on the cusp of a huge transition in mobility.

Nangle points out that Metro Vancouver expects 700,000 people over the next 20 years. “At current ratios, they will bring almost half a million cars. So you’ve got this tidal wave of cars coming. So 3,000 shared cars today. I would be happy if it was 10,000. And it won’t be just Modo. It will have to be a combination of different kinds of business models to serve different kinds of needs. And better transit system, and better bike lanes, and, and, and…”

Please see March Common Ground for part two.

Robert Alstead covers transport, technology and climate change at www.icycle.ca

BC Hydro – until debt do us part

dark cloud of debt

by Reimar Kroecher and Eoin Finn

For most of its existence, BC Hydro, a publicly owned utility company, operated on a non-profit basis. Enough revenue was collected to cover costs and its customers benefitted from low rates. If there were any profits, they were reinvested into BC Hydro.

Sometime shortly before Gordon Campell’s Liberals swept into power in 2001, the NDP government had a change of mind and decided to demand a $300-million dividend from BC Hydro. Although criticizing the NDP for this while in opposition, the Liberals collected $5.8 billion in dividends during their stay in power. The Campbell government also dictated that all new power was to be purchased from private producers (IPPs) at rates far above the rates at which BC Hydro could produce it! That squeezed BC Hydro’s finances from two sides: high dividend payments to government and expensive power to be purchased from IPPs.

The obvious way out was to increase electricity rates substantially, but the BC Utility Commission, on orders from the provincial government, approved only modest increases. The members of the commission are government appointees, puppets in the eyes of many researchers. A second way out was to go into debt by selling more BC Hydro bonds. That was also disallowed because as BC Hydro’s debt increases, the triple A rating for all provincial debt could be lost and interest rates might rise as much as one and one-half percent. To get out of this dilemma, BC Hydro decided to introduce “Deferred Expenses” – treating expenses as if they are assets – in its accounts. The easiest way to understand this accounting concept is to look at the example of a house:

Mr. B owns a house and sublets it to Mr. H who rents it out to a large number of Mr. B’s friends. Mr. B does not want any return, so the rents are kept low enough to cover costs and there is no profit for Mr. B. He is happy and his friends like him.

The house is worth $100,000. The mortgage (debt on the house) is $80,000 so Mr. B’s equity is $20,000 ($100,000 minus $80,000) The ratio of debt divided by equity is four to one. The yearly income from the house is $30,000, exactly equal to the yearly expenses.

Now Mr. B has a change of heart and wants a dividend of $4,000 while at the same time the expenses on the house go up to $34,000. “Well,” says Mr. H, “we will increase the rent to collect $38,000 per year and Mr. B will get his $4,000 dividend and I will get $4,000 to cover the extra expenses.” “No,” says Mr. B, “my friends would be unhappy and would not like me anymore.” “Well,” says Mr. H, “we will borrow the money by increasing the mortgage by $8,000.” “No says Mr. B, “the bank would think I am a bad credit risk. My debt to equity ratio is four to one now and it would go higher than four to one;” 88,000 divided by 20,000, which is 4.4.

However, Mr. H has a plan: “We will ditch the internationally accepted accounting standards (IFRS), which don’t allow “Deferred Expenses” and instead use the more permissive American Accounting standards (FASB) which do allow such deferrals.” So here is what they do: they take $10,000 of the expenses and treat them as an investment in the house. They might take the gardening expense and maybe some pressure washing and gutter cleaning and claim that these are really not an expense this year, but improve the value of the house by that much. They also borrow $8,000 from the bank, by increasing the mortgage.

Now the house is worth $110,000, the debt (mortgage) is $88,000, the equity is $22,000 and the debt to equity ratio is four to one; $88,000 divided by $22,000. Clearly, Mr. B’s friends are happy because the rent has not increased. Mr. B is happy because he gets his $4,000 dividend while his debt to equity ratio has not increased. He maintains his AAA credit rating. Mr. H is happy because he can cover the extra expense of $4,000.

Both Mr. B’s dividend of $4,000 and the extra expenses of $4,000 were paid for by increases in the debt, yet the debt to equity ratio did not increase.

In this example Mr. B is the BC government, Mr. H is BC Hydro and Mr. B’s friends are the ratepayers. The house is equivalent to the various assets of BC Hydro. So we see that the dividends the province collected were paid by increases in BC Hydro’s debt. The same applied to its rising expenses. In fact, during the last 10 years, BC Hydro debt went up by some $10 billion, even though no new generating facilities were built. At the same time, using “Deferred Expenses,” the ratio of debt to equity did not go up so the government could continue to claim its annual dividend.

FASB, the American accounting standard, has two conditions: a) Deferred Expenses must be approved by an independent regulator, and b) they may not be deferred longer than 10 years. On government orders, BC Hydro blissfully ignored both of these. Deferred Expenses is an accounting trick that can mask the financial difficulty a company faces. However, it is not the only accounting trick concocted by the previous Liberal government. When BC Hydro requested rate increases of 9% and was only allowed 3%, it was instructed to show in its books what it requested, not what it actually received. So the books show 6% fictitious revenue that was never received!

It should be obvious that, when a company pays both for dividends and rising expenses by increasing its debt, and on top of that creates fictitious revenue it never received, year after year, that company is on a fast track to financial ruin. In BC Hydro’s case, that ruin could be prevented by the following policies:

  • No more dividends to the province for quite a few years.
  • Realistic electricity rate increases that cover expense increases.
  • An end to “cooking” the books and a switch back to internationally-accepted accounting standards. The books of BC Hydro right now are worthy of consideration for the Governor General’s award for fiction.
  • Replacing the current BC Hydro Board of political appointees with a new board of experts, whose mission should be to nurture BC Hydro back to financial health and to manage it in the best interests of ratepayers, not government. This new board must stop political meddling.
  • Cancel Site C.

If it continues on this course, financial insolvency is a near-certainty for BC Hydro, whose financial health will not be improved by borrowing at least another $9 Billion to complete Site C. Spread over the expected 70-year life of the dam, it will have to pay over $20 billion in interest payments on that debt. It must also pay back the borrowed $11 billion and pay the operational and maintenance costs totalling over $9 billion more. All totalled, the revenue from 70 years of power sales must cover at least $41 billion of these costs, excluding dividends to governments. To break even on that investment, it must sell all of Site C’s 5 terawatt-hours of energy at around $120 per megawatt-hour, 50% higher than today’s average consumer rate. But all indications are that there will be no domestic demand at all for this massive amount of extra power and the only option will be to export it at bargain basement prices.

The trifecta of sticky problems with this are that BC’s consumer demand has been decreasing as power rates rise, Alberta’s rates are now far lower than BC’s and wholesale power prices in the US have dipped below $30. If 100% of Site C’s power is to be exported at those prices, losses on the project could well balloon to over $23 billion, or $11,500 out of the pocket of every BC ratepayer. And that’s assuming borrowing rates stay below 4% for the entire 70-year period. Site C is indeed a very large gamble.

As a result of rapidly rising debt with no corresponding increases in real assets, equity will go negative. As that point, BC Hydro will be near-worthless and big, private-sector corporations will pounce and buy it for a pittance. Like vultures in a tree, eying a sick animal, they have been licking their chops for years to get their hands on North America’s best hydro facilities. Once privatized, rates will be set by demand and supply. There will be no publicly-minded utility commission. And the people of the province will have lost one of their best assets and control of our electricity rates.

Eoin Finn is a 40-year Vancouverite, a retired KPMG Management Consulting partner and a contributor to BCUC’s recent Site C review. He holds a Ph.D in Physical Chemistry and an MBA in International Business. Reimar Kroecher, MA in Economics, taught Economics at Langara College for 30 years. He is currently retired and lives in North Vancouver. For more information: citizensforpublicpower.ca

photo montage by Tom Voydh

Dave Barrett: when true socialism shaped BC and made it more beautiful

Dave Barrett

by Bruce mason

Dave Barrett’s recent death has inevitably brought to mind the first-ever NDP Premier’s legacy of brilliant public policies, which helped make BC a better place for everyone, every day, including you and me.

However, today, at least two of his signature policies are threatened. Public auto insurance, ICBC, is wrecked and a write-off. And the Agricultural Land Reserve, designed to protect farmland, is being diminished with the largest-ever removal of farmland by flooding the Peace River Valley for Site C.

In three short years (1972-1975), the Barrett government passed 350+ bills, an average of one every three days.

Barrett and his caucus created the BC Day holiday, Pharmacare and citizens’ right to sue government. They forced politicians to reveal donors, launched a daily question period and were the first to record and publish legislative debate in Hansard (the traditional name for transcripts of parliamentary debates in the British Commonwealth).

They dramatically expanded parkland and halted mining in them, banned pay toilets, put a stop to spanking in schools and jailing 12-year-olds, lowered the drinking age to 19 and enabled neighbourhood pubs. In Vancouver alone, we have the Seabus program, the preserved Orpheum Theatre and Robson Square.

And Barrett accomplished so much more: North America’s strongest labour code, consumer protections, human rights legislation, increased pensions for the elderly, increased support for the disabled, assistance for tenants, higher welfare rates and implementing the highest minimum wage in Canada.

Ninety-seven legacies are listed in The Art of the Impossible: Dave Barrett and the NDP in Power, 1972-1975, by Rod Mickleburgh and Geoff Meggs, who is now NDP chief of staff in the current minority government. In many ways, Barrett was 40 years ahead of his time and, hopefully, we’re now catching up. “None of the things we did, not one, was radical. Not one. And in the light of history that’s even more evident,” Barrett explained.

Dave Barrett was the youngest child of Isadore, a communist, and Sam, a twice-wounded Great War veteran who was gassed at Passchendaele and limped behind a horse-drawn fruit wagon before opening a fruit market on Powell Street in Vancouver. He was also the first Jewish born – albeit educated at Jesuit universities in Seattle and St. Louis – and the first socialist to hold BC’s top elected position. A champion of the little guy, he was an MLA for a quarter-century, an MP for five years and later headed two inquiries into the leaky condo fiasco.

Referred to as “little fat guy” by the press gallery, he self-deprecatingly nicknamed himself “Fat Li’l Dave,” laughingly, saying, “They’ve called me a Marxist. I say, ‘Which one? Groucho, Chico or Harpo?’”

He took off his shoes to jump on the table at a first cabinet meeting, shouting, “Are you here for a good time or a long time?” Revolutionary, compared to the cautious, current NDP, which stresses “affordability “ and “’administration over activism.” In contrast, Barrett bristled at an economic system even he never imagined would cause today’s obscene inequity. Redistributing wealth more equally, rather than consantly growing economy on our finite planet, was his life’s work, which he acted on rather than endlessly study.

Worth recalling is his first trip to Ottawa when Barrett told then-prime minister Pierre Elliott Trudeau, “I didn’t come here to B.S.” A far cry from today’s contrived, polite federal-provincial relationship. Also worth remembering: in 1983 when he was forcibly dragged out of the legislature at 4:30 am for refusing to withdraw a challenge to a Social Credit restraint and austerity program. A first in the 112-year history of the chamber, characterized even now by whipped back-benchers and spineless cabinet members on short leashes.

“In my political career I’ve always been blunt, very blunt. As a consequence, either people love me or they hate me. There’s not much middle ground. That’s really how I operate,” Barrett recalled.

I remember late August in 1972: Watergate, the Arab oil embargo, rampant inflation and reactionary right-wing politics. When TV took over, it was the toy department of journalism. Dave Barrett’s landslide victory was on the tube, everywhere, including a pub where I witnessed folks buying rounds, passing joints and hugging complete strangers, well past closing time.

A few months later, on the evening of the long-awaited day when live music was finally allowed in bars, my band was hired to play music. A few measures into the first song, the bar emptied as people lined up at pay-phones to call friends and family. It was a joyous time, much like the NDP functions I later played at and the live, paid gigs on BC Ferries.

Imagine that. I mention culture because it too matters. And Dave Barrett, deeply rooted in NDP principles, was music to our ears. His honesty, bold vision, unapologetic action and passion gave us the hope and justice we now urgently need to hear and see from BC’s legislature as we run out of time in 2018.

From revolving door to revolution in the patch: an interview with Kevin Taft

by Jeremy Appel

Why are ostensibly environmentally friendly governments, like the federal Liberals and Alberta NDP, still so attached to oil sands extraction, with its disproportionate impact on carbon emissions? Former Alberta Liberal leader Kevin Taft has an answer in his recent book, Oil’s Deep State (Lorimer, September 2017), and it’s one that many Canadians and Albertans will find unsettling.

Oil's Deep StateTaft argues that the oil and gas industry has developed a stranglehold over federal and provincial governments, as well as large swaths of academia and the media, corroding Canadians’ ability to meaningfully address the threat of climate change. I spoke with Taft about his analysis, how we got to this point and what the future holds for oil’s deep state.

Jeremy Appel: When we hear about the deep state it’s usually a reference to the power elite running the show in Washington, DC, despite Trump’s alleged goal to “drain the swamp” of corporate influence. What do you mean by the term in your book?

Kevin Taft: When I finished the manuscript, the term “deep state” hadn’t hit the popular agenda very much yet. In fact, it was a concern of mine and the publisher’s that the term wouldn’t really resonate with people.

It’s a term that goes back to the 1970s and has been used commonly in Europe, Turkey, the United States and Canada. What’s happened in the US since the Trump election is that the far-right has grabbed and torqued the term “deep state” for their own purposes and that’s what happens with political language, unfortunately.

I tried to bring some theory to the idea of a deep state by connecting it to the notion of capture. There’s a long history of literature studying how democratic institutions get captured by private interests. The question I had is what happens when a whole series of democratic institutions are captured and held by the same private interests?

What happens when the governing party, the opposition party, the regulators, the civil service, universities, for example, are all captured and held by the same private interest? I argue at that point you have a state within a state, which I call a deep state.

JA: How did the non-renewable energy industry get so powerful in Canada in general, and in Alberta in particular?

KT: It was a very slow process in Alberta. The oil industry here has been active for 100 years and gradually built strength. A key variable for Alberta is that we have a comparatively small population, so all of Alberta together has less people than metropolitan Phoenix or Seattle and we own the third largest oil reserves on the planet. This little population of Albertans owns more oil than all of Russia or all of the United States.

It’s an overwhelmingly large resource for such a small population. As that resource is being developed, especially the oil sands, the economic weight of that has bent our democratic society into a warped shape. It gives immense power to the private interests who have managed to gain control of that resource.

It’s very difficult for a government to manage a resource as large as the oil sands without losing control of the resource. I think that the only country who’s done that really effectively is Norway. We had a chance. In his first term or two, Peter Lougheed actually stood up and waged a struggle with the oil industry. He wrestled a lot of control away from the industry and into the hands of the people who actually own the resource, which is the government and people of Alberta.

Those successes of the early Lougheed years began to decline in the later 1980s and Ralph Klein’s election in 1992 led to a compete abdication of control of our oil resources, turning it over to the private sector. We’re going to pay a price for that.

JA: What happened in the intervening years, from Lougheed’s battle with the industry to Klein’s subservience to it?

KT: There was a broad shift in the social-democratic discourse through the 1980s. You had the rise, generally in the English-speaking world, of the right. You had Margaret Thatcher in the UK and Ronald Reagan in the US, as well as the Chicago school of economics, who became champions of markets and the private sector.

That was combined with a slowing in Alberta’s economy in the later 1980s and then a very deliberate and successful attempt, starting in the very late ‘80s and through the 1990s, by people in the industry, to take command of the Alberta government. You had, for example, a whole series of energy and finance and other cabinet ministers coming from the oil industry, spending a couple of terms in cabinet and then going back to the industry. It’s no surprise that those people took the royalty and regulatory systems and turned them to the benefit of the industry.

JA: How did your personal experience in Alberta politics inform your analysis?

KT: My experience had a profound shaping of my view. When I left politics [in 2012], I really left it completely. It was a couple of years after I left that I was invited by a university in Australia to give some serious thought to the relationship between fossil fuels and democracy.

As I began reading, thinking and studying the theory, I realized that everywhere I looked, when I was in office, the oil industry was right there. Whether they were lobbying me or when I walked over to the legislature, they’d be lobbying the government, financing the political parties, funding the universities. Everywhere I turned, there would be the oil industry. When you’re in the middle of it, that just seems normal. But after a couple of years away and doing more serious thinking, I realized it was the oil industry that was running Alberta, not the people of Alberta.

We have to remember the interests of the oil industry are not the same as the interests of the people of Alberta. That’s something Peter Lougheed said over and over again. The people of Alberta have to think like owners and we stopped doing that in the early 1990s. We’ve given up one of the most valuable resources on the planet.

JA: More recently, Ed Stelmach attempted to raise royalty rates and the industry responded by shifting its financial support from his PC party to the upstart Wildrose. What does this tell us about the machinations of oil’s deep state?

KT: Behind the scenes, there’s a very well-orchestrated campaign by the oil industry to control the public agenda. The backstory to the rise of the Wildrose party is part of that.

I spend the first two chapters of the book talking about oil lobbyist and former Stephen Harper adviser Bruce Carson’s court case in Ottawa. All the documents, emails, bank statements and minutes tabled lay bare some of the behind-the-scenes efforts and millions of dollars spent by the oil industry to get a grip on the civil service, Environment Canada, Natural Resources Canada, the political system, through cabinet ministers and prime ministers, top civil servants, the universities and provincial governments.

Of course, the public would never have a clue that that happened if a court case hadn’t allowed the police to actually seize these documents and computers and present the evidence in court. When I read through all those filings, it’s just stunning to see how systematically the oil industry works to orchestrate the public agenda, whether it’s pipelines, approval of oilsands expansion, undermining environmental initiatives.

This is not random chance. You can trace this back to a core, which is the command centre of the oil deep state in Canada: the Canadian Association of Petroleum Producers.

JA: What’s the way out of this situation?

KT: Change in Alberta is going to be forced from outside. That change is going to come in a few forms. One is that a very rapid shift in energy technology is going to unfold in the next decade. It takes away a good part of the market for Alberta oil, which will unfortunately bring Alberta’s economy to its knees, creating a political crisis in this province.

Another way out is the kind of citizen actions that we’re seeing across the country and around the world: the actions of First Nations, court actions challenging the pipelines and escalating civil disobedience.

Frankly, a form of energy revolution is coming that will put the end to the oil industry, but that’s not going to be clean and tidy. It’s going to be a long and messy process.

Originally published in The Monitor, www.policyalternatives.ca (Jan 2, 2018). Reprinted with permission. Jeremy Appel is a multimedia journalist and currently a reporter/editor with the Medicine Hat News. Kevin Taft is a best-selling author, consultant, speaker and former provincial politician in Alberta, Canada. His latest book is Oil’s Deep State.

Science betrayed: the crime of denial

by Elizabeth Woodworth and Dr. Peter Carter

Climate change denial has been led by industry disinformation, which, according to Merriam-Webster, is “false information deliberately and often covertly spread in order to influence public opinion or obscure the truth.”

A crime against humanity is, according to the Oxford Dictionary, “a deliberate act, typically as part of a systematic campaign that causes human suffering or death on a large scale.”

A brief look at the origins of denialism

unprecedented crime book coverIn 2010, a landmark book, Merchants of Doubt, showed how a small group of prominent scientists with connections to politics and industry led disinformation campaigns denying established scientific knowledge about smoking, acid rain, DDT, the ozone layer and global warming.

Written by Dr. Naomi Oreskes, Harvard science historian, and NASA historian Erik Conway, Merchants was reviewed by Bill Buchanan of The Christian Science Monitor as “the most important book of 2010” and by The Guardian’s Robin McKie as “the best science book of the year.” It was followed by the 2014 documentary of the same name, also widely seen and reviewed.

The research showed how the disinformation tactics of the tobacco companies in the 1960s to undermine the scientific link between smoking and lung cancer served as a model for subsequent oil company tactics suppressing climate change science.

Following the U.S. Surgeon General’s landmark report on smoking and lung cancer in 1964, the government legislated warning labels on cigarette packages. But a tobacco company executive from Brown & Williamson had a brainwave: people still wanted to smoke and doubt about the science would give them a ready excuse.

His infamous 1969 memo read: “Doubt is our product since it is the best means of competing with the ‘body of fact’ that exists in the minds of the general public. It is also the means of establishing a controversy.”

Tobacco industry executives never directly denied the mounting evidence that cigarettes were linked to lung cancer. Instead, they stated publicly that the science was controversial. In this way they managed to delay regulation and lawsuits until the 1990s.

When the global warming science began to emerge in the 1980s, the oil industry employed the same deceptions. The whole focus was now on creating doubt in the minds of the politicians, the media and the public about whether we really know for sure that climate change is a problem. Doubt, as the tobacco industry had learned so profitably, delays action.

When the IPCC was formed in 1988 and began documenting and publicizing the impacts of climate change, the climate disinformation campaign grew more intense. Big Oil employed the same tactics, arguments, vocabulary and PR firms that the tobacco companies had used to cast doubt on the dangers of smoking 25 years earlier.

The American Petroleum Institute convened a Global Climate Science Communications Team in 1998 to devise a plan targeting the media, schools, government officials, Congress and other influential groups.

The team’s mission, exposed in a leaked 1998 memo, was to initiate “a national media relations programme to inform the media about uncertainties in climate science; to generate national, regional and local media on the scientific uncertainties and thereby educate and inform the public, stimulating them to raise questions with policymakers.” They said victory would be achieved when:

  • Average citizens understand (recognize) uncertainties in climate science; recognition of uncertainties becomes part of the “conventional wisdom.”
  • Media “understands” (recognizes) uncertainties in climate science.
  • Media coverage reflects balance on climate science and recognition of the validity of viewpoints that challenge the current “conventional wisdom.”
  • Industry senior leadership understands uncertainties in climate science, making them stronger ambassadors to those who shape climate policy.
  • Those promoting the Kyoto treaty on the basis of extent science appears [sic] to be out of touch with reality.

A 2009-2014 study shows that climate change deniers promoting these uncertainties were prominently featured on CNN, MSNBC, Fox News, Fox Business, ABC, CBS, and PBS in a striking number of TV appearances – indeed three years after the publication of Merchants of Doubt. These deniers included the non-climate scientists:

  • Marc Morano (Bachelor PoliSci) from Climate Depot, 30 TV appearances.
  • Tim Phillips (Bachelor PoliSci) from Americans for Prosperity, 7 appearances.
  • Fred Singer (physicist) from the Science and Environmental Policy Project, 8 appearances.
  • James Taylor (lawyer), from the Heartland Institute, 8 appearances.

Although these men lack credentials in climate science and have been widely exposed as imposters, the major cable TV and networks still give them credibility on their free media platforms.

The corporate media has thus given a relatively small group of science deniers with financial connections to the fossil fuel industry immense influence in sowing doubt on the scientific consensus of human-made climate change.

Climate denial propaganda & influence continue to rise

In 2016, the Union of Concerned Scientists reported that “an in-depth analysis of eight leading fossil fuel companies finds that none of them has made a clean break from disinformation on climate science and policy.” The companies included were ArchCoal, BP, Chevron, ConocoPhillips, Consol Energy, ExxonMobil, Peabody and Shell. The industry has responded to the spotlight by intensifying propaganda through the agents below.

The Heartland Institute: In March 2017, the Heartland Institute began targeting the nation’s 200,000 science teachers by mailing each a copy of its new book and DVD, Why Scientists Disagree About Global Warming. The slick package stated that, even if climate change were real, “it would probably not be harmful, because many areas of the world would benefit from or adjust to climate change.”

The Koch Brothers: The multibillionaire industrialists Charles and David Koch are two of the most powerful people in the global oil industry, owning Koch Industries, a $100-billion conglomerate employing 100,000 people in 60 countries. They control 1-2 million acres of Alberta’s tar sands. The Kochs, bigger than either of the Democratic or Republican parties, manipulate both. A major focus of Koch money has been to ensure that no legislation is passed to curb the burning of fossil fuels. The brothers have gained pledges from 170 members of Congress that they will never support a tax on carbon. While attacking legitimate climate scientists, the Kochs were funding prominent pseudo-climate-scientists.

ExxonMobil: In 2015, we learned from its own research that Exxon has known since 1980 that global warming is real. Kert Davies, former research Director of Greenpeace USA, revealed through ExxonSecrets.org that, meanwhile, ExxonMobil’s climate change denial funding totaled at least $33 million during the period 1997-2016. “At least $33 million” because much of the funding has been channeled through dark identity scrubbing groups such as Donors Trust and Donors Capital.

Secret funding by coal companies: In April 2017, Peabody Energy, the country’s largest investor-owned coal company, declared bankruptcy, following Arch Coal and Alpha Natural Resources. In all three cases, court-ordered disclosures revealed creditors well known as climate science deniers. These included Chris Horner, who regularly disparages climate science on Fox News and has called for investigations of IPCC and NASA scientists.

As Dr. James Hansen had observed in 2012, this is “not an accident. There is a very concerted effort by people who would prefer to see business continue as usual.”

Whitehouse was one of the first in Congress to propose a civil case, similar to the racketeering suit Bill Clinton brought against the tobacco industry, against fossil-fuel companies for deliberately misleading the public on climate science.

Dr. Michael Mann sums it up: “The gulf between scientific opinion and public opinion has been bought with hundreds of millions of dollars of special interest money… The number of lives that will be lost because of the damaging impacts of climate change is in the hundreds of millions; to me, it’s not just a crime against humanity; it’s a crime against the planet.”

Climate change denial as a crime against humanity

As cited earlier, a crime against humanity is “a deliberate act, typically as part of a systematic campaign that causes human suffering or death on a large scale.”

We have established that the decades-long blocking and lying about scientific evidence on the dangers of human-caused global warming has been deliberate. So the question arises, how many people have been, or will be, hurt or killed by climate change?

Many studies have been done over time. To cite a few:

“Climate change is increasing the global burden of disease and in the year 2000 was responsible for more than 150,000 deaths worldwide. Of this disease burden, 88% fell upon children.”

According to a March 2017 report from the Medical Society Consortium on Climate and Health, “a quarter of Americans can name one way in which climate change is affecting their health. This is seen by physicians across the country.”

A 15-author 2016 report from the U.S. Global Change Research Program warns that people suffering chronic diseases such as Alzheimer’s, asthma, chronic obstructive pulmonary disease, diabetes, cardiovascular disease, mental illness and obesity are being threatened by climate change.

A global estimate was supplied by an independent report commissioned by 20 countries in 2012 to study the human and economic costs of climate change. The DARA study wrote that it linked 400,000 deaths worldwide to climate change each year, projecting deaths to increase to over 600,000 per year by 2030… Heat waves kill many, to be sure, but global warming also devastates food security, nutrition and water safety. Since mosquitoes and other pests thrive in hot, humid weather, scientists expect diseases like malaria and dengue fever to rise. Floods threaten to contaminate drinking water with bacteria and pollution.

When the report looked at the added health consequences from burning fossil fuels – aside from climate change – the number of deaths jumps from 400,000 to almost five million per year. Carbon-intensive economies see deaths linked to outdoor air pollution, indoor smoke from poor ventilation, occupational hazards and skin cancer.

When disinformation known to be false is systematically used to deny dangerous realities that harm public health and kill millions of people, the deception clearly crosses the line to become a crime against humanity.

Conclusion

The 2014 IPCC 5th assessment Summary for Policy Makers, along with previous IPCC assessments, is solid proof of the unprecedented crime represented by today’s level and rate of increase in atmospheric greenhouse gas pollution. It is definite because policy makers representing all world governments sit on the IPCC Panel and before the assessment can be published, they scrutinize the assessment line-by-line for government approval.

As governments from high-emitting countries continue – against the will of their own citizens and of the nations most vulnerable to climate change – to allow the global climate catastrophe to unfold, they simply cannot say that they did not know. Participation in formulating the IPCC summaries makes the large GHG-polluting national governments undeniably culpable for their continued lack of action to bring about a rapid decline in global emissions.

Not only have they betrayed the IPCC science. While doing so, they have pampered the lucrative fossil fuel industry with trillions of dollars in subsidies worldwide. But worst of all they have failed to protect their citizens – now and for future generations. This is the crime of all time.

Excerpted with permission from Unprecedented Crime: Climate Science Denial and Game Changers for Survival by Elizabeth Woodworth and Dr. Peter Carter (Clarity Press). Elizabeth Woodworth is a writer on climate change science and activism, co-author of Unprecedented Climate Mobilization and co-producer of the COP21 video A Climate Revolution for All. Dr. Peter Carter is founder of the Climate Emergency Institute. He served as an expert reviewer for the Intergovernmental Panel on Climate Change (IPCC) fifth climate change assessment in 2014. He is a former family and emergency medicine practitioner.

Why approving Site C could sink NDP

by Damien Gillis

cabin photo: Diane Perry

It’s getting down to the wire for the NDP-led government to announce its decision on Site C Dam. The corporate media and some big guns for labour have been making a sales push to throw the beleaguered project a lifeline and many fear they could succeed. That would be the biggest mistake the NDP could make. They didn’t create this monster, but they will own the consequences if they keep it alive.

There are three reasons given for carrying on with Site C: 1. We’d be throwing away four billion if we killed it; 2. We’ll eventually need the power; 3. The jobs!!! All of these are bogus and the cost of getting this wrong, for ratepayers and taxpayers (YOU), is astronomical.

A bottomless hole

Even if you buy the overstated remediation costs for the project, even if you accept the far-fetched premise of $4 billion lost (experts like the head of the Site C Joint Review Panel peg it closer to $3 billion), you’d have to consider the cost of not cancelling Site C. For once, let’s be frank. Even the BC Utilities Commission, when it found the project could easily exceed $10 billion, even go as high as $12.5 billion (up from Hydro’s estimate of $5 billion-6.6 billion in 2007), wasn’t fully appreciating how bad this could get.

money bucket
graphic by Damien Gillis

Just look at Newfoundland’s yet unfinished Muskrat Falls project, estimates for which have more than doubled from $6.2 billion to $12.7 billion. At $6.7 billion spent, many there say it’s past the point of no return (familiar), but Site C isn’t nearly that far along, so it should be viewed differently. The net result for Newfoundlanders will be an additional $150 a month in electrical costs per homeowner – forever! Newfoundland has a smaller population to absorb its cost overruns, but we’ve got our own share of problems to compound the damage from Site C. Think of the lawsuits from First Nations whose treaty rights are being undeniably violated (while both the provincial and federal governments tout UNDRIP – i.e. they know better).

But the biggest issue is the shaky ground on which the project is being built – literally. Way back in 2009, I interviewed a longtime farmer in the region, Dick Ardill. His family has been in the Peace going back as far as mine, the Beatties, who lost their ranch to the first big dam there, WAC Bennett. Dick must have been well into his eighties when I spoke to him, with a lifetime of practical knowledge of the soil and slope stability in the valley. He told me then the biggest reason not to build the project was the unstable land. He’d seen firsthand the Attachie slide of 1973 and many others over the years. The mixture of shale, clay and alluvial soils made for an awful place to put an earthen dam.

Slumping around the Williston Reservoir, circa 2008

The 80-kilometre section of the valley, from Hudson’s Hope to the foot of Fort St. John, where Site C was proposed was in some ways worse in this respect than where the Bennett Dam and Williston Reservoir were built (the Williston gobbled up far more land than originally contemplated, due to slumping, including my grandfather’s property above the planned reservoir). Granted, the Williston Reservoir behaves differently than would Site C, which is more a massive run-of-river project than a storage reservoir with large swings in water levels, but a 1991 report by geologist Norm Catto for the Ministry of Energy and Mines had this to say about the eastern Peace Valley, which includes the area where the dam itself is proposed:

“Thus, all of the major terrain units present in the eastern Peace River region are subject to slope failure. Extreme caution should therefore be observed in any effort to exploit or utilize river valley slopes.”

This report appears to have been ignored by Hydro in evaluating Site C.

Cracks in the dam

Flash forward to the tension cracks formed around the dam site and the hundreds of millions of dollars of cost overruns already attributable to these very stability issues and you see that old Dick knew what he was talking about. And here’s the thing: there’s no bottom to this problem. Like a highly leveraged 2008 stock deal, we have no idea how deep this hole gets. Ten billion? How about 15? Or 20?

tension cracks Site C geology
Site C Dam construction site with tension cracks highlighted (PVEA)

If everything went perfectly according to plan (the opposite of what has happened thus far), Hydro intended to have the dam paid off by 2094! That’s now blown, so what are we talking? 2120? 2150? How many generations of your descendants will be paying for this mistake? And what’s the interest on $20 billion amortized over a century, at much higher interest rates than we currently enjoy? (The BCUC rightly chastised BC Hydro for assuming low rates in perpetuity). In other words, what’s the real cost of this project? I could take a stab and say $60-80 billion, and you could say that’s just a wild-eyed guess. Then I would reply, “Exactly – I’m using BC Hydro’s methods.” (For the sake of argument, though, at a rate of 5%, $20 billion, paid off over 100 years, comes to roughly $100 billion in principal and interest. Just sayin.’)

Oh, and remember the NDP wants to do all this while freezing Hydro rates. LOL! If they’re serious, they’ll have to raise taxes or make massive cuts to social services. They can’t have their cake and eat it too.

According to Moody’s, the single biggest threat to our Triple-A credit rating is BC Hydro-related debt. In other words, Site C – piled atop all the sweetheart private power contracts and financial blunders the crown corp committed under the Liberals’ direction – will cost us our rating. Then up goes the province’s cost of borrowing – for all our debt – and the house of cards comes tumbling down. We’re worried about (at most) $4 billion in sunk costs, remediation and cancellation fees? Chump change!

But that’s not the worst of it. Dr. Vern Ruskin (PhD, MCom, BSc, Retired PEng [BC]) warned the BCUC of serious safety concerns, partly due to the above stability issues around the dam site. Dr. Ruskin is no less than the former director of BC Hydro’s planning division, responsible for planning, designing, budgeting and contracting more than 10 dams in BC, including WAC Bennett, Peace Canyon and Site C in its early stages. Among other things, Dr. Ruskin warned that changes made in 2011 to the original dam design pose increased risk of dam failure, as do these recent tension cracks and the instability they suggest.

The BCUC did not consider these concerns of Dr. Ruskin because dam safety was outside of the terms of reference for its review. But there is no reason the NDP-led government should ignore Dr. Ruskin. The enormous consequences of a dam failure – potential human injury and loss of life, widespread property damage – would make these financial concerns seem trivial by comparison.

“We’ll eventually need the power”

Here’s a thought: For the last decade, our population has been growing; we’ve been building bigger houses and acquiring more gadgets, but our power consumption has remained flat. Is it so wild a concept that 10 or 20 years from now same thing could be true? Our gadgets are getting more efficient, our building codes more stringent and we’ve seen an exodus of heavy industry, which once consumed a third of our total electricity. Wait, are we stopping raw log exports tomorrow? Did I miss the memo about a whole bunch of pulp mills reopening? Are there dozens of new mines breaking ground this year? Will BC defy global economics and magically produce an LNG industry after all the years of failure?

But let’s play this out, for the sake of argument. Say in 20 years we do need more electricity. We sure as heck wouldn’t be building Site C to supply it. At the rate renewables of all stripes are dropping in cost, we’d avail ourselves of the latest, best technology, which wouldn’t be a 70-year-old idea for a mega-dam. No less than the head of the Site C Joint Review Panel, Harry Swain, the BCUC itself, and other eminent energy experts not tied to Site C, Hydro or the government, have come to the same conclusion. We won’t need the power for a very long time and if and when we do, Site C will not be the best option, either environmentally or in terms of cost.

One final point that connects to the cost issue: since we don’t need this power, it will have to go into our grid and across our borders to customers in Washington State and Alberta. In real terms, it will cost over $110/megawatt hour (MWh) to produce, yet the going rate to sell this power has been hovering around $35/MWh for years. You do the math. Every megawatt produced carries a loss to the ratepayer.

But the jaaaawwwbs!!!

A few quick notes:

1. BC’s big unions aren’t getting these jobs; a different, quasi-union called the Christian Labour Association of Canada already has the lion’s share of this gig. It is also noteworthy that one of BC’s biggest unions, the BCGEU, has come out against the project so there is a divide within labour on the issue.

2. We keep hearing 2,000 jobs – balderdash. With a series of layoffs and a significant decline in vehicles and visible work on the property – much of that related to these tension crack issues – local sources suggest the real number of workers is far lower than Hydro and the government claim, pegging the number at 500 or less. These jobs are temporary and have come under criticism for allegedly unsafe conditions.

3. If we’re prepared to spend large quantities of tax dollars and hydro fees simply for a make-work project, there are far better ways to employ far more British Columbians for far less money, as a new analysis from UBC’s Program on Water Governance underscores.

This jobs argument is the weakest link of the pro-Site C camp and the NDP should treat it as such.

NDP deciding its own future

If Site C proceeds, this could be the one and only time John Horgan and his NDP cabinet are sworn in by the Lieutenant Governor (Photo: Province of BC / Flickr)

The costs to ratepayers and taxpayers, along with all the other impacts on farmland, First Nations and the environment, are impacts Site C would have on British Columbians, fauna and flora. But the NDP would be wise to consider the impacts the project would have on them, politically. Had the BCUC come out with rosy outlook for the project, that would perhaps have given them some cover to continue forward. It didn’t. Now, the ball is in the current government’s court and it is not only deciding the future of Site C, but its own future.

NDP in deep
Jonathan Ramos cartoon

Many in the environmental community appreciate the moves the NDP has made thus far: (partially) banning the grizzly hunt, (sort of) taking a stand against Kinder Morgan, reviewing professional reliance, reviewing Site C. Yet I have spoken with many colleagues and seen scores of comments on social media to the effect that if the NDP proceeds with Site C, they will abandon the party.

On the flip side, if the NDP kills Site C, will it lose labour votes? Will union lobbyists Bill Tieleman or Jim Quail turn their backs on the party? Hardly. It’s unclear what the Greens will do in the short term, but this delicate, temporary arrangement will be severely strained and, in the long run, Site C will further drive a wedge through the Left, causing the NDP to lose votes in the next election. This will all be compounded by the fiscal woes that will accompany this inevitable boondoggle. Just look to Ontario and Newfoundland to see the political fallout from poorly made decisions on large-scale energy projects.

Green MLA Sonia Furstenau said it best in the legislature [in late November]: “Up until now, this has been a BC Liberal boondoggle. The cost overruns, the ballooning debt, the questionable need for such a costly project: this is the Liberals’ mistake alone. But if the government decides to continue with Site C, they will become responsible for the impacts. It will be on the shoulders of this government.”

Indeed, if this government chooses to flood the Peace Valley (again), we may look back in years, drowning in unbearable power bills and debt, and realize that 2017 was the NDP’s high watermark. Then came the flood.

Posted November 29, 2017 by Damien Gillis in Economics. Damien Gillis is a Vancouver-based documentary filmmaker with a focus on environmental and social justice issues, especially relating to water, energy and saving Canada’s wild salmon. He is co-founder of the online publication the Common Sense Canadian.

At mid-term: a Justin Trudeau report card

Justin Trudeau observing eclipse

It’s two years since he swept to power, high-fiving with one hand, promises for “Real Change” in the other. So right now, on the post-honeymoon anniversary of his election to majority government, halfway through his mandate, it’s time to take a full, accurate measure of our 23rd Prime Minister, Justin Trudeau.

The TrudeauMeter offers a starting point and an ongoing gauge.

This non-partisan, collaborative citizen initiative is specifically designed to track performance on his platform. It lists 226 promises, spelled out in Liberal literature, speech-ified and selfie-fied during the federal campaign.

Check off 59 promises made good, but also note well: work hasn’t yet begun on precisely the same number: 59. There are 72 works in progress.

A useful word, going forward, is “porkies.” According to dictionaries, it’s cockney slang for shaded white “lies” as in, “Canadian Prime Minister Justin Trudeau has been telling ‘porkies’ again.” According to the TrudeauMeter, he has flat-out broken, and downright abandoned, a whopping 36 promises to millions of Canadians, who took him at his word and got him in (and Stephen Harper out) by, in many cases, voting strategically.

The biggest fish he hooked, reeled in, used as bait or chucked overboard were electoral reformers, the environmentally inclined, the awakened millennials and First Nations.

Justin Trudeau, in the Canadian cliché, “campaigns on the left, governs on the right.” The run-up to power takes place in a less-bloodied kettle of fish. Also swimming, circling Parliament, are schools of lobbyists, assorted sharks, bottom feeders and bureaucrats, entrenched in the old power game of government.

Full marks for electoral showmanship, possibly gleaned from his part-time job teaching drama. Most unfortunately, Justin Trudeau, like far too many victorious politicians, in a post-campaign role, is now dancing with those ‘who brung him,’ the greedy elites who hold the real strings – the purse strings – and select and play the tunes.

The rest of us, the vast majority, are mere sidelined wallflowers, Still, a number of grateful Canadians would likely give the Libs a passing grade, another whirl, just for erasing “Harper” from the national dance-card. Perhaps enough, two years hence, for a nod to stay on as a minority prom-king. Some will continue to hold their noses while pointing south to the stench of a madman and his company of conspirators, fleecing and disassembling all remaining reason, resources and democracy below the border. To be fair, in context, the worsening dystopia of Donald J. Trump was beyond even our former prime minister, who trumpeted, “Nice hair, but Justin’s not ready.” Few, if any, were fully prepared.

Canada still looks good in comparison, while charting a best-course scenario through the unforeseen, current tsunamis of dangerously troubled waters, rippling and ripping northward. Endangered are trade, the economy, border security, immigration and foreign policy, etc., as well as life itself, through climate implosion or nuclear explosion.

Notable among Justin’s 59 check marks for jobs done: finally bringing 40,000 Syrian refugees to this privileged country, releasing unprecedented, public ministerial mandate letters, unmuzzling government scientists, restoring the mandatory long-form census, persuading provinces to impose low-hanging carbon tax, establishing protocols for decriminalizing medically assisted death, the Canada Child Benefit and an equal number of women and men in Cabinet. When asked “Why?” regarding the latter, Trudeau answered, “Because it’s 2015!” That went viral and global, along with the announcement in Paris during the woefully inadequate international climate accord, that “Canada is Back.”

Voters must also not forget his assurances on election night: “We are committed to ensuring this will be the last federal election using first-past-the-post” and “Meaningful ‘nation to nation’ engagement with Indigenous peoples to secure free, prior and informed consent.”

Surely “Real Change” is really just empty promise and stage-craft, unless it plays out in real-life. And we’re now nearing 2018.

There are more than enough disappointing failures to reverse many Harper initiatives and broken promises for us to take issue with: pay equity legislation; marijuana legislation; a plodding, infuriating national inquiry into missing and murdered indigenous women; the $15 billion Canada received to provide armoured vehicles to Saudi Arabia, while there are still no funds for the 100+ indigenous communities that lack potable water; forecasted $10 billion deficits, now $23b, projected to soon tally $28.5-billion; the outed, tax-evading Finance Minister and his suspect two budgets; increasing lack of free access to information (Canada now ranked 46th, between Peru and Bulgaria); big buck infrastructure work, being doled out from the Commons to private predators – ad infinitum.

In arguing for a mid-course correction, Elizabeth May has posted detailed, teacher-like, subject-to-subject second year Liberal letter grades on the Green Party website. From a purely west-coast perspective, let’s give the federal Liberals a generous, encouraging C-minus; their leader, a hard and fast D-plus, with lots of room to roll up his sleeves for needed improvement.

In two years, Canada’s cautious optimism has churned and morphed into brick-like cynicism. Justin Trudeau has squandered his, and our, potential. He’s out-of-touch and tone-deaf to the growing chorus of Canadians struggling for a living wage to pay rent, let alone save up for a down payment on a house, post-secondary training or decent childcare.

“Canadians do not expect us to be perfect; they expect us to be honest, open and sincere in our efforts to serve the public interest,” Trudeau opined.

To paraphrase time-honoured report cards, “Justin gets along well with others, but must apply himself to important subjects such as environment, electoral reform and Indigenous rights.”

Trudeau, the second, has two years until finals, to cut to the chase, pull up his designer socks and cut down on selfies and play-acting. And above all, cut out the porkies.

Bruce Mason is a Vancouver and Gabriola Island-based banjo player, gardener, writer and author of Our Clinic.