It’s taken some time to collect my thoughts about our Site C decision.
I want you to know that during and since the election I have discussed the matter with constituents on both sides of this issue. I thank all of you for the information you provided and your assistance in helping me make up my mind about such an important issue. As you may know, I would never have started the Site C project in the first place.
It is with a heavy heart that, after lengthy discussions with my colleagues in caucus, I reluctantly came to the conclusion that there was no choice but to complete the Site C dam project. I have come to understand that the cost of termination would saddle British Columbians with an immediate and unavoidable $4 billion in debt with nothing to show for it– using up new and existing capital and putting at risk our ability to deliver on a universal affordable childcare plan, housing, and new hospitals and schools. These were issues that my constituents in Burnaby North brought to my attention during the election. Since the election, people have come to me with crises that desperately need fixing. I’ve told many of you that help is on the way, but it might not have been if we had opted to cancel Site C.
Let me explain.
As you know, the BC Utilities Commission reported that, in their opinion, there were major costs associated with both completing the project and cancelling it. The next step for our government was to refer the BCUC information to financial experts for an analysis about the options available to us. Devastatingly, at this stage we received unambiguous advice that, while the cost of continuing or cancelling might be similar at face value, each scenario would be subject to very different accounting models, resulting in dramatically different impacts on people.
We were advised that if we completed the project, even if it went significantly over budget, it would be treated as an asset, the debt for which could be amortized over 70 years. On the other hand, if we cancelled the project we would immediately incur a debt of about $4 billion and, because this debt would not result in an asset, the annual servicing charges would be as much as $150 million, effective immediately. To make matters worse, we were advised that, whether we kept the debt on BC Hydro’s books or absorbed it into public finances, the increased debt load would put a downward pressure on our bond rating, bringing with it even higher interest charges for years to come.
Here’s an analogy. You take out a big loan to build a house. Once the house is built you own an asset even if you have an outstanding mortgage. However, if you decide to stop construction for whatever reason after the foundation has been dug, you still owe the original loan and the interest will be higher because you don’t have collateral. How do you make those much larger monthly payments? Cut back on food for the kids? Forego medicine that might ease the discomfort of an ailing spouse? These are the untenable choices your government faced. In the end, we stuck to our values by putting people before politics.
Like many of you, I am very unhappy that we were backed into a corner on Site C. The project never should have been started. I think there are so many better ways to create good family-supporting jobs, produce economy-sustaining clean energy, and enter into a more respectful relationship with First Nations. My anger is directed at the former B.C. Liberal Government, who began to fundamentally restructure the BC economy almost as soon as they took power sixteen years ago. They used BC Hydro and other crown corporations as private banks to obscure the consequences of their ideological zealotry. I believe their self-styled plan to take Site C “past the point of no return” was a deliberate attempt to make it politically perilous for us to try to take the government in a different, more people-positive direction.
I, for one, am encouraged by our Premier’s commitment to mitigate a decision that was forced on us by the previous government. He’s already committed to a Project Assurance Board to provide enhanced oversight, a $20 million agricultural compensation fund to assist affected farmers in the Peace region, a B.C. Food Security Fund, new community benefit programs, and working with Treaty 8 First Nations to seek additional solutions to mitigate adverse impacts of Site C. I know that the cabinet will be working on even more ways to move B.C. to a clean, renewable energy future and to embrace reconciliation with Indigenous communities.
Even if you are disappointed in the decision to build Site C, I hope we can keep the lines of communication open. Your ideas and opinions matter to me and continue to shape my decisions.