Cutting through the spin cycle of the new Site C opinion piece in the Vancouver Sun

Posted on by Laila

 

 

If there is one thing that surprises many people who are new to following provincial politics, it is how easily governments can manipulate policy and legislation that is in place to protect taxpayers.

A classic example is this:

Two days before the NDP revealed allegations by former executive assistant Tim Duncan that he had been directed to illegally destroy documents, the BC Liberals passed the new Information Management Act. Section 18 changes the law so that staff who improperly destroy documents will not face charges under the Offence Act.

Hard to believe government can just change the rules like this, but it happens all the time and in my opinion, far too often in situations where the benefit is clear and who benefits from the changes, even clearer. When the rules don’t work for them, they change the rules.

Which is why this opinion piece from Iain Black, CEO & president of the Greater Vancouver Board of Trade and a former BC Liberal mla, caught my attention: http://vancouversun.com/business/energy/opinion-ideal-time-to-build-site-c

While B.C.’s economy has outperformed the rest of Canada recently, the natural resource sector has been crippled by falling commodity prices. B.C.’s oil and gas, mining and forestry sectors have all been affected, resulting in economic hardships in many resource-dependent communities, and for professional services businesses in Greater Vancouver.

Fortunately, construction of B.C. Hydro’s Site C project has started, and its timing could not be better. First, interest rates are at historically low levels, reducing the cost of borrowing. Second, low commodity prices reduce the cost of materials — such as steel and concrete — and large hydroelectric projects require a lot of them. Third, the slowdown in the natural resource sector means there are a lot of available workers, reducing concerns about labour shortages.

Very rarely does a large infrastructure project start construction at such an ideal time. A decade ago, we witnessed the opposite during the construction boom leading up to the 2010 Olympics and Paralympics. Severe labour shortages and quickly escalating material costs wreaked havoc with many large public and private projects.

Site C, on the other hand, is well-positioned to avoid these challenges.

I get it – his job after all, is to promote and expand business opportunities for the economy locally and provincially. Mr. Black talks about the benefits to BC in jobs( many are and will be from out of province) and to suppliers (Camp trailers came in from Alberta already) then goes on to state that Site C has undergone decades of study and due diligence-which is only partially correct.

Site C has undergone years of studies but it can be factually shown – and I have several times already- that the single most important bit of due diligence intended to protect BC taxpayers, and Hydro ratepayers, will not be undertaken by the BC government.

This from Andrew Nikiforuk, included in a prior post de-bunking Energy Minister Bill Bennetts spin:

Bypassing the public’s watchdog

Given the huge cost to taxpayers and so powerful arguments against it, such a project deserves to be adjudicated by an impartial body with the public interest as its mission. That would be the BC Utilities Commission (BCUC).

The specific public mandate of the BCUC is “to ensure that ratepayers receive safe, reliable, and non-discriminatory energy services at fair rates from the utilities it regulates.” The only time the BCUC vetted the Site C project was back in 1983, and it rejected it.

This time around, the B.C. government excluded the project for any such due diligence, explaining “only duly elected officials have a right to make” such monumental decisions and not regulatory bodies specifically designed to provide checks and balances on political decision-making.

Economist Marvin Shaffer told The Tyee that “In my view, the government didn’t want the BCUC to review the merits and in particular the timing of Site C because it could well have been rejected by the Commission.”

“Virtually every ratepayer group including large power users and the wide range of general (commercial) users as well as the Public Interest Advocacy Centre would argue against building Site C at this time,” added Shaffer, a professor at Simon Fraser’s School of Public Policy.

Read the rest of this piece here: https://lailayuile.com/2016/01/08/cutting-through-the-spin-of-energy-minister-bill-bennetts-statements-on-global-bc-news/

While Mr.Black is welcome to his opinion,it’s clearly not in his best interests to try and impede business in any manner.Nor is it his job to ensure BC Hydro ratepayers and taxpayers best interests are protected. But the facts remain…

Fact: The government exempted this project from the only review that looks at the financial aspects of the project and balances them with the benefit or not, to BC Hydro ratepayers.

Fact: The 2014 joint provincial and federal review panel could not see a need for the project and advised that it be sent to the BC Utilities Commission for review.

Fact: That same bit of legislation that exempted Site C from review, also exempted IPP’s, or Independent Power Projects, which we know now BC Hydro is often paying to sit idle and NOT produce energy.

You can read about that bit of mismanagement here: http://www.canada.com/business/energy/hydro+spent+million+power/11842053/story.html

And here: http://www.desmog.ca/2016/04/05/b-c-hydro-paying-independent-power-producers-not-produce-power-due-oversupply

Fact: BC Hydro mislead the BC Utilities Commission once already,which resulted in an apology from the BC Hydro president,clearly demonstrating why this independent oversight is so critical. http://www.vancouversun.com/technology/hydro+boss+apologizes+inaccurate+testimony/11645238/story.html

Fact: BC Hydro borrows money to pay the BC government annual dividends, a foolhardy practice that is irresponsible and unsustainable – something we talked about here last year. https://lailayuile.com/2016/01/14/deception-and-privileged-secrets-are-common-facets-of-politics-transparency-accountability-on-site-c-lost-at-both-provincial-federal-levels/

These are all facts that are often ignored in the growing public relations this government is pushing to help get the project past the point of no return.

Facts that should not and must not be forgotten when reading opinion pieces like Mr. Blacks.  The best interests of both taxpayers who will be ultimately footing the bill and of BC Hydro ratepayers who will see very large jumps in Hydro rates, has not been protected.

This is why independent review of  Site C is a must. It just makes financial sense. Otherwise,let me welcome you to the very real potential for Site C to become a Muskrat Falls of our own. 

*Must reads on the growing dam fiasco back east”

http://www.cbc.ca/news/canada/newfoundland-labrador/david-cochrane-nalcor-broadside-1.3537950

http://www.thetelegram.com/Opinion/Columnists/2016-04-16/article-4496487/Russell-Wangersky%3A-Muskrat-Falls-then-and-now/1

bennettSiteC

17 thoughts on “Cutting through the spin cycle of the new Site C opinion piece in the Vancouver Sun”

  1. From Integrity BC: https://www.facebook.com/IntegrityBritishColumbia/photos/a.112357325512349.20587.110030995744982/1023175364430536/?type=3&theater

    Actually, not even close Bill.

    A letter to the editor yesterday in the East Kootenay News Online Weekly by Energy and Mines Minister Bill Bennett – Keeping rates affordable, investing in the future – caught our eye.

    We thought it would be an idea to set the record straight, but first a few points from last week’s Moody’s Investors Service’s credit opinion: “BC Hydro’s total reported debt has risen considerably since 2008, increasing from $8.1 billion as of March 31, 2008 to an estimated $18.1 billion as of March 31, 2016.”

    Hydro’s financial metrics “are among the weakest of Canadian provincial utilities” and those deferral accounts (net regulatory assets) have “more than quadrupled since 2009.”
    …
    FROM BILL BENNETT’S LETTER TO THE EDITOR: “In the past year alone, BC Hydro has completed the following capital projects: …The Interior to Lower Mainland transmission line, a 270-kilometre line stretching from Merritt to Coquitlam…The toughest section of the line, running across the Fraser River over two railways and a highway before going up and over a mountain near Spuzzum, was completed ahead of schedule.”

    You have to be joking?

    FROM THE GLOBE AND MAIL (21 APRIL 2015): “A series of conflicts and setbacks has plagued construction of a $725-million transmission line that would serve Metro Vancouver’s growing electricity demands, leaving the minister responsible refusing to predict when the project will be in service or how much it will cost.

    Flatiron-Graham won a fixed-price, design-build contract in 2011. Mr. Bennett said the problems began with “serious delays” triggered in part because the contractor brought in faulty steel towers from India that twisted, bent and collapsed. Between the spring of 2012 and the fall of 2013, the contractor tested five designs and Hydro rejected each one as substandard.”
    …
    FROM BENNETT: “Each year Hydro Quebec publishes a study that compares electricity rates across major North American cities. Last year’s study showed that the average bill for a B.C. household using 1,000 kilowatt-hours of electricity was $143.

    In Halifax, a typical bill is $223 and in Ottawa the average is $207. That means electricity bills for Canadians living in Ottawa are almost $800 more than the average annual cost in B.C.”

    Mr. Bennett, here’s the average high and low temperatures for Vancouver, Halifax and Ottawa in January: Vancouver 7°C high, 1°C low; Halifax 0°C and – 8°C; and Ottawa – 6°C and – 14°C. The average monthly bills are also higher, because it’s colder in the winter in Ottawa and Halifax.

    Even though he was citing a Hydro-Quebec document, he didn’t highlight the rates for Montreal or Winnipeg in his letter. Why? Because they’re cheaper than BC in both cities.

    Bennett also didn’t highlight the difference in MSP premiums between the three. Oh right, only BC has MSP premiums. And here’s the median family income for Bill’s cities: Ottawa ($94,700), Halifax ($76,500) and Vancouver ($67,090).

    Ottawa is tops out of 28 CMAs, Vancouver is in 24th place and Abbotsford-Mission is dead last.
    …
    FROM BILL BENNETT: “Over the last five years, BC Hydro has completed over 560 capital projects totalling almost $4 billion dollars – and delivered these projects almost two per cent under budget.”

    Too funny.

    FROM THE GLOBE AND MAIL (14 MAY 2015): “BC Hydro rejected a plan to update its information technology systems in 2008, concluding the new SAP software program would take too many resources and provide too little savings. In 2010, the Crown corporation went ahead with the switch anyway.

    Today, the 2008 prophecy is fulfilled: Incomplete and overbudget, the transfer is behind schedule and the promised savings have not materialized.

    “There were judgments made that cost money. They were mistakes,” Energy Minister Bill Bennett, who is responsible for BC Hydro, said in an interview Wednesday.

    “I apologize to the ratepayer for mistakes that were made in the past.”

    VAUGHN PALMER, VANCOUVER SUN (26 JUNE 2013): “With Hydro, the news was far from status quo. The capital plan, already the most ambitious in government, had been boosted by another $440 million in the space of a mere four months.

    Included were two new projects priced at $274 million and revisions in the cost of a half-dozen others, adding a further $166 million.

    The Northwest Transmission line was budgeted by Hydro at $395 million as recently as the beginning of 2011, but has undergone a staggering escalation in costs ever since. As of February of this year, it was listed in the budget papers at a hefty $617 million.”
    …
    Some quick final points:

    Funnily enough, Bill didn’t mention the cumulative rate increases between BC Hydro, Hydro-Quebec and, say, Halifax from 2007 to 2015. Here they are: 63.2 per cent, 17.1 and 38.7.

    And last year Hydro-Quebec turned a profit. A real one. A profit of $3.1 billion. No borrowing required. Hydro rates went up in that province on April 1 by 0.7 per cent, in BC by 4 per cent. Hydro-Quebec pays its CEO less that BC Hydro does.

    For other cost overruns at BC Hydro, please see the IntegrityBC thread.

    #bcpoli #vanpoli #bchydro @eastknow

    Sources:

    http://www.e-know.ca/regions/cranbrook/keeping-rates-affordable-investing-in-the-future/

    https://www.currentresults.com/Weather/Canada/British-Columbia/Places/vancouver-temperatures-by-month-average.php

    https://www.currentresults.com/Weather/Canada/Ontario/Places/ottawa-temperatures-by-month-average.php

    https://www.currentresults.com/Weather/Canada/Nova-Scotia/Places/halifax-temperatures-by-month-average.php

    http://www.theglobeandmail.com/news/british-columbia/conflicts-mar-transmission-line-project-as-completion-and-cost-still-unknown/article24057530/

    http://www.vancouversun.com/Vaughn+Palmer+Surprise+Hydro+cost+overruns+hard+believe+with+execs+part+premier+inner+circle/8590060/story.html

    http://www.cbc.ca/news/canada/montreal/hydro-québec-posts-net-income-of-3-1b-for-2015-1.3464289

    http://www.cbc.ca/news/canada/montreal/hydro-quebec-rates-increase-1.3481227

    Liked by 2 people

  2. Another good job! By you, of course. NOT them. I am curious, tho…have the Libs EVER done anything right? Seriously? Anything? Anything at all? It seems like just an endless litany of bad calls, decisions, unethical acts and ‘evil-doings’. Can anyone find even one thing they’ve ever done right? And…pullleeezzz….do not cite the Olympics.

    Like

  3. Guess with all the low commodity prices this project should come in way under budget. Anyone want to place a bet on that not happening?

    Like

    1. Not even possible in fact already on track to be well over budget-I think likely to end up in the $17 billion and up range if completed.

      That Muskrat dam story is why I find it hard to take anyone seriously who refuses the merit of the independent review recommended by the joint review panel.These are public dollars. With that comes public accountability.

      Like

  4. There now, that’s twice I’ve seen it.
    The above picture.
    The first time I saw it and again now, I thought Bennett was reaching across the brown jacket lady to hold Christybelles hand behind the podium.

    Liked by 1 person

  5. Given all the information over at Norm Farrell’s blog and the information on your blog, how any one can conclude we can afford or need Site C is beyond me. the debt load B.C. is carrying in addition to this Site C fiasco we will be Detroit North. Christy doesn’t care though. By then she and her cabal will have started to collect their pensions and their new positions with their “friends and supporters”.

    If Site C was truly going to provide jobs for those living in B.C. why did that job description cited by the Alaska High way News have a clause requiring the person to complete reports regarding TFWers and assist in recruiting them. Christy may be able to fool some of the people all of the time, but she isn’t going to be able to fool all the people all of the time. Of course by the time the voters have re-elected her next year, believing all her B.S., it will be too late to right the sinking fiscal ship of B.C.

    We don’t need this dam. We can’t afford this dam. Dam the B.C. Lieberals for forcing it on this province.

    Liked by 2 people

  6. Excellent work as always and an excellent comment add on.

    Minister Bennett would likely choose to forget/ignore facts when attempting to sell the dog that Site C really is. And never forget to include the value of a valley!

    Ryan @on the coast needs to do a little studying of the facts and work on his vocabulary as well before getting rhetorical. As shown above, just because a member of the current government says something, doesn’t make it true. He should remember that he isn’t the only one in BC with some means.

    Or maybe he pays for all services others use by himself. More likely that he is on a nice soft GCPE chair or a pay to play handout of some sort. But he can clarify that if he wants to.

    And something that is always forgotten is that BC Hydro And the BCUC are responsible to the ratepayers and taxpayers of the province, not the special interests of people like Mr. Black or the current government.
    The BCUC was put in place to protect ratepayers from this very thing.

    A deliquent government relying on a flawed “study” prepared by a party donator to spend upwards of $15Billion of other people’s money. And borrowed money to boot.

    Liked by 1 person

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