Question to Hon. Michelle Mungall about Site C
Site C is a major source of contention in British Columbia. Muskrat Falls in Newfoundland & Labrador is an example of government throwing good money after bad and resulting the cost overruns and the doubling of electricity rates to ratepayers. Adam Olsen asks Energy, Mines and Petroleum Resources Minister Michelle Mungall if the government is willing to accept this risk.\
[Transcript]
A. Olsen: We don’t need to close our eyes and imagine what will happen if Site C continues to be built. We can look to another Canadian jurisdiction that I fear shows us B.C.’s fate if we continue forward.
When the Muskrat Falls project in Newfoundland and Labrador was first sanctioned, the cost was supposed to be $6.2 billion, plus financing. That project is now $12.7 billion, all in. A similar escalation in cost is occurring with Site C. It started at $6.6 billion, and now BCUC is saying the actual cost could actually be up to $10 billion or more.
In Newfoundland and Labrador’s version of Site C, the impact of this cost increase on consumer rates has been profound. Nalcor hydro now estimates that the cost for Muskrat Falls dam will almost double current rates for their ratepayers. Our Premier has said that his decision on Site C will largely be decided on the net effect on hydro rates.
My question is for the Minister of Energy and Mines. If Site C continues to mirror the Muskrat Falls project, British Columbians may see a doubling of hydro rates. Is the minister prepared to make British Columbians pay the costs for the former government’s boondoggle?
Hon. M. Mungall: Thank you to the member of the Third Party for the question. Just to let him know, I’ve been following the issue with Muskrat Falls quite closely. It is a concern.
I think I’m going to take this opportunity, actually, to talk about something that the Liberals have mentioned a few times already today and before. It’s something that they’re actually denying, which is the reason for the cost overruns that were identified in the BCUC report — that, because we went to BCUC, we’re actually bringing to light.
Under their watch, in February, under the old government’s watch…
Interjections.
Mr. Speaker: Members.
Hon. M. Mungall: …was the first tension crack. In May, under their watch, was the second tension crack. These tension cracks are what has caused the present-day cost overruns and the present-day delays. That was under their watch, and they need to take responsibility for that, absolutely.
No doubt about it. We’ve corrected a wrong. We’ve gone to the BCUC. But at the end of the day, the B.C. Liberals failure to do that, failure to go to BCUC, and their mismanagement is going to be British Columbians having to foot the bill.
That’s truly unfortunate, and that’s why this government is going to be making a decision that works for British Columbians.
Mr. Speaker: The member for Saanich North and the Islands on a supplemental.
A. Olsen:There’s another parallel between Muskrat Falls and Site C. Just after Muskrat Falls was sanctioned, a risk management report was released identifying significant risks. The government at the time chose to forge ahead regardless — it sounds much like the minister’s first response — and are now left explaining a project that has spiralled in cost and time with real impacts for ratepayers.
This week we’ve learned that they are launching a public inquiry into how the project was allowed to get so far out of control, including why the public utility board was allowed to be excluded from oversight.
The B.C. government has its own report on Site C from our own independent regulator. The BCUC report confirmed that Site C is behind schedule and is estimated to come in substantially over budget. BCUC estimates the current cost is at least $10 billion or more, and the cost could even be higher. And we are only two years into a nine-year project.
My question is once again for the Minister of Energy and Mines. The lessons from Muskrat Falls are significant. Will you make the decision — where the government of Newfoundland and Labrador made the wrong decision — listen to the report you commissioned that has identified significant risks and stop this project while we still have a chance?
Hon. M. Mungall: Absolutely, this is a very serious issue for British Columbians. Due diligence was not done under the old government, but we’ve taken it upon ourselves under this new government — that we are going to do that due diligence, that we are going to look at this appropriately, that we’re going to put partisan politics aside, and we’re going to be working in the best interests of British Columbians. That’s how we’re going to be making this decision.
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