Q&A: Premier John Horgan on Site C, trade mission to Asia

Premier John Horgan has a trade mission to Asia booked in the new year where he plans to talk LNG, but when he plans to visit Northeast B.C. remains to be seen.

Horgan has faced intense criticism and much praise across the province in the days following his decision to continue building the controversial $10.7-billion Site C dam—a decision he admits wasn’t easy and knows has left many of his supporters in the region seething.

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But the premier, fresh off his first session in government, maintains his hand was forced and that the project will prove its worth in the end—even if its cost continues to rise with uncertainty over who will buy its power and how it will be paid for, and how it will affect his relationship with some Treaty 8 First Nations.

The Alaska Highway News spoke with Horgan about his Site C decision, the need for its power, how he plans to pay for it, and what exactly he’ll be doing in China. The following has been edited for length and clarity.

Alaska Highway News: You have two major issues to address with Site C, the first is driving demand for its power. There is considerable time before Site C is finished and starts generating power. What’s your plan and where do you see opportunities?

John Horgan: We looked at the load forecasts that Hydro had projected, we looked at load forecasts that came from the utilities commission’s review, and we took the low end of those forecasts to make our determination on viability going forward. I’m optimistic clean, green energy will be in demand increasingly in the years ahead. We, of course, have to look at a project the magnitude of Site C—it’s, no pun intended, a generational project, and we’re going to see electrification of not just British Columbia but North America in the years ahead to meet our collective climate objectives.

We didn’t want to weigh heavily on that at the announcement because we’re seven years out from completion. We have forecasts that have been inaccurate year after year by Hydro, so we didn’t want to make bold predictions about the value of this asset to electrification. But it is undeniable that it’s not just the energy produced from Site C, but the capacity that also comes with the project that allows other renewables to come on stream and to be backstopped by the dispatchability of Site C.

It’s a long-term project and we have to think long-term. I’m confident that as we strive, all of us in North America, to meet our climate objectives that this power will be used.

AHN: The second issue is financing this project. Your government predicted rate increases of around one per cent in 2025 and 2026. Meanwhile, the previous government was developing a plan to sell green bonds to help finance its costs. Is this something your government will consider?

JH: Firstly, we have to look at what our borrowing needs are going to be for a range of issues across the spectrum, whether it be schools, hospitals, roads, bridges, transit infrastructure and so on. We have a pretty hefty capital plan, $14.6 billion in capital expenditures over the next three years, according to our September financial update. That’s very ambitious. We have to look at innovative ways to raise that money in the market. That also includes projects like Site C, and others.

But the fundamental challenge right now is to contain costs. We have the spillway and generation house contracts that are in the hands of BC Hydro now. They’re reviewing those, and that, of course, was factored in to increasing the budget expectation. The key element is to keep it at $10.7 billion and that’s why we’re going to have a new project management team that will include the private sector, government representatives from treasury to ride herd on contractor costs. That’s critically important to meet our objectives here.

But how we raise the money, not just for this project but for a range of other projects, is very much an active discussion with the minister of finance.

AHN: Your announced turnaround plan includes mention of new community benefit programs, but no details. What will these new programs include, and how will they add to the agreements already signed by communities here?

JH: There’s three key elements that we wanted to focus on in the announcement, and we haven’t fleshed those out in any significant way because we hadn’t made decision to go or no go until last week in cabinet. I didn’t want the public service to be working on programs that would not be realized and I wanted to make sure my colleagues and cabinet in the government caucus had every opportunity to make arguments and look at evidence before we started putting in place the mitigation that we’re going to need to diminish some of the impacts of this project.

The largest one, in my opinion, the largest challenge is reconciliation with indigenous communities. You know full well in the region there’s division on the project between indigenous and non-indigenous communities, in households. There are people that believe the project is not in the best interest of the province and there are people who believe it’s the only way to go. This plays itself out right across B.C. Even in my own household my spouse believed on balance the project would have a negative impact on a whole range of issues. So, we’re trying to work through those. Indigenous reconciliation is a key part of that and we’re going to have programs over time that will address those issues to the best of our ability.

The loss of agricultural land is paramount to people of British Columbia, so we want to make sure we were doing well more than the previous government was doing and having a dedicated stream of revenue that was coming from the project to put directly into food security, not just in the Peace, but right across the province. This is a provincial asset. It has a local impact, but it has a provincial impact as well, and that is our ability to feed ourselves into the future. So, food mitigation, agriculture mitigation is a key part of that.

And, lastly, we want to make sure we’re training more people. The current number of apprentices on site is woefully inadequate and we want to make sure that there are community benefit agreements. The public is spending, through BC Hydro, $10.7 billion. We want to make sure local companies get the maximum benefit from this, that we’re training the next generation of skilled workers, and that, most importantly, that everyone benefits from this expenditure, not just a select few.

AHN: The province has been threatened with a $1 billion treaty lawsuit and injunction. Do you believe your government can advance reconciliation with Treaty 8 nations who are still very much opposed to this project?

JH: The Treaty 8 Nations, West Moberly in particular, are absolutely entitled to follow the path that they’re on. I’m not going to say this was an easy decision, certainly not for them. But I had to look beyond the narrow and look at the broad, and the broad conclusion that I came to was that if we’re going to realize the objectives that we set as a government of genuine reconciliation, across the province not just in the Peace, we needed to make sure that we did not saddle ratepayers today with $4 billion in debt and to get nothing in return.

AHN: What are the next steps in terms of ramping up work and addressing landowners in the valley?

JH: That work will be ongoing. I have not directly reached out to the landowners. Nothing I can say at this point will ease the pain and disappointment that they have. I’m hopeful with some time will allow us to be able to sit down and work out the best way forward. But I absolutely understand and respect the deep disappointment they feel right now, and the last thing they need is for government officials to come in and say, ‘how can we help?’ I think we need to allow people to feel their grief on this and then we’ll do our best to pick up the pieces.

AHN: There is a photo of you circulating with a yellow stake with your name on it as part of a campaign to pay for legal challenges against the dam. Did you buy that stake, and what do you think should be done with it?

JH: Someone bought that in my name at an event in my constituency. There’s no getting away from the fact that I’ve been around this issue for decades. I was the energy spokesperson for the official opposition for a decade, I’ve been to the region many, many times. I understand energy policy, I’ve been on many sides of Site C over the years, depending on circumstance. I’ve never run away from that. If people want to make symbolism of a yellow stake they’re certainly entitled to do that. But that was purchased by someone at a meeting and was in my name, and I didn’t disagree with that. I didn’t want to discourage people from doing everything they could to get us to a point where we could have a genuine discussion.

People need to remember that had the BC Liberals won the election we would not have had this conversation. They would have continued to lead people with the impression the project was on time and on budget when it was not. They would have continued to think it was OK to have inadequate apprenticeships coming out of the project, and they may well not have worked to redouble our efforts for true reconciliation. This is not a decision we came to with enthusiasm, but it was a decision we had to make in the interests of British Columbia.

AHN: Do you plan visit to Northeast B.C. before the next legislative session?

JH: We’ll have to see. I’ve been to the region many times, I have not been since I was sworn in as premier. When the legislature sits I have to be in it and over the Christmas season I had not anticipated coming to the Peace. But certainly in the new year I will be up. I have very fond memories and positive relationships with many people in the region, and I look forward to being there soon.

AHN: Let’s talk natural gas quickly. I understand you have a trade mission to China in the new year, as well as meetings with LNG Canada. What are your priorities?

JH: I’ve been to Kitimat earlier in the fall. I met with LNG Canada officials as well as Kitimat LNG. You will know Kitimat is a community that welcomes industrial development. Kitimat LNG was the first out of the gate actually to start advocating getting the first export permit and are still working diligently to await the turnaround in prices so they can proceed.

LNG Canada, again, a large project that includes Shell Canada, three offshore companies, KoGas, Mitsubishi, and PetroChina. So when we visit Japan, Korea, and China in January, I intend to meet with those three companies and talk to them about their continued interest in a final investment decision on LNG Canada. We want to make sure that we can get our natural resources to higher-priced markets. The advent of hydraulic fracturing has meant North America is awash in gas and that’s driving the price down, making it difficult for producers in the Peace to succeed.

We’re fortunate to have a lot of liquids, particularly in the Montney, which has allowed projects like AltaGas’s propane export facility in Prince Rupert to be built. I visited that site as well. So, I think there’s a bright future for natural gas in the Peace and in British Columbia, but we want to make sure we’re meeting our climate objectives. We’re serious about reducing our emissions, I know the industry is as well. That electrification is part of that, as well as ensuring that indigenous people are full participants in these projects going forward.

That takes me back to, if I could, the reconciliation issue. We fully embrace the United Nations Declaration on the Rights of Indigenous People going forward. But the Site C project is 25 per cent complete and it’s not the same as talking to indigenous people about the impact of a new mine or a cut block or a drill site or a gas plant.

I think that’s important for you and your readers to understand. We fully expect to be working with indigenous people as partners in economic development. But in the case of Site C, it was already started before we arrived. There was litigation underway when we arrived, there will be litigation continuing on today.

editor@ahnfsj.ca

© Copyright 2018 Alaska Highway News

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