Peace River Frack-Up Bombshell

Part 1 of a report on how fracking poses risks to BC Hydro’s Peace River dams

Read Part 2 of the report

The WAC Bennett dam impounds the world’s seventh-largest reservoir. In 2012 a BC Hydro employee speculated a fracking operation may have caused a sudden change in the reservoir’s water levels. Photo: Jayce Hawkins.

BC Hydro has known for well over a decade that its Peace Canyon dam is built on weak, unstable rock and that an earthquake triggered by a nearby natural gas industry fracking or disposal well operation could cause the dam to fail.

Yet for years, knowledge of the dam’s compromised foundation was not shared widely within the Crown corporation. It was even kept secret from members of a joint federal/provincial panel that reviewed the Site C dam, now under construction 70 kilometres downstream of Peace Canyon in the Montney Basin—one of the most active natural gas fracking zones in British Columbia.

The disturbing revelation is among many contained in hundreds of emails, letters, memos and meeting notes released by the publicly-owned hydro utility in response to a freedom-of-information (FOI) request by the Canadian Centre for Policy Alternatives, BC office.

The documents show that BC Hydro officials knew from the moment the Peace Canyon dam was built in the 1970s that it had “foundational problems,” and that if an earthquake damaged the structure’s vital drainage systems it could be a race to stabilize the dam before it failed.

The documents also show that BC Hydro’s concerns about threats to the dam were discussed “at the highest level” within the provincial government ten years ago, but that unidentified provincial Cabinet ministers at that time rejected taking any action.

The documents have been augmented with a raft of emails supplied by a former BC Hydro construction manager, who oversaw $350 million in retrofits at the Peace Canyon and WAC Bennett dams in 2007, and who is speaking out publicly for the first time about his concerns.

A compromised foundation

Built in the late 1970s, the Peace Canyon dam lies a short distance downriver from the massive, earth-filled WAC Bennett dam, which impounds Williston Lake—the seventh-largest hydro reservoir on earth by water volume. The FOI documents show that the dam was built on top of layers of sedimentary rock, including shale—a rock known to be difficult to work with when big engineering projects are involved.

“A number of weaker bedding planes were identified underneath the dam during construction. Some of these exist directly below the dam within the foundation, and shear tests on bedrock core samples indicated shear resistance that was significantly lower than originally anticipated during design,” reads one internal report on Peace Canyon prepared by BC Hydro in 2017. “The dam is marginally stable under full uplift considerations, which does not meet modern design practice.”

The discovery was a bombshell. Since the shale rock underlying the dam was more susceptible to shearing or breaking than previously thought, it was vital to prevent any industrial activities nearby that could possibly trigger earthquakes.

But that knowledge was not widely shared within BC Hydro itself, even when disturbing tremors started to be felt at the dam in 2007—more than 30 years after problems were first detected. MORE

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Peace Canyon dam at risk of failure from fracking-induced earthquakes, documents reveal

Are there alternatives to free trade?

Squeezed between nativists who seek to obliterate the world trading system for their own purposes and neo-liberals who want to use trade regimes to erode public power, the ongoing debate is missing a vision of a progressive system of trade rules. Too often, progressives end up rejecting trade agreements instead of proposing avenues for transforming world trade.

To address some of these questions, the Canadian Centre for Policy Alternatives and the Trade Justice Network held a day-long symposium in Ottawa on October 30 titled “Beyond Neo-Liberalism: Toward an Agenda for People and the Planet.”

In a keynote address, Maude Barlow, Honorary Chairperson of the Council of Canadians, set the scene for the discussion. She asked, “What would trade agreements look like if they prioritized the needs and rights of workers over corporations? What would they look like if they promoted a more sustainable model of food production that protects soil and water and respects farmers? What would they look like if they had to take into account their water and environmental footprints at home and in other countries? What would they look like if they promoted alternative, more sustainable sources of energy? What would they look like if, instead of giving preferential treatment to global corporations, they established binding human rights and environmental obligations on corporations and placed capital controls on runaway speculation of the kind that caused the 2008 crash? What would they look like if they took into account the free, prior and informed consent of local indigenous people now enshrined in the UN Universal Declaration on the Rights of Indigenous Peoples?”

For example, it is evident that investor state dispute settlement systems give multinational corporations power over what countries can legislate. And this has cost us money. Regulatory cooperation and trade rules have been used to ensure that public policy is measured by how it enhances trade rather than public welfare. It leads governments to favour multinational suppliers over local production.

As Barlow says, “Modern free trade agreements, along with deregulation and privatization, have led to the greatest wealth disparity since the robber barons of the turn of the 20th century. Of the world’s top economies, 31 are countries and 69 are corporations. Apple’s revenues exceed the GDPs of two-thirds of the world’s countries. Walmart’s annual revenues exceed the GDPs of 157 countries. BP is bigger than Russia. Exxon is bigger than India.”

Workshops at the symposium discussed drug pricing, environmental policy and the Green New Deal, overhauling dispute mechanisms to address environmental and human rights concerns, digital rights, Indigenous rights, food sovereignty, labour standards, cultural diversity and human rights in general.

Howard Mann, an advisor on international law, concluded by saying that trade agreements have little to do with trade, itself. Countries are told they are adapting poorly to trade agreements, he noted, but it is trade agreements themselves that in fact create social problems such as income and gender inequality, unemployment and environmental degradation. SOURCE

The NDP’s Wealth Tax: What the Experts Say

Singh says it will help reduce economic inequality, but new approach is widely debated.

JimmyPattisonWalkOfFame.jpg
The NDP’s tax on the ultra-rich would affect billionaires like Jimmy Pattison. But is such a tax the best way to reduce inequality? Photo by Chris Young, the Canadian Press.

The NDP’s promised wealth tax on the ultra-rich would be a new step to reduce economic inequality in Canada, but quite a modest one compared to proposals being debated south of the border.

And while enthusiasm for a wealth tax is understandable when economic inequality is higher than it’s been since the 1920s, there are better ways to structure the tax system, said David Duff, a University of British Columbia professor who is an expert on tax law.

“I’m not a huge fan of wealth taxes,” Duff said. “Although in principle I would be opposed, I can understand the context for this… We live in a world where we have not taxed, in particular, capital income, certain kinds of income, to the same extent that we tax labour income.”

Policies like taxing capital gains at half the rate of other forms of income or allowing CEOs to be paid in stock options have allowed some people to accumulate large fortunes.

The NDP’s wealth tax would charge one per cent each year on the value of household assets above $20 million. It’s the only party proposing such a tax.

“It’s a wealth tax on those who are very, very, very wealthy,” NDP leader Jagmeet Singh told The Tyee.

The idea is to make sure people at the very top would pay their fair share, he said. The tax would raise about $9 billion a year from fewer than 2,000 people, Singh added.

Reaction to the proposal to tax wealth has been mixed, with progressive commentators more positive than conservative ones.

column by Matthew Lau in the Financial Post called the proposal “class warfare” and said, “The NDP’s plan for a wealth tax, however, breaks a sort of glass ceiling on the worst taxes proposed in Canada.”

Another Financial Post piece by Montreal Economic Institute researcher Gaël Campan said that while the proposal sounds good, it would be a “tragic mistake.” (The institute has been described as “a kind of Fraser Institute in Quebec.”)…

Canadian Centre for Policy Alternatives senior economist David Macdonald, meanwhile, argued that the proposal addresses the rise in economic inequality that he and others have long tracked in Canada.

“The wealthiest families in Canada — representing fewer than 100 families, each with net worth over $1 billion — have accumulated more wealth than the bottom 12 million Canadians combined,” he wrote. Those 100 families would pay half the amount that the NDP’s tax would raise.

Macdonald did sound a warning. “Because this tax applies to a very small group of very well-resourced people, their accountants will be busy looking for ways to avoid or at least mitigate it, as the wealthy in other countries have successfully done,” he wrote.

“For legislation of this sort to be effective it would have to be strong, with loopholes identified and quickly shut down, which can certainly present challenges.”

Erika Beauchesne of the advocacy group Canadians for Tax Fairness wrote that while her organization has been promoting an inheritance tax that would apply at death instead of annually, action on inequality is needed.

“The question and debate should no longer be whether we have increased taxes on wealth and capital, but what form they should take,” she wrote. “We should thank the NDP for getting this debate going in Canada and look forward to seeing what other federal political parties propose.”

The discussion about wealth taxes in Canada echoes the debate in the United States where two of the leading candidates for the Democratic presidential nomination are proposing to tax wealth.

Elizabeth Warren is pitching a two-per-cent annual tax on a household’s net worth over $50 million and three per cent over $1 billion.

And Bernie Sanders is proposing a tax that would start at one per cent on a married couple’s wealth of at least $32 million, then gradually rise in seven steps to a top tax of eight per cent on net worth over $10 billion. MORE

 

 

How a wealth tax could help Canadians


Jagmeet Singh reaches out to delegates as he leaves an NDP convention stage with Gurkiran Kaur on Feb. 17, 2018 in Ottawa. File photo by Alex Tétreault

Canada’s NDP has proposed a one per cent tax on wealth over $20 million as part of its election platform. The party doesn’t include much detail yet but estimates it could generate several billion dollars a year.

Pundits have been quick to pounce on a wealth tax as too extreme, difficult or costly. A National Post column last month asked: “What is the problem to which creating a wealth tax is a solution?”

Growing inequality is the problem.

The richest families in Canada are now more than 4,400 times wealthier than the average family, according to a study by the Canadian Centre for Policy Alternatives (CCPA).

This widening gap has gone hand-in-hand with declining social and economic mobility. The CCPA found that family dynasties are more likely to keep their money in the family than they were two decades ago thanks to light taxes and loopholes that primarily benefit the wealthy, while Statistics Canada recently reported that family income mobility has declined since the 1980s.

The idea of a wealth tax sparked more interest earlier this year after Democratic leadership contender and U.S. Sen. Elizabeth Warren proposed a two per cent tax on those with more than US$50 million in assets, with the rate rising to three per cent for fortunes over US$1 billion.

“The Ultra-Millionaire Tax” would target all assets, from closely held businesses to residences outside the country. Warren estimates it would bring in US$2.7 trillion over a decade ⁠— revenue she would use to reverse staggering inequality in the country through measures such as universal child care and free tuition at public colleges.

Rising disparity is a global problem, and it’s not just progressive politicians who are pointing out the need for increased taxes on wealth.

Both the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) — hardly left-wing organizations — have highlighted growing inequality of wealth as a problem and suggested that countries increase taxes on wealth and capital.

Some argue that wealth taxes would lead to a mass exodus of wealthy entrepreneurs, hurting Canadian investment. Yet, an OECD study found that wealth taxes led to little in the way of real declines in investment and aren’t necessarily bad for the economy. MORE

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Canadian dynasties richer than ever as wealth gap continues to widen: study
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