The Canadian hydropower industry consists of monopolies owned by the individual provinces and backed by the federal government with a range of direct and indirect subsidies in many forms. These include:
- Provincial government officials lobbying in the U.S. get corridors and export contract approved;
- Provincial governments marketing hydropower projects in the U.S.;
- Lax environmental oversight;
- Virtually no corporate governance — the province and the hydropower monopolies are one and the same – this would never pass muster in the U.S.;
- No federal government permitting reviews once the dams are built: they are free to run forever, whereas in the U.S. hydropower dams must undergo relicensing by FERC every forty years, and public input is provided;
- No mechanism for the public to enforce environmental or performance standards when hydropower operations violate permitting conditions; and
- Federal government guarantees debt of its hydropower monopolies many of which have horrible credit ratings otherwise.
The comments to the ITC from the public interest group Commons BC provides a glaring example of how the Canadian government exempts megadam hydropower projects from regulatory review on a whim. The Muskrat Falls Commission of Inquiry documents the complete failure of the regulatory and oversight process. When the Manitoba Hydro board resigned over the decision to build the massive Keeyask dam, the Premier simply appointed a new board that agreed with him. Dams are built with disregard for Environment Canada’s own designations of biological hot spots. For example, B.C. Hydro is building the Site C dam in an area with “a high diversity of locally endemic species, which are species that are not found or are rarely found outside the hotspot.”
In the ITC hearings, Hydro-Quebec’s President and CEO attempted to claim Hydro-Quebec “stand alone” entity unsupported by the Quebec Government. This is entirely false, as the Sierra Club wrote in its August 7, 2020, Post Hearing brief,:
“Finally, the statements from the Hydro-Quebec representative under oath during the hearing along the lines of “Hydro-Quebec receives no support from the Quebec government” are unequivocally false. Approximately 95% of the debt of Hydro-Quebec is unconditionally guaranteed by the Quebec government.14 As this Commission assuredly understands, such guarantees can improve credit ratings and lower the cost of capital of the receiving entity. That is hardly inconsequential support when it comes to financial competition against entities without such guarantees. We encourage this Commission to consider all of the claims about supposed benefits of Canadian hydropower in the light of such misrepresentations under oath. As stated during the hearing, Hydro-Quebec has made numerous fallacious and misleading claims about the impacts of its operations and contracts, particularly when it comes to advocacy for potential imports to the United States. Just last week 25 current and former Maine state legislators expressed deep concern about the practices of the company regarding deceptive claims in the context of the upcoming election.”Sierra Club Post-Hearing Brief, August 14, 2020
The lack of transparency and accountability of the Canadian hydropower industry blatantly violates the Canada-US trade agreement, CUSMA, Article 4 which requires to “maintain or establish regulatory authorities that are separate from, and not accountable to, persons subject to energy regulatory measures.”
When US politicians and regulators review contracts to import Canadian hydropower, they have never considered environmental or human rights impacts or whether the contracts comply with trade agreements. Thus, Canadian hydroelectricity escapes scrutiny on both sides of the border.