Estimated cost for North Shore Wastewater Treatment Plant balloons to almost $4B

Construction on the long-awaited North Shore Wastewater Treatment Plant will soon begin again, according to Metro Vancouver, but it now comes with a much more expensive price tag of $3.86 billion.

When construction began on the facility in 2018, the project was estimated to cost $700 million and was expected to be operational by December 2020.

However, the project hit major roadblocks when Metro Vancouver terminated its contract with the company responsible for designing and building the new treatment plant.

Metro Vancouver board of directors chair George V. Harvie said in a release that building has to go ahead.

"Building a new wastewater treatment plant that provides a higher level of treatment is essential to comply with federal regulations and it is absolutely critical that the facility is built to ensure human health and the environment are protected well into the future," he said.

Once operational, the treatment plant will serve more than 300,000 residents and businesses on the North Shore and will provide filtration and disinfection. Metro Vancouver said "tertiary filtration will reduce the release of potentially harmful contaminants into sensitive marine environments."

Roadblocks to the project

Back in 2021, Metro Vancouver severed ties with Acciona Wastewater Solutions over long construction delays and a rising price tag.

In April 2022, the company sued Metro Vancouver for $250 million in damages and unpaid bills alleging the regional government wrongfully and unnecessarily cancelled construction contracts mid-project, and that it was not responsible for most of the modifications made to the original project, nor the resulting delays and cost increases.

It resulted in Metro Vancouver filing a notice of application in the Supreme Court of British Columbia against Acciona, demanding it provide more information about how it came into possession of the regional government's confidential legal advice outlining the case for terminating the contract, as well as a $500 million countersuit.

West Vancouver Mayor Mark Sager calls the ongoing litigations "a colossal headache."

"[It] will take time to resolve — 1,500 deficiencies were found in the project. I've physically ... been shown the deficiencies. Mind blowing," Sager told CBC News.

$725 more to taxpayers

Metro Vancouver then created a task force to explore how to move forward with the project, adding that Acciona only completed 30 per cent of the construction and 80 per cent of the project's design. Harvie said Metro Vancouver now has a viable path to complete it.

However, Metro Vancouver commissioner and CAO Jerry Dobrovolny said the cost to deliver the treatment plant has grown.

"In updating the cost estimate, Metro Vancouver took into consideration the many large infrastructure projects in the market today, which are all competing for resources; the cumulative effect of inflation of construction and labour costs; and the significant work that was needed to address design and construction deficiencies," he said.

Metro Vancouver says the new facility will treat wastewater from West Vancouver, the City of North Vancouver, the District of North Vancouver and the Squamish and Tsleil-Waututh Nations. (Submitted by Metro Vancouver)

With the new $3.86-billion cost, Metro Vancouver said households within the North Shore sewerage area will be on the hook for an average increase of $725 for 30 years. The average cost does not compound over the 30-year period.

Meanwhile, Metro Vancouver said some project costs will be shared across the region, which are estimated at:

• An average increase of $140 for households in the Vancouver Sewerage Area.

• An average increase of $80 for households in the Fraser Sewerage Area.

• An average increase of $70 for households in the Lulu Island West Sewerage Area.

Metro Vancouver said it varies by municipality whether the costs of wastewater treatment, drinking water and solid waste management are included in utility rates, property taxes or a combination of both.

The rate per household also depends on the type of home and usage.

Lyle Craver, who has been living on the North Shore in the Lynn Valley area for more than 30 years, says taxpayers always have to bear the brunt of the government's failure to deliver.

"When things go sideways ... as always, it's you and me that pays the bill," he said during a Zoom interview with CBC News.

"In the case of homeowners, well, it just keeps going up year after year. And incidentally in 2024, North Vancouver district where I live has seen the biggest tax increases of the previous 20 years."

A photo taken in the winter of 2021 shows construction underway at the North Shore Wastewater Treatment Plant. (Submitted by Acciona)

The revelation of the increased costs has also not landed well with officials on the North Shore.

District of North Vancouver Mayor Mike Little said in a statement he is extremely frustrated by the project.

"I am bothered about the additional costs that the district taxpayers will be forced to absorb to get the North Shore Wastewater Treatment Plant completed and operational," he said.

City of North Vancouver Mayor Linda Buchanan sits on the board of directors for Metro Vancouver. She said as a member she has to accept the decision of the board, but she also has concerns about the impact the increased costs will have on residents.

"People deserve to have updated infrastructure that is affordable and paid for equitably," she said.

Dobrovolny said he understands the financial concerns and Metro Vancouver is working on a long-term financial plan to illustrate to the provincial and federal governments the need for financial support.

Metro Vancouver said it will confirm a contract to complete construction over the coming months. It also said the treatment plant is now expected to be "substantially complete" in 2030 — a decade behind original projections.

Calls for transparency and accountability

District of North Vancouver Coun. Catherine Pope says there has been a serious lack of transparency and accountability surrounding the project.

"I am calling on the provincial government to have a forensic audit," she told CBC News.

"The audit needs to uncover exactly what went wrong, and it needs to be able to reassure the public through its investigations that Metro Vancouver is capable of carrying this project forward successfully."

Canadian Taxpayer Federation's Carson Binda echoes Pope's sentiments, calling for better provincial oversight of major projects like this one that involve taxpayer dollars.

"It's unacceptable for these things are happening behind closed doors when billions of taxpayer dollars are on the hook," he told CBC News. "It just underscores the need for a local government auditor general."

Binda says the lengthy legal dispute between Metro Vancouver and Acciona will likely create more costs too.

"Taxpayers are being left to pick a big chunk of those legal fees and bills from those lawsuits," he added.