Three Gorges Probe

March 26, 1996

$12.5 million Export Development Corporation loan to Chinese government makes Canadian Taxpayers financiers of world’s "riskiest and most destructive dam project ever"

More than 60 environmental and development groups from around the world have sent Prime Minister Jean Chretien a letter protesting Canadian government financing for the Three Gorges dam and demanding that the government launch a parliamentary investigation into Canada’s involvement in this massive dam on China’s Yangtze River.

Signatories to the letter, including David Suzuki and the Grand Chief of the James Bay Crees, Matthew Coon Come, called Canadian involvement in the project a "black mark" on Canada’s international reputation.

The Export Development Corporation, which provides financing and insurance to help Canadian companies win contracts abroad, recently agreed to lend $12.5 million to the Chinese government to purchase a $35 million computer system from Ontario-based Monenco-AGRA.

The computer system, similar to one Monenco-AGRA built for the Hibernia offshore oil project near Newfoundland, includes voice-data networks and computers that will help Chinese authorities forcibly relocate more than one million people.

Canada is the lone supporter of the megadam, which will flood more than 100 cities and towns, inundate thousands of hectares of the best farmland in China, cause irreparable environmental damage to the Yangtze River valley, and require the world’s largest forced resettlement operation. Dam builders worldwide, including the U.S. Bureau of Reclamation, engineering giant Bechtel Enterprises, and Canadian utilities like B.C. Hydro and Ontario Hydro, have all refused to get involved in the contentious project. Even the World Bank, a well-known financier of large dam schemes, has warned that the current design of the project is not economically viable.

"Canadian involvement in this massive scheme will make Canadian taxpayers unwitting bankers for what will probably be the riskiest and most destructive dam project ever built," said John Thibodeau, director of research at Probe International.

In a stunning policy flip-flop in 1994, the Liberals reversed their earlier stand against the dam. While in opposition in 1989, the Liberals demanded that no federal funds or loan guarantees be earmarked for the controversial project. In a letter to the Conservative government, Liberal MP Christine Stewart, now Canada’s Secretary of State for Latin America and Africa, sought assurances "that taxpayers’ money will not be made available to Canadian businesses or used in any way to support the Three Gorges Dam project through EDC concessional funding or loan guarantees or through any other Government department."

According to Probe International, which has been monitoring the project for more than a decade, Canadians have never had the opportunity to challenge the EDC’s assumptions in favour of the dam. "The Three Gorges is not just a dam, it’s an unprecedented experiment in social engineering and the biggest economic white elephant of our time," said Mr. Thibodeau.

The American equivalent of Canada’s EDC, the United States Export-Import Bank, is conducting a full review of the economic and environmental effects of the project. Ex-Im has met with environmental groups and business lobbies and is expected to make a decision on whether or not to finance American firms seeking Three Gorges contracts shortly.