BC Hydro’s planned $7.9-billion Site C dam on the Peace River passed two governmental hurdles Tuesday, meaning construction could begin in January.

The federal government announced that the 1,100-megawatt dam should proceed, with conditions, despite the likelihood of “significant adverse environmental effects.”

The fate of the controversial megaproject now rests with the province, which has supported the dam from the start. A cabinet decision is expected within weeks.

In announcing Ottawa’s decision, Environment Minister Leona Aglukkaq said that environmental damages “are justified in the circumstances” due to the considerable economic impact in northeast B.C.

Noting BC Hydro must fulfil more than 80 “legally binding conditions” throughout the life of the project, Aglukkaq said Site C will provide a source of “clean, renewable energy over the next 100 years” and will create about 10,000 direct person-years of employment through 2024.

“The Site C project … underwent a thorough independent federal-provincial review by an independent panel,” she added in a press release. “The environmental assessment process provided the scientific and technical expertise and the effective engagement of the public and aboriginal groups to enable an informed decision by both governments.”

Mary Polak, the B.C. environment minister, and Steve Thomson, minister of forests, lands and natural resource operations, also announced Tuesday that they had issued an environmental assessment certificate to BC Hydro, with 77 conditions. They include a $20-million compensation fund for lost agricultural lands and activities, the development of an aboriginal business participation plan, and protocols to reduce harm to wildlife and its habitat.

BC Hydro spokesman Dave Conway said the Crown corporation is pleased with Tuesday’s government decisions. He said the federal and provincial conditions for the project appear to be similar and Hydro expects “we could meet those conditions.”

Should Hydro receive “financial investment” approval from the province this fall, as well as required federal fisheries and navigable waters authorizations, site preparation work could begin as early as January, Conway said. Construction is expected to take eight years.

Andrea Morison, coordinator of the Peace Valley Environment Association, said she is disappointed by the federal government decision, but said that pressure would now ramp up on the provincial cabinet to reject the project.

“We don’t see it as a fait accompli,” she said. “This project is not in the interest of British Columbians. It’s not something we need.”

The joint review panel described Site C in May as the best and cheapest alternative for new energy in the province, but said the Crown corporation had not proven that the project should proceed at this time.

The panel recommended the B.C. Utilities Commission, which ruled in 1983 that Site C was not needed, look at the issue of need. But the province has rejected that suggestion.

Morison noted that Treaty 8 First Nations in the Peace River have repeatedly warned they will resort to legal action to stop the project. “They have every intention of taking them to court on this if cabinet does decide to approve the project. We’ll be backing them up.”

Last month, First Nations told the provincial government it could have either the Site C dam or liquefied natural gas from the northeast, but not both.

Chief Roland Willson of the West Moberly First Nation said a recent decision from the Supreme Court of Canada has bolstered their say in any industrial development on that land. “If you want to push Site C, we’re not going to be in favour of any LNG projects, any of the pipeline projects up there.”

In a brief news conference Tuesday, Polak said she believed there had been adequate consultation with aboriginal groups.

Polak said the government has yet to decide to go ahead with the project.

“Government, broadly, still needs to make a decision with respect to a final investment decision,” she said.

Paul Kariya, executive director of Clean Energy BC, said independent power producers “offer a robust, cost-effective alternative” to “adding another $8 billion of public debt” for Site C.

During the panel hearings, however, BC Hydro stated: “Intermittent resources such as wind and run-of-river provide little dependable capacity.”

At 1,050 metres long and 60 metres high, the dam would flood 83 kilometres of the Peace River Valley from approximately Fort St. John to Hudson’s Hope.

Site C is downstream of the W.A.C. Bennett and Peace Canyon dams and would also flood 14 kilometres of the Halfway River, 10 kilometres of the Moberly River, eight kilometres of Cache Creek, three kilometres of Farrell Creek and one kilometre of Lynx Creek.

BC Hydro says about 5,550 hectares of land would be submerged, including the loss of about 3,800 hectares of land capable of agricultural production.