BUDGET BLOWOUT: Feds pledge $3B for BC’s ballooning tunnel project

BC says the tunnel design has not changed, but the project budget has more than doubled before major construction is expected to begin.

Image: Government of BC

Ottawa is committing up to $3 billion to British Columbia’s Fraser River Tunnel Project after the cost of replacing the George Massey Tunnel more than doubled to $8.5 billion.

The federal money, announced under the Canada-BC Cooperative Prosperity Agreement, still does not cover the project’s $4.35-billion increase from the earlier $4.15-billion figure.

The province says the new budget reflects market conditions, inflation, project scope and the delivery schedule required for a build of this size and complexity. It also says the estimate has been validated by an “independent third party.”

But the numbers are punishing for taxpayers: the project is now about 105 percent over the previous $4.15-billion figure, while the province says the tunnel’s design remains unchanged from the 2023 concept, including its anticipated depth, ramp lengths and location.

A previous BC Liberal plan for a 10-lane bridge was estimated at $3.5 billion and expected to be complete in 2022. After John Horgan’s New Democrats took power in 2017, that project was cancelled. The current eight-lane tunnel was later priced at $4.15 billion and is now budgeted at $8.5 billion, with completion shifted to September 2031.

The procurement process has also been sent back to market.

BC had been working with Cross Fraser Partnership since September 2024 under a design and early works agreement. But the province failed to reach final commercial terms for construction of the tunnel and terminated the agreement, choosing instead to divide the remaining work into several smaller bidding packages.

The government says the revised approach will increase competition, create more opportunities for Canadian and BC-based contractors and seek better value for taxpayers.

In other words, a project previously taken to market as one large procurement in 2023 is now being broken apart and retendered after terms could not be finalized.

Requests for qualifications for the first two work packages were posted June 16. Requests for proposals are expected in early August, with successful companies to be selected by early 2027. Procurement for three more work packages is expected in 2027.

Major construction is still not expected to begin until 2027. The province says the environmental review is expected to conclude before the end of 2026.

The timeline has moved as well. The province says the original estimated completion date was December 2030. The new estimated completion timeline is September 2031.

Early construction work began in January 2026 and includes tree clearing, utility relocations and preparation for a casting basin. Temporary work is also underway on three jetties, a trestle bridge to Deas Island, access roads and retaining walls, creating approximately 200 jobs in 2026 alone, according to the province.

Image: Government of BC

The Fraser River Tunnel Project is meant to replace the aging George Massey Tunnel with a toll-free, eight-lane immersed-tube tunnel to improve safety, transit, goods movement and connections to the Port of Vancouver, border crossings and major trade corridors.

For now, it is also a case study in infrastructure mismanagement: a project with a doubled price tag, a blown timeline, an unfinished environmental review, and a procurement process being rebuilt after the province failed to reach final terms with the consortium it had been working with.

Ottawa’s $3-billion contribution will reduce BC’s share of the bill. It will not explain how a tunnel the province says has not changed in design became more than twice as expensive before major construction is expected to begin.