Trudeau government subsidizes Trans Mountain pipeline to the tune of $10 billion
May 11, 2022
In spite of promising to no longer use public funds towards the pipeline project, Ottawa is walking back on its commitment.
Unceded Coast Salish Territories (VANCOUVER, BC) — In spite of federal government claims that it would no longer funnel public funds into the Trans Mountain pipeline, Justin Trudeau’s government is walking back on its word by approving a $10B loan guarantee for the project.
A news report broke today, revealing that cabinet ministers approved this special loan guarantee on April 29 in order “to entice investment in the government-owned Trans Mountain pipeline expansion project.” The loan is being administered under the Canada Account at Export Development Canada, a federal Crown corporation. According to the World Trade Organization, loan guarantees are considered to be subsidies.
“Once again Justin Trudeau and Chrystia Freeland have lied to Canadians about the Trans Mountain pipeline, and once again it will cost Canadian taxpayers billions of dollars of public funding,” said Sven Biggs, Canadian Oil and Gas Program Director for Stand.earth. “This is just more evidence that this pipeline is not viable, and that is way past time that the Liberal government allowed this project to be cancelled.”
The pipeline project is currently less than halfway built, years behind schedule, and now needs to find at least $8 billion in funding from private investors to cover growing construction costs that now top $21 billion. Analysis by the Parliamentary Budget Office and Institute for Energy Economics and Financial Analysis (IEEFA) have previously called into question whether the pipeline is viable at this construction price, and predicted that taxpayers will have to continue to pour money into the project if it is to be completed.
This past February, Trans Mountain Corporation announced that the projected cost of building the Trans Mountain Pipeline would increase from $12.6 to $21.4 billion, the second time projected construction costs have increased exponentially in just the last two years. The mechanical completion date for the pipeline was also pushed back from late 2022 to late 2023, meaning that the project is now delayed by four years. The projected cost of building the Trans Mountain Expansion has steadily increased since 2014, when Kinder Morgan first unveiled the project with an estimated cost of $5.4 billion. In 2017, they revised that number upwards to $7.4 billion, before revising it again a year later to $9.6 billion in regulatory filings related to the sale of the pipeline to the Canadian Government. Then in February of 2020 Trans Mountain CEO Ian Anderson announced the estimated cost had risen again to $12.6 billion.
“In a world that is already reeling from forest fires, floods and the other very real impacts of climate change Canada needs leadership that is fully committed to taking on the greatest challenge we have ever faced,” said Biggs. “We are long past the time where governments can be talking about fighting climate change in one breath, and approving new oil extraction projects or propping up a failing pipeline in the next.”
In addition to the ballooning costs of this pipeline project, this loan approval comes on the heels of the IPCC’s latest report where the UN Secretary General called any investment in new fossil fuels infrastructure “moral and economic madness.” If Canada moves forward with projects like Trans Mountain, or the recently approved Bay du Nord project, the country is well on a path of further entrenching its dependence on fossil fuels while accelerating the climate crisis. Stand.earth is calling on the federal government to cancel this project in order to truly get taxpayers off the hook for future losses.
Ziona Eyob, Media Director – Canada, email@example.com, +1 604 757 7279 (Pacific Time)