After initially being valued at $7.4 billion, the bill for the Trans Mountain pipeline expansion project has now reached $21.4 billion, according to an update released Friday. The entire bill will be borne by the Government of Canada, which owns this infrastructure dedicated to the export of oil from the oil sands.
At the time of the Trudeau government’s takeover of the existing Trans Mountain pipeline and expansion project, Ottawa estimated the total costs at $7.4 billion. An invoice which was added to the 4.5 billion dollars paid in 2018 to the Texas oil company Kinder Morgan, to buy back the infrastructure. “This is an investment in Canada’s future,” Finance Minister Bill Morneau said at the time.
The costs of the expansion project, which is the construction of a new pipeline and a larger marine terminal on the west coast, were later revised upwards, to $12.6 billion in 2020.
As part of a new cost “update”, released on Friday, the bill jumped again to $21.4 billion. This is a $14 billion increase from the valuation presented by the Trudeau government in 2018, at the time of the takeover. Taking into account the construction costs and the costs for the buyout of the pipeline built in the 1950s, this equates to a bill of $680 per Canadian citizen.
In a press release, Trans Mountain Corporation indicated that this increase results in particular from “improvements” and “modifications” to the project, but also from “delays”, the impacts of COVID-19 and the repercussions of the floods of November 2021 in British Columbia. “The progress of the past two years is remarkable considering the unforeseen challenges we have faced including the global pandemic, wildfires and flooding,” said Ian Anderson, President and CEO of Trans Mountain Corporation. .
Despite this 290% increase in the bill since 2018, “the profitability analysis of the project remains solid”, can we read in the press release published on Friday. “Canada will benefit from the economic and fiscal contributions made by the project after it comes into operation. According to what the federal government plans, any profits will be used to finance projects related to the fight against the climate crisis.
Losses in sight?
According to a study published in the spring of 2021 (before this Friday’s update) by a team of researchers at Simon Fraser University in British Columbia, Canadians risked losing more than $12 billion from the expansion of the Trans Mountain pipeline. According to the different scenarios assessed, the losses could vary from 3.2 billion to more than 18.5 billion. Whatever the scenario, none has demonstrated that the project could generate a benefit for the government.
For Greenpeace, Trans Mountain boils down to a waste of public funds. “This project was crazy from a climate point of view when it was supposed to cost 7.4 billion dollars. But at over $21 billion, it’s official that it’s also insane from an economic point of view. There are countless ways to spend public money better. It is time to reduce our losses and stop this project which is a real white elephant, ”said its spokesperson, Patrick Bonin, on Friday.
The pipeline duo, when completed by “the end of 2023”, will transport 325 million barrels of oil sands oil each year from Alberta to a port near Vancouver. The expansion project will therefore triple the flow of oil and increase the number of tankers loaded in the Vancouver area sevenfold, from 5 to 34 ships per month.
More details to come.