Canada’s controversial Trans Mountain Pipeline is no longer profitable, according to a parliamentary budget control body, as the expansion project on the west coast of the country has faced years of delays, skyrocketing costs and opposition from communities. premises.
In a report on Wednesday, the Office of the Parliamentary Budget Officer said the Canadian government’s 2018 decision “to acquire, expand, operate and ultimately divest Trans Mountain’s assets will result in a net loss.” for the federal government. “
“Trans Mountain is no longer a profitable business,” he said.
The report also estimated the costs Canada could incur if construction were halted and Trans Mountain’s expansion was canceled indefinitely, saying Ottawa could be forced to cancel $ 11.1 billion ($ 14.4 billion). Canadian dollars) in assets.
The Trans Mountain expansion project has been problematic from the start, as environmentalists and indigenous communities along the pipeline route alarmed the harmful effects they said it would have on the environment and its way of life.
Despite legal challenges trying to stop the plan from moving forward, Prime Minister Justin Trudeau defended the project, insisting it will create jobs and generate funds that can be used to help Canada make the transition to greener energy. .
The Trudeau government announced in 2018 that it was acquiring the expansion of its then-owner Kinder Morgan for $ 3.5 billion (C $ 4.5 billion). The project was approved in 2019 and construction continues.
Deputy Prime Minister Chrystia Freeland’s spokeswoman Adrienne Vaupshas told AFP on Wednesday that the project was “of national interest and would make Canada and the Canadian economy more sovereign and resilient.”
He cited independent analysis by BMO Capital Markets and TD Securities that concluded that the project remains commercially viable at higher costs.
Vaupshas added that the sale of the pipeline will only take place after further consultations with indigenous groups and the associated risks are reduced.
The expansion would nearly triple the capacity of the pipeline, which has been in operation since the early 1950s, to allow it to send up to 890,000 barrels of oil a day from Alberta’s tar sands to the coast of Alberta. British Columbia for overseas export.
Trans Mountain Corp (TMC) said in February that it expected to complete the work by the end of 2023. It also said the cost had risen to $ 16.5 billion (C $ 21.4 billion), more than $ 9.75 billion. 12.6 billion Canadian dollars).
Environmentalists say Trans Mountain pipeline expansion will lead to “disastrous climate impacts” [File: Candace Elliott/Reuters]
“The progress we have made over the last two years is remarkable given the unforeseen challenges we have faced, such as the global pandemic, forest fires and floods,” said Ian Anderson, President and CEO of TMC. in a statement on February 18.
At the same time, the federal government said it would not spend additional public funds on the expansion. “Instead, TMC will provide the necessary funding to complete the project with third-party financing, either in the public debt markets or with financial institutions,” he said.
“There will be no benefits”
But environmentalists and other stakeholders said the rising costs were another reason why the Canadian government canceled the expansion altogether.
“Trans Mountain never made sense to build during a climate crisis,” Emma Jackson, Canada’s senior organizer for environmental group 350.org, said in a statement in February.
“This is the time to cancel this project outright and put all our energy and political will into a fair transition that leaves fossil fuels on the ground and supports people, communities and workers.”
On Wednesday, Julia Levin, national climate program manager at Environmental Defense, echoed this, saying the project would cause “disastrous environmental and climate impacts” and harm Canadians.
“There will be no gains, only financial losses for Canadians and more carbon emissions for the planet,” Levin said in a statement.
“As project costs continue to rise, the government should reduce its losses and cancel the construction of the expansion pipeline, before even more of our dollars are wasted; public dollars that could be invested in development. of sustainable energy systems “.