Canada’s controversial Trans Mountain pipeline is no longer profitable, with parliamentary budget watchdogs finding that the expansion on the country’s west coast faces years of delays, soaring costs and opposition from local communities.
In a report on Wednesday, the Parliamentary Budget Officer’s office said the Canadian government’s 2018 decision “The acquisition, expansion, operation and eventual divestment of Trans Mountain assets will result in a net loss for the federal government.”
“Trans Mountain is no longer a profitable business,” it says.
The report also estimated the costs Canada could incur if construction stops and the Trans Mountain expansion is canceled indefinitely, saying Ottawa could be forced to write off $11.1 billion (C$14.4 billion) in assets.
As an environmentalist and an Aboriginal community, the Trans Mountain expansion project has struggled from the start Alerts along pipeline routes They say it has a detrimental effect on the environment and their way of life.
although legal challenge In a bid to stop the plan from moving forward, Prime Minister Justin Trudeau has defended the project, insisting it will create jobs and generate money that can be used to help Canada transition to green energy.
The Trudeau government announced in 2018 that it would buy the expansion from then-owner Kinder Morgan for $3.5 billion (C$4.5 billion).The project was officially recognized In 2019, construction continues.
Adriana Wopschass, a spokeswoman for Deputy Prime Minister Chrystia Freeland, told AFP on Wednesday that the project “is in the national interest and will make Canada and the Canadian economy more sovereign and resilient”.
She cited independent analysis by BMO Capital Markets and TD Securities, which concluded the project was still commercially viable at higher costs.
Vaupshas added that the sale of the pipeline could only take place after further consultation with indigenous groups and the associated risk reduction.
This expansion The pipeline, which has been in operation since the early 1950s, will nearly triple its capacity, enabling it to transport up to 890,000 barrels a day of oil from Alberta’s tar sands to the British Columbia coast for export overseas.
Trans Mountain Corp (TMC) said in February it expected to complete the work by the end of 2023. The company also said that costs have increased from $9.75 billion ($12.6 billion) to $16.5 billion ($21.4 billion).
“Given the unforeseen challenges we face, including the global pandemic, the progress we have made over the past two years has been remarkable, wildfireand floods,” said Ian Anderson, TMC President and CEO statement February 18.
Meanwhile, the federal government has said it will not use additional public funding for the expansion. “Instead, TMC will secure the funding needed to complete the project through public debt markets or third-party financing from financial institutions,” it said. Say.
‘There will be no profit’
But environmentalists and other stakeholders say the increased cost is another reason the Canadian government is scrapping the expansion altogether.
“Building Trans Mountain during the climate crisis has never made sense,” Emma Jackson, senior organizer of Canadian environmental group 350.org, said in a statement in February.
“Now is the time to scrap this project outright and devote all our energy and political will to a just transition that keeps fossil fuels in the ground and supports people, communities and workers.”
On Wednesday, Julia Levin, National Climate Program Manager at Environmental Defence, agreed, saying the project would have “catastrophic climate and environmental impacts” and hurt Canadians.
“There will be no profit, just economic damage to Canadians and more carbon emissions to the planet,” Levine said in a statement. statement.
“As project costs continue to balloon, governments should cut losses and cancel the construction of expanded pipelines – before we waste more money; public funds can be redirected to developing sustainable energy systems.”