The projected cost to complete the controversial Trans Mountain pipeline expansion has skyrocketed to C$12.6 billion, driving the total price tag above $16 billion when the expense of buying the project on taxpayers’ behalf is taken into account.
Finance Minister Bill Morneau still “maintains the project remains financially viable and will end up in the hands of the private sector,” the Globe and Mail reports.
The new cost estimate, revealed in a budget released Friday by the federally-owned Trans Mountain Corporation, represents a 70% increase over an earlier construction estimate of $7.4 billion, the Globe writes. The company said it expects the pipeline to begin operations by December 2022.
“I think what’s clear, from what the company told us today, is that the project continues to be a strong project,” Morneau said, noting that Trans Mountain has contracts in place for about 80% of the expanded pipeline’s capacity. “We went through a due diligence process to consider how this would be commercially viable. This was in the range of considerations that we looked at.”
Trans Mountain CEO Ian Anderson, the former Kinder Morgan Canada president who came over to lead the federal Crown corporation, said the new budget includes a $500-million contingency fund to cover additional delays and cost overruns. He blamed the cost increase on a “domino effect” from construction delays, along with higher prices for materials and other changes to the project over the last three years, the Globe says.
“Delays are money,” Anderson said. “We’ve had to manage those delays as we’ve gone through the last several years. And I think right now, we’ve got the clarity to put a pin in the schedule.”
While Conservative natural resources critic Shannon Stubbs said the price increase reflected the government’s mismanagement of the project, anti-pipeline campaigners at Stand.earth note the total cost to taxpayers is already well above $12.6 billion, after factoring in the $4.5 billion the Trudeau government so magnanimously spent on all our behalf to buy the pipeline.
“That cost is now higher than Canada’s federal deficit,” which stood at $14 billion late last year, said Climate and Energy Campaigner Sven Biggs. “Instead of choosing to balance the budget, our federal government is incurring new debts to build this risky pipeline.”
Stand adds that the new budget represents a 133% increase from the $5.4 billion estimate that Kinder Morgan first unveiled in 2014. The cost projection hit $7.4 billion in 2017 and $9.6 billion in 2018, en route to $12.6 billion today.
$ 12.6 billion divided equally amongst Canada’s estimated population of 37.6 million people equals $335 per capita — or $1340 for a family of four.
Those tax revenues sure would pay for a whole whack of health care or education infrastructure or climate-friendly initiatives.