A scathing budget analysis and a new lawsuit alleging police harassment produced a day of bad news Wednesday for the Trans Mountain and Coastal GasLink pipelines in British Columbia.
In Ottawa, Parliamentary Budget Officer Yves Giroux reported that Trans Mountain is on track to generate a C$600-million loss, just two years after he projected the Trudeau government would be able to sell it for a $600-million profit, the Globe and Mail reports. That was after the estimated cost of completing the controversial megaproject ballooned from $7.4 billion—the price the government estimated when it set out to buy taxpayers a pipeline in 2018—to $21.4 billion today, CBC writes.
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“Based on the new developments since the previous report, specifically the increased construction costs and the delay in the in-service date, PBO finds that the government’s 2018 decision to acquire, expand, operate, and eventually divest of the Trans Mountain assets will result in a net loss for the federal government,” Giroux wrote.
On the other hand, he added, ending the project now and leaving it incomplete would require Ottawa to write off more than $14 billion in assets.
Adrienne Vaupshas, press secretary to Finance Minister Chrystia Freeland, said the pipeline is still viable.
“The Trans Mountain Expansion Project is in the national interest and will make Canada and the Canadian economy more sovereign and more resilient,” she told The Canadian Press in a statement. “The federal government intends to launch a divestment process after the project is further de-risked and after economic participation with Indigenous groups has progressed,” she added to the Globe.
Several Indigenous-led initiatives have expressed interest in the pipeline. Richard Masson, executive fellow with the University of Calgary’s School of Public Policy, had some idea of how the government might keep them at the negotiating table in spite of the latest PBO report.
“How much will the feds get for this? Well, it could be that they have to give somebody hundreds of millions of dollars to take it off their hands,” he told CP. “They’d probably do that through a loan guarantee, to help (a buyer) access cheaper financing.”
After Trans Mountain admitted to the latest cost overrun earlier this year, Freeland vowed not another penny of federal money would go into the project. It was later revealed that the federal cabinet had approved a $10-billion loan guarantee—for which taxpayers would be on the hook if the project failed—that enabled a consortium of banks to advance the funds to keep the project afloat.
Greenpeace Canada Senior Energy Strategist Keith Stewart recalled Prime Minister Justin Trudeau’s 2019 promise that “every dollar” the government earned on Trans Mountain would be invested in clean energy. “Rather than pouring billions more into a money-losing, climate-destroying pipeline that only benefits oil company bottom lines, let’s spend it directly on green energy solutions that help Canadians avoid pain at the pump while fighting climate change,” he said.
“As the costs of the project keep ballooning, the government should cut its losses and cancel construction of the expansion pipeline—before even more of our dollars are wasted,” agreed Julia Levin, national climate program manager at Environmental Defence Canada.
But the fossil lobby and its political allies still leapt to Trans Mountain’s defence.
“In a world that is running short on energy and in need of safe, secure, and responsibly produced oil and natural gas, the Trans Mountain expansion is more important now than when the project began construction,” said Lisa Baiton, the newly-appointed president and CEO of the Canadian Association of Petroleum Producers.
The PBO’s report landed just hours before members of the Gidimt’en Clan of the Wet’suwet’en Nation in B.C. opened a lawsuit related to the Coastal GasLink pipeline. In a release, they said the civil claim against the RCMP, the provincial minister of justice, the pipeline operator, and private security contractor Forsythe followed “months of targeted harassment and intimidation, through which hundreds of police and private security personnel have attempted to coerce Wet’suwet’en people into abandoning homes and village sites on unceded Wet’suwet’en territory.”
Since February, 2022, the release says, the RCMP and Forsythe “have continually harassed, followed, surveilled, and intimidated Gidimt’en clan members at their homes, including the Gidimt’en Checkpoint village site and the Tsel Kiy Kwa (Lamprey Creek) village site. In the span of a few months, individual RCMP officers have entered the Gidimt’en Checkpoint more than 700 times.”