Export Development Canada extended another C$3-billion loan guarantee to the financially precarious Trans Mountain pipeline expansion in July, according to a Friday, August 4 posting on the federal credit agency’s website.
Trans Mountain “had received an up to $3-billion loan guarantee between late March and early May this year and had received a $10-billion loan guarantee in 2022 from the federal government,” Reuters reports. Finance Canada didn’t respond to the news agency’s request for comment on the latest guarantee. But “in June, a finance ministry spokesperson said the loan guarantee was ‘common practice’ and did not reflect any new public spending,” Reuters writes.
In mid-March, independent analysts warned that Canadian taxpayers could end up picking up the tab for a “catastrophic boondoggle” after the cost of the project ballooned from an estimated $7.4 billion in 2017 to $30.9 billion today. The Trudeau government bought the pipeline from Houston-based Kinder Morgan Corporation in 2018.
In the last week, Trans Mountain has indicated that it plans to begin shipping oil through the new line in the first three months of 2024.
But after the Crown corporation laid out interim details of the tolls it plans to charge oil sands producers to ship their product, an analysis for səlilwətaɬ (the Tsleil-Waututh Nation) concluded the tolls would “violate the principles of ratemaking” by giving the fossil companies a 52% subsidy compared to the actual cost of operating and financing the pipeline.
That disconnect could force the Canada Energy Regulator into a choice between undermining its own core mandate as a regulator or increasing the cost of shipping oil sands crude out of Alberta by about $11 per barrel, enough to shift fossils’ competitiveness in world markets, West Coast Environmental Law staff lawyer Eugene Kung told The Energy Mix last month.