The Trans Mountain 'boondoggle' may operate at a $2.7 billion loss upon sale: report
Cabinet in 2018 nationalized the Kinder Morgan line for $4.5 billion on a promise of profitability. On August 23, Prime Minister Justin Trudeau told reporters, 'The federal government is not in the business of running pipelines.'
The Trans Mountain pipeline has become a fiscal boondoggle, signalling the beginning of the end for oil and gas investment in Canada.
The Parliamentary Budget Office (PBO), in a June 23, 2022 report, Trans Mountain Pipeline Update, said profitability for the critical infrastructure is out of the question. "Trans Mountain no longer continues to be a profitable undertaking," wrote analysts.
"The government's 2018 decision to acquire, expand, operate and eventually divest the Trans Mountain assets will result in a net loss for the federal government," said the PBO.
Losses could run to $2.7 billion with rising interest rates, reported Blacklock's Reporter.
Cabinet in 2018 nationalized the Kinder Morgan line for $4.5 billion on a promise of profitability. "The Canadian approach will be to ensure we make a profit," then-finance minister Bill Morneau testified at the Commons finance committee in 2020.
His successor, Chrystia Freeland, in a May 13, 2022 submission to the Senate, said, "The project will likely allow the government to recoup its expenses." She did not elaborate.
On August 23, Prime Minister Justin Trudeau told reporters: "The federal government is not in the business of running pipelines."
Parliamentary committees have yet to examine the pipeline's financing details, reported Blacklock's Reporter. Liberal MPs on the Commons natural resources committee in 2018 rejected special hearings by a vote of 5 to 4.
"They utterly failed to be prepared for this," Conservative MP Shannon Stubbs said at the time. "I think it is galling that Liberals to a person voted against a motion to block Liberal ministers from coming to the committee to answer the question."
Trudeau assured reporters that the cabinet's goal is selling the Trans Mountain pipeline. However, he did not indicate whether the taxpayers would still earn a profit with its eventual sale.
Taxpayers are on tab $30.9 billion on the interprovincial oil pipeline from Edmonton, Alberta to Burnaby, B.C. Costs disclosed to date are incomplete and do not include funding for Indigenous groups or all financing charges.
Rebel News reached Alberta's Energy Ministry for comment but has yet to hear back as of writing.
"We purchased that pipeline to ensure it would be built and completed because that was in the national interest," said Trudeau. "I know there are a lot of groups, including Indigenous groups, very interested in running that pipeline."
He said, "It would be premature to speculate too much" on the progress of those conversations with Indigenous communities.
"Do you need to prepare taxpayers for having to take a write-down on this when you sell it?" asked a reporter. Trudeau replied, "We are confident the business case for the Trans Mountain pipeline remains solid."
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