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Federal government hiding true cost of Trans Mountain Pipeline

Tuesday, December 10, 2019

Groups launch petition demanding full disclosure by Prime Minister Justin Trudeau

UNCEDED COAST SALISH TERRITORY (VANCOUVER, BC) — A growing number of voices — including First Nations, economists, and environmental organizations — are demanding the federal government release its updated cost for building the Trans Mountain pipeline (TMX). The federal government has not provided information to Canadians — who, as taxpayers, are on the hook for the multi-billion amount — for almost two years, despite construction delays. 

“We’re urging all federal parties to demand more official discussion around the financial reality of the Trans Mountain pipeline, because upward of nine billion dollars — and it could be more — would go a long way to supporting oil and gas workers in Alberta and helping build a clean economy,” said Alexandra Woodsworth, Campaigns Manager at Dogwood Initiative.

Groups including Dogwood Initiative, Stand.earth, SumOfUs, and Wilderness Committee today launched a petition calling on the Prime Minister and Finance Minister to publish an updated cost for TMX. 

“The Trans Mountain pipeline is already a massive multi-billion dollar subsidy and Canadians have the right to know how much the price has increased,” said Eugene Kung, staff lawyer at West Coast Environmental Law Association. “Canadians were told this would be a profit-generating investment and the profits would be devoted to renewable energy. Instead, it’s operating at a consistent loss and it isn’t even clear the government will be able to sell it, without taking another loss of billions of taxpayer dollars.”

In 2018, the government paid Kinder Morgan $4.5 billion to buy Trans Mountain. The cost to build the new expanded pipeline has been steadily increasing over the last five years. The original cost estimate in Kinder Morgan’s application was $5.4 billion. In 2015, the cost increased to $6.8 billion; in 2017 it increased to $7.4 billion; and in 2018 it was $9.3 billion — an overall increase of 72 per cent. (See the PBO report from January 2019.)

The latest report from the Canada Development Investment Corporation (CDEV) shows financing has not been secured to pay for the pipeline’s construction. The Parliamentary Budget Officer (PBO) also said that one year’s delay would reduce the value of the pipeline by $693 million, assuming the same construction cost. Similarly, a 10 per cent increase in construction costs would lower its value by $453 million. Other costs include, but are not limited to, increased accommodation costs with First Nations and land acquisition costs, with some agreements still not final.

Trans Mountain Crown Corporation CEO Ian Anderson said earlier this year that once construction of the Trans Mountain pipeline started, the company would publicly release updated construction costs. According to the federal government, as of mid summer, construction was well underway, but no updated costs have been forthcoming.

The Federal government has repeatedly said the pipeline will be built by the middle of 2022, though Trans Mountain Corp. said at the end of November it would take “three full years” to build Westridge Terminal in Burnaby, bringing the planned in-service date closer to 2023.

“With TMX what we have ended up with is a complete lack of transparency around what has become Canada’s largest fossil fuel subsidy,” said Kukpi7 (Chief) Judy Wilson of the Union of BC Indian Chiefs. “We need a complete accounting so we can have a full discussion around the billions of public dollars spent on oil infrastructure during a time when indigenous communities lack safe drinking water and critical work on reduction of carbon emissions is needed for a climate safe future.”

 

PRESS CONFERENCE

Groups held a press conference beginning at 10 a.m. PST / 1 p.m. EST on Tuesday, December 10, in Vancouver, BC. To view the livestreamed press conference, please visit https://www.facebook.com/standearth/videos/1502581526547337/

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Media contacts:

Alexandra Woodworth, Campaigns Manager, Dogwood Initiative, (604) 245-7967
Eugene Kung, Lawyer, West Coast Environmental Law Association, (604) 601-2514
Kukpi7 (Chief) Judy Wilson, Secretary-Treasurer, UBCIC, (250) 320-7738

For French interviews: Kai Nagata, Communications Director, Dogwood Initiative, kai@dogwoodbc.ca, (778) 829-6493