Federal ministers will have to answer this fall for billions of taxpayer dollars poured into and propping up the Trans Mountain pipeline expansion.

NDP MP Charlie Angus joined forces with opposition MPs in the Natural Resources Committee to get federal ministers to answer their questions about the $34.2-billion project shortly after the government greenlit another loan guarantee — for a total of $19 billion — intended to ensure Trans Mountain Corp. can get financing.

Although Finance Minister Chrystia Freeland pledged not to spend any more public funds on the already over-budget pipeline, the federal government has issued these loan guarantees to convince banks to finance the project — effectively promising that if Trans Mountain can’t pay back the loan, taxpayers will foot the bill. The price tag was an estimated $7.3 billion in 2018 when the federal government purchased the pipeline from Kinder Morgan for $4.5 billion.

After years of delay and cost increases, TMX is complete. The project nearly triples Trans Mountain’s shipping capacity to 890,000 barrels per day.

Angus and opposition MPs wanted to question Freeland, Energy and Natural Resources Minister Jonathan Wilkinson, Parliamentary Budget Officer Yves Giroux and the Canada Energy Regulator before parliament’s summer break, but it was delayed so MPs could instead grill oil and gas executives about their halfhearted decarbonization work.

The TMX study will begin in mid-September when the House of Commons reconvenes. Angus hopes that won’t be too late.

“My only concern is that we know there’s going to be a serious attempt by the Liberals to cut some kind of backroom deal to create some kind of front company to take over TMX, and I really hope that doesn’t happen in the summer, because we need to know: What are Canadians going to be stuck with in terms of subsidizing this boondoggle?,” said Angus in a phone interview with Canada’s National Observer.

The federal government intends to sell TMX and offload at least partial ownership to Indigenous groups, but no details have been released thus far. Budget 2024 included a $5-billion loan guarantee program to help Indigenous groups invest in natural resource projects in a variety of sectors, including oil and gas.

The federal government made sure “money was no object” for TMX and prioritized it over promises to develop a clean energy economy and reduce emissions, said Angus. Along with the $19-billion loan guarantees, Trans Mountain has borrowed $17 billion from the federal government and interest accrues every year.

“I felt it was really super necessary to push for this study, because I think the Liberal government has lied to the Canadian people in a significant way,” said Angus. One of Justin Trudeau’s earliest election pledges — dating back to the 2015 election — was to phase out inefficient fossil fuel subsidies. Many Bloc Québécois, Green Party and NDP MPs say TMX is a massive fossil fuel subsidy because billions of public dollars have been sunk into a project that helps expand Canadian oil production.

“What we are facing is potentially the largest-ever subsidy … to the oil and gas sector,” said Eugene Kung, a staff lawyer at West Coast Environmental Law, in an interview with Canada’s National Observer.

Finance Canada did not answer Canada’s National Observer’s questions about the newest loan guarantee. Instead, the emailed statement said TMX is “an important investment in Canada’s economy.”

Kung said a public inquiry or process is needed to look into both the management of taxpayer money and how Canada’s regulatory system allowed this situation to materialize. Multiple analyses predict the federal government will have to write off most of Trans Mountain’s debt because the tolls it will collect won’t be enough to pay off TMX’s huge price tag.

The TMX study is needed to “shine a light on the impact that it’s going to have long term, for decades to come, on the greenhouse gas emissions from Canada and the continual investment in a dirty oil industry,” said Angus.

The federal government says it is serious about capping oil and gas sector emissions, but “TMX drives a stake through the heart of that promise,” said Angus. The committee would study how TMX will affect Canada’s climate targets, seek answers on how costs spun out of control and federal government plans to offload the project.

“All I can say, as a taxpayer and someone concerned about our climate, after the hottest year on record and record profits for banks like RBC … I’m speechless that our Finance Minister dithers and delays on putting in regulations that would advance climate actions by corporations and banks, but can quickly sign off on another billion dollars of taxpayer money to back an over-budget, risky, climate pollution emitting tar sands pipeline,” said Richard Brooks, climate finance director Stand.earth, in a written statement to Canada’s National Observer.

“It’s disappointing and a disgrace.”

— With files from John Woodside

By Natasha Bulowski, Local Journalism Initiative Reporter

Original Published on Jul 04, 2024 at 15:53

This item reprinted with permission from   Canada's National Observer   Ottawa, Ontario
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