Despite vows not to put anymore more public money into the troubled Trans Mountain pipeline expansion to the West Coast, the federal government has chipped in another $2 billion in loan guarantees after the long-delayed project was delayed yet again.On literally, the day before Christmas — Friday, December 23 — Export Development Canada (EDC) quietly disclosed the loan guarantee that was signed on Nov. 30, just days before its latest request to vary the final section of the line was rejected by the Canadian Energy Regulator (CER).Trans Mountain said the decision could delay the line, which is already $20 billion over budget, another two years despite being more than 97.8% complete.The loan guarantee allows the Crown corporation to borrow more money on top of the previous $6 billion in guarantees it got last year, presumably to finally complete the project. Last year, it tapped EDC for $10 billion..Although having access to commercial loans at competitive rates is ostensibly positive for both the company and taxpayers, it also suggests that the final price tag to get it across the finish line could be higher than the $30.9 billion spent so far.It was initially supposed to cost $7.4 billion when Prime Minister Justin Trudeau’s Liberal government bought it for $4.5 billion in 2018 — ironically, to ensure its completion.That’s supposed to happen in the first quarter of next year. But Trans Mountain is warning of “catastrophic” delays for Canadian oil producers who are already facing the prospect of lower prices for their crude, even as they spend hundreds of millions of dollars more to increase production and actually begin filling it.When it is finally completed, the Trans Mountain expansion will triple capacity to Burnaby to 890,000 barrels per day and mark the first tidewater outlet for Alberta’s land locked barrels.
Despite vows not to put anymore more public money into the troubled Trans Mountain pipeline expansion to the West Coast, the federal government has chipped in another $2 billion in loan guarantees after the long-delayed project was delayed yet again.On literally, the day before Christmas — Friday, December 23 — Export Development Canada (EDC) quietly disclosed the loan guarantee that was signed on Nov. 30, just days before its latest request to vary the final section of the line was rejected by the Canadian Energy Regulator (CER).Trans Mountain said the decision could delay the line, which is already $20 billion over budget, another two years despite being more than 97.8% complete.The loan guarantee allows the Crown corporation to borrow more money on top of the previous $6 billion in guarantees it got last year, presumably to finally complete the project. Last year, it tapped EDC for $10 billion..Although having access to commercial loans at competitive rates is ostensibly positive for both the company and taxpayers, it also suggests that the final price tag to get it across the finish line could be higher than the $30.9 billion spent so far.It was initially supposed to cost $7.4 billion when Prime Minister Justin Trudeau’s Liberal government bought it for $4.5 billion in 2018 — ironically, to ensure its completion.That’s supposed to happen in the first quarter of next year. But Trans Mountain is warning of “catastrophic” delays for Canadian oil producers who are already facing the prospect of lower prices for their crude, even as they spend hundreds of millions of dollars more to increase production and actually begin filling it.When it is finally completed, the Trans Mountain expansion will triple capacity to Burnaby to 890,000 barrels per day and mark the first tidewater outlet for Alberta’s land locked barrels.
