The Commons Natural Resources committee suggested on Monday that the operators of the Trans Mountain Pipeline should explore the option of increasing tolls to help contain the growing losses for taxpayers on the project..In a report, MPs stated that a significant loss seemed inevitable..“The pipeline operator may be unable to charge high enough tolls to cover the costs of the Trans Mountain expansion,” said a committee report Federal Assistance to Canada’s Natural Resources Sectors..“The committee heard the pipeline’s toll structure was only designed to cover the expansion’s original cost estimate of $7.4 billion plus 20% to 25% of any additional capital cost increases.”.According to Blacklock’s Reporter, the cabinet purchased the Kinder Morgan pipeline for $4.5 billion in 2018..In 2018, the department of Finance budgeted $17.7 billion to purchase and expand the oil pipeline, extending it from Edmonton to Burnaby, BC..“The cost of completing Trans Mountain expansion has risen significantly over time,” wrote MPs. .“At the time of the purchase, the construction costs of Trans Mountain were estimated at $7.4 billion. However, in 2022, the Trans Mountain Corporation estimated the project would cost $21.4 billion.”.Current estimates for the project are as high as $30.9 billion. .According to a report from the Budget Office on June 23, 2022, net losses could reach up to $2.7 billion if interest rates continue to rise..“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,” wrote analysts..The Natural Resources committee on Monday recommended the Crown agency operating the line “review the toll structure of the Trans Mountain expansion project and propose modifications to the toll structure as necessary to reduce the risk to taxpayers.” It did not elaborate..On August 24, Prime Minister Justin Trudeau informed reporters the pipeline must be sold..“The federal government is not in the business of running pipelines,” said Trudeau..“Do you need to prepare taxpayers for having to take a write-down on this when you sell it?” asked a reporter. .“We are confident the business case for the Trans Mountain Pipeline remains solid,” replied Trudeau..The government, when it purchased Trans Mountain, told taxpayers that it would make a profit..“The Canadian approach will be to ensure we make a profit,” said then-finance minister Bill Morneau..“The project will likely allow the government to recoup its expenses,” Finance Minister Chrystia Freeland wrote in a May 13, 2022 submission to the Senate. Cabinet has not repeated the assurance.
