(Ottawa) Finance Minister Chrystia Freeland is categorical: Ottawa will recover all of the $34 billion that was invested in the construction of the Trans Mountain pipeline when it was sold to the private sector.
Posted at 3:02 p.m.
Minister Freeland thus sought to convince opposition parties skeptical about the chances of taxpayers reviewing the color of public money invested in this controversial pipeline.
Testifying before the House of Commons Natural Resources Committee, Mr.me Freeland suggested that the federal government could pocket an amount in excess of $34 billion when it disposes of this new infrastructure which came into operation on 1is May.
The Minister of Finance, however, did not give a timetable for the privatization of the pipeline, but she also reaffirmed Prime Minister Justin Trudeau’s position that this project was in the national interest.
PHOTO SEAN KILPATRICK, THE CANADIAN PRESS
Finance Minister Chrystia Freeland
“We’re going to get our money back because we don’t intend to be the owner of the pipeline in the long term. If you look at the analyzes of its value right now, the consensus is that this project is worth a lot of money,” Minister Freeland said in response to a question from NDP MP Charlie Angus.
“Yes, the $34 billion,” she argued.
And I hope we will sell it at an even higher cost. The way we’re going to get our money back is to sell it.
Chrystia Freeland, Federal Minister of Finance
Bloc MP Mario Simard also said he was skeptical that the federal government would be able to recover the stake.
To counter criticism from the Conservative Party, Minister Freeland noted that the Trans Mountain expansion work created 35,000 jobs and gave a boost to the economy.
The Trans Mountain pipeline expansion improves the profitability of Canadian oil companies and also benefits the country’s economy in general.
In a study, the Bank of Canada estimated that the growth of Canada’s total exports will increase by 6.25% on average during the second half of 2024, thanks in particular to the Trans Mountain pipeline.
TD Bank estimates, for its part, that the increase in oil production this year will add between 0.2 and 0.4 percentage points to Canada’s total gross domestic product (GDP).
Since the opening of the new pipeline, Canadian oil exports to the United States have reached a record according to the US Energy Information Administration (EIA). For example, the United States imported 4.3 million barrels of Canadian oil per day in July.
The Trudeau government was forced to buy this pipeline from Kinder Morgan in 2018 for the sum of $4.5 billion in order to carry out the expansion project that the American company had abandoned due to the numerous legal obstacles it faced. was confronted.
This project tripled the pipeline’s transport capacity, from 300,000 barrels per day to around 900,000 barrels. The pipeline transports crude oil from Alberta to the coast of British Columbia. Ottawa also wanted to allow Alberta to obtain a better price on foreign markets for the oil that the province produces.
To this day, this decision remains heavily criticized by environmental groups, who consider this project incompatible with the Trudeau government’s objective of reducing greenhouse gas emissions and achieving carbon neutrality by 2050.
Initially, work to expand the pipeline that connects Edmonton, Alberta, to Burnaby, British Columbia, was estimated at $7.4 billion. The bill jumped to 21.4 billion in 2022 before being revised upwards to reach 34 billion dollars.
According to a report from the Parliamentary Budget Officer released in 2022, the federal government will be forced to sell the Trans Mountain pipeline at a loss due to exploding construction costs. In 2021, a team of researchers from Simon Fraser University in British Columbia estimated that losses for taxpayers could approach $18 billion.
