The Canadian government has recently announced new loan guarantees, amounting to up to Can$3 billion ($2.25 billion), to finance the Trans Mountain pipeline project. The project has been surrounded by controversies and concerns regarding its escalating costs.
The Trans Mountain pipeline, running from Alberta province to the Pacific coast, was nationalized by the government in 2018. The loan guarantees were agreed upon in late July and were made public on the Export Development Canada (EDC) website last week. This marks the third time this year that the EDC has announced new loan guarantees for the project.
Originally estimated at Can$7.4 billion in 2017, the cost of the pipeline has surged to Can$30.9 billion as of March this year. In an attempt to manage the escalating costs, the federal government announced a loan guarantee worth Can$10 billion last year. However, the parliamentary budget officer warned that the project had become a “net loss” for Canada, with construction costs expected to surpass its value.
The Trans Mountain pipeline has been the subject of intense controversy since its inception. Proponents argue that it is crucial for the petroleum industry in Alberta, enabling increased transportation of petroleum from the tar sands to the Pacific coast for export to Asian markets. However, environmentalists have raised concerns about the potential environmental risks associated with the project. Indigenous communities in British Columbia have also expressed opposition, claiming that the pipeline would violate their rights by encroaching on their lands.
In 2018, Prime Minister Justin Trudeau declared the project to be of “national interest” and the government acquired it for Can$4.4 billion. This move sparked outrage among environmental groups. After facing multiple delays, construction work on the pipeline is scheduled to commence next year.
In conclusion, the Canadian government’s decision to provide new loan guarantees for the Trans Mountain pipeline highlights the ongoing challenges and controversies associated with the project. While proponents argue for its economic benefits, critics raise concerns about the environmental impact and violation of Indigenous rights.