Taxpayers 'on the hook' if Trans Mountain expansion goes wrong
BNN Bloomberg
Former Canadian energy executives aren’t convinced Prime Minister Justin Trudeau’s Liberals can stick the landing when it comes to the spiraling cost of the Trans Mountain pipeline expansion.
Former Canadian energy executives aren’t convinced Prime Minister Justin Trudeau’s Liberals can stick the landing when it comes to the spiraling cost of the Trans Mountain pipeline expansion.
The federal government announced Friday that Ottawa would not sink another red cent into the massive expansion project, which would nearly triple daily capacity to 890,000 barrels per day, and outlined plans to rope in third-parties for financing through debt markets or other avenues.
The expansion is now expected to cost $21.4 billion, up from the previous estimate of $12.6 billion, and pushes the completion date out to the third quarter of 2023. Ottawa said it would turn to third-party debt financing or other sources of funds to complete the project.
That approach didn’t sit well with Gwyn Morgan, the former chief executive officer of Encana Corp., which is now Ovintiv Inc. In an email to BNN Bloomberg, Morgan said the risk to taxpayers was too high for the Feds to proceed on their current course.
“In the commercial (real) world, no one’s going to finance a project running vastly over budget, with no firm remaining cost or start-up date,” he said.
”So the only way for the Feds to ‘not spend another penny on it’ would be to provide a full guarantee. Either way, taxpayers are on the hook.”
