In March 2023, I wrote “Trans Mountain: A $35+ billion fossil fuel subsidy.” Turns out I was wrong. The number is even higher. To the initial sum awarded Kinder Morgan, add $34 billion of interim construction costs, then prepare to add more as work continues and accountants scurry around to calculate the final cost.
Canada paid $4.5 billion in 2018 to buy the 65-year-old Trans Mountain pipeline. The federal government promised to complete the pipeline expansion project (TMX) that private sector financiers refused to fund. When first promoted, the TMX cost was said to be $5.4 billion. After escalations, during a Friday news dump in March 2023, the federal crown corporation behind TMX revised the budget to $30.9 billion. That seemed astonishing, but it was still too low.
In October 2023, Reuters was reporting the project cost as “roughly C$35 billion.” Trans Mountain Corp. admitted in early 2024 that its budget had been revised again. This time to $34 billion. However, the crown corporation said it won’t know the final cost until three months after its completion. That’s likely to be in late summer 2024.
Bent Flyvbjerg of Oxford University is the world’s most cited scholar of megaproject management and mismanagement. One of his studies included this:
Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.
Laypeople can see evidence of “strategic misrepresentation” in the chart above. Even one year after the federal government began construction of the pipeline, its budget was reported as $7.4 billion. As the project moved ahead, so did the budget.
The practice is to use low numbers to gain approval and hide real figures until the project is substantially complete. This discourages people from saying STOP!
In this case, expect the total cost to be around $36 billion. That is almost 5x what taxpayers were told when the commitment to complete TMX was made.
If I said to my spouse that Intended to buy a car for $30,000, then I returned with one priced at $150,000, she would bar me from the house. The same should happen to every person — whether bureaucrat or politician— who said taxpayers ought to build an oil pipeline. Bar them from ever spending public dollars again.
Categories: oil and gas
in-sights.ca 
$40 BILLION????? OMG, that is a lot of change and a lot of interest if this bill has been “charged”. Yikes, $40 BILLION. Could have been used to improve housing for Indigenous People, better health care and better education closer to home. Would have built a number of hospitals. Could have provided a number of facilities to help people with their mental health and addictions. The list goes on. Was never keen on the pipeline because it will cause more oil tankers and more oil tankers means more chances of spills.
Oh, well easy come, easy go. With lines growing at food banks, $40 billion for a pipeline which benefits oil companies only and Alberta the government could have handed out a lot of grants to food banks.
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any gains now will go to debt interest?
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It’s customary for politicians to fight over who gets to attend the ribbon-cutting ceremony and be front and center at the photo opportunity when any of these multi-billion dollar projects open for business.
In this case I wonder at which end of the pipeline the ceremony will be staged and who will win the fight not to attend.
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The crazy thing is the hatred for Trudeau and his Liberals spewing from Alberta, after oil producers were gifted this project.
Imagine kids hanging “F You, Santa Claus” banners off highway overpasses, after an especially lucrative Christmas.
Here’s hoping the pipeline transit fee will be a mere 2 cents per barrel lower than railway rates. 🙂
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“Beyond approving the project, Trudeau also committed to directing every single dollar the federal government earns from the pipeline — which, when it’s built, is estimated to be some $500 million a year in federal corporate tax revenue alone — to investments in unspecified clean energy projects.”
https://www.cbc.ca/news/politics/tasker-trans-mountain-trudeau-cabinet-decision-1.5180269
Hmmm. The math regarding how much and when the federal government “earns” from this pipeline should be interesting. Mind you, Trudeau’s commitment on this was around 29,382 unkept promises ago, so likely worth little in any case.
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They are searching for a buyer but they will be lucky to net 20% of the capital costs. Despite what Trudeau said a few years ago, there will be zero public profits.
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You can fool the public some of the time but you cant fool the public all of the time!
Well , not unless they are so ideological they are blind .
To be fair to the politicians that make these illogical taxpayer dollar draining decisions they too are fooled by , in their case, lobbyists, and well meaning ill educated or inexperienced confidants!
At the end of the day , insanity is doing the same again , expecting a different result..
Sad to say the billion dollar governmental boondoggles would seem to favour big business not the common folk.
At such times the boondoggle does favour the common folk the media reacts with a vengence.
TB
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