Most Canadians oppose the federal government writing down billions of dollars from the debt of Trans Mountain Corporation, the company building the expansion of the oil pipeline from Alberta to the West Coast in British Columbia, a new poll has shown.
A total of 68% of respondents in the survey by Nanos Research, cited by Reuters, are opposed or 'somewhat opposed' to Justin Trudeau's Liberal government potentially writing down up to $14.6 billion (C$20 billion) of the debt the corporation has incurred so far.
Moreover, six in ten Canadians believe that oil companies need to be funding the Trans Mountain pipeline expansion. Almost half of respondents also believe that the federal government is going in the wrong direction with handling the project, according to the survey commissioned by West Coast Environmental Law, which opposes oil pipelines and tanker projects in British Columbia.
The expansion project of the Trans Mountain pipeline that carries crude from Alberta's oil sands to British Columbia on the Pacific Coast will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd.
At the start of the project, fierce opposition in British Columbia forced Kinder Morgan to reconsider its commitment to expand the Trans Mountain pipeline.
So the Government of Canada reached an agreement with Kinder Morgan back in 2018 to buy the Trans Mountain Expansion Project and related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $22.6 billion (C$30.9 billion) and could continue to increase.
The government has never intended to keep its ownership of the project and plans to sell it before the 2025 election. An ongoing dispute over the proposed shipping tolls of the pipeline amid the huge construction cost overruns is also muddying the waters for potential buyers.
The hurdles suggest that the federal government of Canada may never fully recover the more than 12 billion U.S. dollars of costs to have the project up and running.
Amid a cost-of-living crisis for many Canadians, writing down much of the debt of Trans Mountain Corp would be politically risky for the current government, Nanos Research founder Nik Nanos told Reuters.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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