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Feds approve $2B loan guarantee to help TMX over finish line

January 15, 2024

Photo by Jesse Winter / Canada’s National Observer Listen to article

Canada’s National Observer: The federal government has issued yet another taxpayer-backed loan guarantee — this time for up to $2 billion — to help get the massively over-budget Trans Mountain pipeline expansion over the finish line.

TMX is about 97 per cent complete, but the final 16 kilometres are filled with construction challenges and fierce opposition from Stk’emlupsemc te Secwepemc Nation. Experts say the cracks are starting to show up on the Crown corporation’s balance sheets.

Trans Mountain recently recorded a $1-billion loss in its third-quarter financial statement. It says the reason is that interest rates on its billions of dollars of loans rose from 1.85 per cent to the Canadian prime rate of 6.6 per cent. Other factors included the timing and cost to complete the project, the toll structure and what happens when the initial contracts with oil shippers expire.

“This is an eye-watering number in terms of a writedown, but it’s only probably one-20th of what’s to come,” said Eugene Kung, a staff lawyer at West Coast Environmental Law. According to September financial statements, $16.5 billion of Trans Mountain’s debt was guaranteed with taxpayer dollars. Analyses by a number of experts predict the federal government will have to forgive all this debt and more due to the accumulation of interest.

Trans Mountain expects construction to wrap up in early 2024 and commercial operations to begin at the end of the first quarter of 2024. However, the Crown corporation says there will be further delays unless the Canada Energy Regulator lets it use smaller pipes for a stretch of challenging construction conditions between Hope and Chilliwack, B.C. Intervenors, including Simon Fraser University professors Tim Takaro and David Huntley, submitted documents detailing extensive concerns about the plan and the need to take the time to properly evaluate the changes to materials and coatings. The regulator rejected this application in early December, citing concerns about safety and pipe integrity, among others.

Trans Mountain has asked the regulator to reverse its decision, and claims that failing to do so could delay the project by approximately two years and cause the Crown corporation to “suffer billions of dollars in losses.” A hearing was held Jan. 12 on Trans Mountain’s request but it is not clear when the regulator will issue its final decision.

This is just the latest of several efforts by Trans Mountain to change construction methods late in the game. In September, the regulator approved the company’s application for a route deviation to dig a trench through a sacred site over the objections of Stk’emlúpsemc te Secwépemc Nation.

It’s like running a pipeline right through the Vatican, said Mike McKenzie, a Secwépemc knowledge keeper from Skeetchestn and commissioner of the Unceded Law Response Group. The only difference is that the inseparable burial and prayer grounds at Pípsell (Jacko Lake) are not marked by grand structures or religious buildings, he added.

“This is a really special area, we have all our medicines in this area,” said McKenzie during a December webinar hosted by the Wilderness Committee.

He showed participants photos of the Pípsell area, just southwest of Kamloops, B.C., where Trans Mountain is digging the trench for the new pipeline. 

Drone shot of Pípsell. Photo by Tim Takaro, courtesy of Unceded Law Response Group

“My vision quest was done on the top right of that photo right above the lake and people have done their vision quests all through this area,” said McKenzie. It’s not apparent from the drone shots, but this area is actually really high up and is called an entrance to the Sky World, he said, comparing it to being atop a mountain like Mount Garibaldi. 

“This is our holy waters. This is our transformation stories,” said McKenzie.

Efforts to stop Trans Mountain from tearing up these sacred lands have been ongoing. Most recently, McKenzie filed a notice of civil claim to the BC Supreme Court to try to immediately halt construction in the Pípsell area. The notice was filed on Dec. 29 and is still before the courts.

“This is literally destroying lives trying to keep up with their money, their resources, their efforts, everything that they do,” said McKenzie, adding that doing this work has been really tough on him and his wife.

“[Prime Minister Justin Trudeau] shouldn’t hide behind the 47-page decision of the Canada Energy Regulator that’s going to ultimately wipe away our rights until the end of time,” said McKenzie. “It worries me, really worries me what the future of Indigenous rights, title and jurisdiction are. But most importantly, that relates to the future of our sacred site and what we have left.”

Finance Canada did not respond to a request for comment by deadline.

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer

  • Natasha Bulowski, Journalist, @NBulowski
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