Bill Morneau, who remains Minister of Finance, arrives for a swearing in ceremony at Rideau Hall in Ottawa, on Wednesday, Nov. 20, 2019. THE CANADIAN PRESS/Justin Tang

Feds won’t explain claim pipeline expansion will raise $500M in tax revenue

Ottawa bought the pipeline for $4.5 billion in 2018

The federal government says the Trans Mountain pipeline expansion will bring another $500 million a year in corporate tax revenue to be spent on fighting climate change, but the Liberals won’t say where they got that number.

The figure was cited by the government when it approved the project a second time last June and was also included in the Liberals’ campaign platform.

In 2018, the government stepped in to buy the existing pipeline between Alberta and the B.C. coast from Kinder Morgan Canada for $4.5 billion. The company and its investors got cold feet about proceeding as political opposition to the pipeline threatened unending delays, so Ottawa bought it. The government intends to see through the expansion and then sell it back to the private sector.

Under heavy criticism from environmentalists for pushing a major pipeline project at the same time as they’ve insisted on the need to slash greenhouse-gas emissions, the Liberals promised any new revenue from the expansion project, including corporate taxes, will be spent only on climate-change mitigation. That includes natural solutions like tree planting and clean technology projects.

Matthew Barnes, a spokesperson for Finance Minister Bill Morneau, said in an email Monday the $500-million figure was a “Finance Canada estimate based on the additional corporate tax revenue that the federal government could receive from the successful completion and operation of TMX.”

British Columbia-based economist Robyn Allan, who is skeptical about the benefits of the expansion project, said she has not been able to get the government to explain the figure for months and is accusing the government of obstructing the information because the analysis won’t hold up to scrutiny.

“If they can’t tell you how it was derived it really begs the question if there is any substance to it at all,” she said.

She is also demanding the government tell Canadians what the expansion is going to cost to build. The last estimate was $7.4 billion but that figure is now several years old and hasn’t been updated since the federal government bought the pipeline.

The existing Trans Mountain pipeline carries about 300,000 barrels a day of crude oil and related products from Edmonton to a terminal in Burnaby, B.C. The expansion project is to build a second, roughly parallel, pipeline to nearly triple the system’s total capacity. The expanded pipeline is primarily to carry diluted bitumen to be loaded on oil tankers for export.

The government’s hope is if Canada can get more oil to coastal ports, new buyers in Asia will step in, reducing Canada’s reliance on the United States as an oil customer and increasing the price Canadian producers can get.

It is the linchpin in Prime Minister Justin Trudeau’s attempt to continue to benefit from Canadian natural resources while fighting climate change. Alberta is angry the pipeline hasn’t yet been built, and blames Trudeau’s regulations and climate policies for the delays on Trans Mountain and the lack of other new pipelines as well.

Climate activists argue the pipeline works against Canada’s promised reductions in greenhouse-gas emissions.

READ MORE: B.C. First Nations drop out of court challenge, sign deals with Trans Mountain

READ MORE: Trans Mountain received $320M in government subsidies in first half 2019: report

Mia Rabson, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

West Kootenay residents stranded in Peru seek a way home

Three West Kootenay residents are in remote places, unable to get to Lima’s international airport

West Kootenay couple escapes Spain – safe, sound, and in self-isolation

BC couple Garrett Kucher and Tory Apostoliuk make it home after almost a week of lockdown in Spain

Social media a blessing and a curse during time of crisis: B.C. communication expert

‘In moments of crisis, fear is very real and palpable,’ says SFU’s Peter Chow-White

All Kootenay Boundary parks and outdoor facilities closed

RDKB reminds all residents the shutdown is for public safety and in response to COVID-19

Interior Health officials outline pandemic response in virtual town hall

Kelowna-Lake County MLA Norm Letnick moderates digital discussion, Q&A with Interior Health leadership

Canada expands 75% wage subsidy to COVID-19 affected businesses of all sizes: Trudeau

Program will provide up to $847 per week for each worker

Canadian COVID-19 update: Cases spike in Quebec & Ontario; Nine O’Clock Gun salutes health workers

Comprehensive Canadian news update as of 12:30 p.m., Monday, March 30.

Cruise ships, one with COVID-19 on board, carry Canadians covertly through Panama Canal

Zaandam, Rotterdam pass through canal under cover of darkness in face of local protests

’The energy sector is destroyed beyond repair’: expert on COVID-19’s impact on economy

‘That’s never been heard of before; no one sells oil for $4 a barrel.’ – Dan McTeague

LifeLabs reducing public hours as it assists with COVID-19 testing

Coronavirus tests not done at B.C. patient centres, referrals only

24,000 Canadian Forces members ready for COVID-19 response: Defence Minister

No direct requests made by premiers yet, national defence minister says

IN DEPTH: How B.C. emptied its hospitals to prepare for COVID-19

Thousands of beds have been freed up, but patients and seniors have had to sacrifice

Kootenay Meadows Farm experiencing shortage of glass milk bottles

Some grocery stores have stopped accepting bottle returns amid COVID-19 concerns

‘Nothing concrete’: Tenants, landlords lack details after B.C. unveils COVID-19 rental aid

Single mom in Golden says she’s already going to the food bank after being laid off

Most Read