Kinder Morgan, the Texas-based energy infrastructure giant couldn’t believe its luck when the Trudeau government offered it more than $4 billion for its aging Trans Mountain pipeline and to relieve it of its failing expansion project. Despite its giant status, Kinder Morgan couldn’t raise the requisite private financing to almost triple TMX’s capacity to ship Alberta tar sands oil overseas, and that was when the estimated cost of the project cost was a little over $7 billion. Today, the federal crown corporation that replaced it admits that cost has ballooned to more than $21.4 billion, leaving the federal Liberals and, more importantly, Canadians holding the bag on what was a bad economic bet from the beginning.
To make matters worse, the Liberal government and, most recently, Finance Minister, Chrystia Freeland has disingenuously claimed “there will be no additional public money invested in TMC.” That is nonsense, of course, since all published analyses, including that of Parliament’s own Budget Officer, conclude the expansion will not come close to paying for itself.
This month, it took an environmental NGO, Stand.earth, to inform Canadians, as shareholders of the crown corporation, that our six largest private banks will loan TMC $10 billion, the money needed to continue building the expansion. The feds have been tight-lipped about the whole affair, in spite of the public’s right to know. One thing is clear, the banks would not put up the money without the loan guarantee the Trudeau cabinet quietly provided – a guarantee that puts Canadian taxpayers on the hook for additional billions in liabilities entailed in this rapidly inflating boondoggle.
It appears the Liberals chose to borrow from the private banks, rather than finance the construction publicly at a considerable saving, so as to bolster the pretense that public money would not be involved in further financing of the expansion. Another sad lie.
As a new season of climatic catastrophes made itself known, the crown corporation that now owns TMX and the expansion project, blind to the irony of the moment, blamed rapidly rising estimates of the expansion’s cost partly on climate-caused phenomena!
So we end up with a massive subsidy to the oil industry, now making record profits, and at a time when we are pledged to end all subsidies to fossils – another Trudeau climate commitment broken. Add to that a risk-free gift to the equally undeserving profitable banks, who maintain their record of being amongst the world’s leading funders of fossil investments. And all this to paper over the Liberals’ bad choices. Why do we tolerate this?
How can an uneconomic project, designed to serve expanded tar sands production and consumption just when the world is crying out for winding down fossil fuel development, go ahead at our expense without the Trudeau Liberals having to pay the political price? Imagine what that $10 billion guaranteed bank loan could achieve in helping this country make good on its international commitment to curb emissions?
Why are we such patsies?
A colonized electorate remains the most plausible answer. We trust our corporate colonizers and their political handmaidens and ignore the evidence that might demand we act to assume our democratic responsibilities. If Cecil Rhodes were alive and a Canadian today, he’d be an oil industry CEO or a Bank President.
Alberta royalties update
A few weeks ago, I wrote about the growing Alberta royalty windfall, suggesting that it amounts to as much as an unpredicted $15 billion this fiscal year. Now it seems that may be a significant underestimate.
The respected Calgary-based industry analyst, Peter Tertzakian, told CBC News recently that he thinks the royalty windfall could reach $24 billion this calendar year!
If you expect the candidates seeking to replace Jason Kenney to debate plans for disposing of those revenues, don’t hold your breath. The UCP remains a party without imagination. As for reversing Kenney’s ill-considered corporate tax cuts – a gift especially to oil majors making record profits – or his egregious cuts to essential public services, the silence is reprehensibly deafening.
If you expect the UCP candidates seeking to replace Jason Kenney to debate plans for disposing of those revenues, don’t hold your breath. This remains a party without imagination. As for reversing Kenney’s ill-conceived corporate tax cuts, or his egregious cuts to essential public services, the silence is reprehensibly deafening.