The TMX Fiasco: the latest chapter

The Liberals’ failure to be open with Canadians about another pipeline (the Trans-Canada) in 1956 cost them the government and brought us John Diefenbaker. Today, the lack of transparency about the Trans Mountain Pipeline Extension (TMX) poses the more nightmarish possibility of a government run by Pierre Poilievre. God help us!

When you and I, and other Canadians, bought the Trans Mountain Pipeline for $4.5 billion in 2019, it was already a private sector white elephant.

Trans Mountain’s proposal to triple its capacity with the TMX expansion couldn’t raise the private support needed for viability. The parrot no longer flew. It was deceased. This fact didn’t prevent the fumbling Trudeau government from buying it. A tragic, and stupid, mistake.

Why Ottawa stepped in to bail out the US owner, Kinder Morgan, may be obvious to some, but economic logic had nothing to do with it (see economist Robyn Allen’s analysis here).

The Liberals’ suggestion that the boost in Canada’s fossil fuel exports will help pay for the transition to renewable energy is part of the Big Lie underlying their climate policy – that we can meet our international obligations to cut emissions while increasing production. Utter nonsense.

And if the Liberals expected the purchase to win political points in this irrationally anti-Trudeau, parochial region, the gambit has been a miserable failure.

Like an entitled spoilt child, the Alberta-based, foreign-owned, climate-denying oil and gas industry appreciated the gesture. And why not? It entails a massive multi-billion dollar public subsidy, a life-extending stimulus to oil sands growth, and consoling evidence that Canada’s international commitments to address the climate emergency are not to be taken seriously.

This past Friday, our Crown agent running the TMX project, Trans Mountain Corporation, announced that the cost of the TMX boondoggle is now $30.9 billion!!! In a release filled with half-truths, Trans Mountain chose not to mention that this is more than four times the original estimate 5 years ago. With at least another year to go before the pipeline starts operating, the final number will likely approach $35 billion.

It’s an appalling amount when one thinks of the opportunity cost of that putative “investment”. What else might a visionary federal government confronted with a climate emergency have done with that money?

Then, consider the impediment such an enormous investment creates to the essential and inevitable transition we must make away from our reliance on fossil fuels to their alternatives. A massive stranded public asset awaits us. The big losers are future Canadians who will pay the price, both in economic terms and in terms of their quality of life.  

The Trans Mountain release, applying the typical illogic of the industry, justifies the huge expenditure simply in terms of its contribution to the GDP and the jobs provided, devoid of consideration of what alternative investments might have produced. By such demi-logic, we should welcome even higher cost over-runs.

The biggest lie by omission is the absence of any recognition of the environmental costs of, not just the additional oil sands production and the construction of the line through a fragile environment, but tripling Trans Mountain’s oil exports and boosting world consumption. Such “externalities”, if added to the price of the product, would have disastrous consequences for the marketability of the pipeline’s oil. As it is, Canadian taxpayers, not the industry, will already likely pay a significant price covering losses to ensure the pipeline is competitive.

Bizarrely, in explaining the rising cost estimate for TMX, Trans Mountain has the temerity to point to “catastrophic flooding in B.C.” as one cause without, by the way, mentioning climate change, and without acknowledging the connection between expanding fossil fuel production (and consumption) and the climate emergency.

None of this is surprising, but it is reprehensible, especially given that we are talking about a corporation we own reporting to us in the context of a climate catastrophe that threatens our very survival.

Will we continue to respond with the silence of colonized lambs?

By Peter Puxley

Hi, I'm Peter Puxley, an economist, geographer and urban planner by academic training, and a political organizer/activist, development educator, journalist, policy wonk, researcher and political staffer by practice. I have tried my hand at poetry, fiction and non-fiction writing, some of which has been published.

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