Ottawa | Traditional, unceded territory of the Algonquin Anishinaabeg People – Ministers Chrystia Freeland and Mary Ng have just approved a giant new fossil fuel subsidy: a $10 billion loan guarantee for the Trans Mountain pipeline. This will put even more taxpayer dollars on the line for a federally owned project that has clearly become a financial boondoggle, as the costs keep ballooning. It’s another broken promise from a government that committed to end fossil fuel subsidies. Instead of spending billions on a fossil fuel pipeline that will further fuel the climate crisis, the Government of Canada should be ensuring a safe future by investing in climate solutions.
- This decision comes just months after Minister Freeland announced that the government would not spend any additional public money on the project.
- Though the government is resisting defining this transaction as a fossil fuel subsidy, the World Trade Organization – which is widely seen as having the most authoritative definitions – does consider loan guarantees as subsidies.
- A recent report from IEEA finds that between the $4.7 billion purchase price and the reported $12.6 billion construction costs, Canadian taxpayers have already funded $17.3 billion on the project. To complete the project, another estimated $8.8 billion will be needed. Even if the Canadian government finds a buyer for the pipeline, under current market conditions, it will not receive a price that covers the $26.1 billion project costs, and any additional costs to come. A $26.1 billion investment could have funded every major wind and solar project in Canada from 2019-2021 five times over.
- The Canadian Energy Regulator’s analysis shows that Canada’s oil export needs can be met with existing capacity, making additional pipelines unnecessary- including the Trans Mountain Expansion pipeline. The Parliamentary Budget Office found that even modest new climate policies, in line with what governments have already committed to, would result in the pipeline becoming a financial loss.
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