Trans Mountain: 100 years to solvency
It is coming clear why Finance Canada has refused to share the financial reports on Trans Mountain produced by TD Securities and BMO Capital Markets. Finance Canada says the reports show TMX is still commercially viable, but the Parliamentary Budget Officer (PBO) revealed that the banks are using an implausible and irresponsible time frame of 100 years to test the pipeline’s viability, a National Observer article by Natasha Bulowski reveals today.
The Environment Minister himself has said the project will only operate for 30-40 years and even the PBO’s assumption that the current 20 year contracts will be renewed on the same terms is optimistic, given Canada’s climate targets.
On the basis of the BMO and TD analysis, the Federal Government granted a $10 billion gift to the banks in the form of a loan guarantee. By using a 100 year timeframe, TD and BMO would be distorting the reality of the lifetime of the project and at the same time demonstrating how seriously they take the climate crisis. Their actions speak louder than their marketing around Net Zero 2050 climate targets.
Omar Mawji, energy finance analyst for Canada for the Institute for Energy Economics and Financial Analysis said: “Either the people doing the analysis don’t quite understand the dynamics of a pipeline and a supply source. Or, you know, they’re doing it because … they’re trying to look for a way to make it profitable”
TWN has been raising issues with TMX’s commercial viability for years, from meetings on Wall Street with Kinder Morgan’s investors and credit ratings agencies, to Kinder Morgan’s annual meetings and beyond. When we raised the issue at the NEB, the CER and at the consultation table with Canada, our concerns and financial analyses were dismissed or ignored. Now Canadians could be on the hook for more than $25 billion dollars for this costly mistake.