TWN is engaged in the Trans Mountain Interim Toll Hearing, as timelines stretch into 2025
Water protectors gathered in front of an oil tanker being loaded with diluted bitumen at Trans Mountain’s Westridge Marine Terminal in Burrard Inlet this June.
TWN has been actively participating as an intervenor in the Canada Energy Regulator’s (CER) Trans Mountain Interim Toll Hearing since June 2023. This work is a continuation of our longstanding financial dissuasion strategy, part of the Sacred Trust Initiative’s 4-pillar approach.
When the Canadian government re-approved the Trans Mountain Expansion Project (TMX) in 2019, they stated that the economic benefits of the pipeline justified the burdens, including the violation of TWN’s Indigenous rights, oil spill risks, and climate-related risks. Our economic analyses have consistently shown this not to be the case. For this reason, the Sacred Trust team has been focusing on TMX’s finances as one of the core pillars of our work.
TMX finances are its Achilles heel. In 2015, TWN sent a delegation to New York City to meet with the Project’s largest institutional investors to tell them directly about TWN’s opposition to TMX. We also traveled to Houston, Texas to Kinder Morgan’s Annual General Meeting on three occasions. In the end, Kinder Morgan abandoned the project because they too understood it was too risky and would not earn a profit. The federal government subsequently bailed out the project in 2018, and since then, construction costs have spiraled out of control. The original estimate for TMX was $5.4 billion – the current estimated cost of construction is $34 billion – nearly 7 times the original estimate.
Now that TMX is operating, the risks to TWN’s rights, title and culture that we identified in our groundbreaking independent assessment have become real. This does not change TWN’s sacred duty to steward and restore the Inlet, but it does add to the existing threats that TWN already deals with.
The CER’s interim toll hearing is where TMX cost overruns become a real problem. The tolls are the fees paid to the pipeline operator by its customers, oil companies. Trans Mountain has asked the CER to approve tolls previously approved in 2013 (before the project was approved, and back when it was supposed to cost $5.4 billion). The oil companies want the tolls reduced. However, even without lowering the rates, TMX’s proposed tolls will cover less than half of the $34 billion construction cost. This means that the Canadian public will never be paid back the $17 billion it loaned Trans Mountain. This will be one of the largest subsides to the oil and gas sector in Canadian history, even though it will likely be spun as ‘economic reconciliation.’
TWN’s intervention is critical because we are the only intervenor who is not a customer of Trans Mountain, representing the public interest as well as TWN’s interest. We are engaging in this regulatory process because we want to ensure that Trans Mountain has enough revenue to uphold their own responsibilities of pipeline integrity by continuing to spend adequately on maintenance, safety and spill response. In doing so, we are testing Trans Mountain’s evidence, which includes optimistic assumptions and unconventional financial analysis that distort the true financial picture by suggesting TMX remains financially viable. By asking these hard questions, we are also putting more of Trans Mountain’s financial picture into the public domain, to be used for due diligence of any future owners of TMX.
We have engaged a public finance expert and are actively participating in the hearing, filing information requests and producing our own expert evidence which will show how Trans Mountain has not been transparent with Canadians. The oral hearing is currently scheduled to start in May 2025 with final arguments to take place in the summer.