Bill Morneau, who remains Minister of Finance, arrives for a swearing in ceremony at Rideau Hall in Ottawa, on Wednesday, Nov. 20, 2019. THE CANADIAN PRESS/Justin Tang

Feds won’t explain claim pipeline expansion will raise $500M in tax revenue

Ottawa bought the pipeline for $4.5 billion in 2018

The federal government says the Trans Mountain pipeline expansion will bring another $500 million a year in corporate tax revenue to be spent on fighting climate change, but the Liberals won’t say where they got that number.

The figure was cited by the government when it approved the project a second time last June and was also included in the Liberals’ campaign platform.

In 2018, the government stepped in to buy the existing pipeline between Alberta and the B.C. coast from Kinder Morgan Canada for $4.5 billion. The company and its investors got cold feet about proceeding as political opposition to the pipeline threatened unending delays, so Ottawa bought it. The government intends to see through the expansion and then sell it back to the private sector.

Under heavy criticism from environmentalists for pushing a major pipeline project at the same time as they’ve insisted on the need to slash greenhouse-gas emissions, the Liberals promised any new revenue from the expansion project, including corporate taxes, will be spent only on climate-change mitigation. That includes natural solutions like tree planting and clean technology projects.

Matthew Barnes, a spokesperson for Finance Minister Bill Morneau, said in an email Monday the $500-million figure was a “Finance Canada estimate based on the additional corporate tax revenue that the federal government could receive from the successful completion and operation of TMX.”

British Columbia-based economist Robyn Allan, who is skeptical about the benefits of the expansion project, said she has not been able to get the government to explain the figure for months and is accusing the government of obstructing the information because the analysis won’t hold up to scrutiny.

“If they can’t tell you how it was derived it really begs the question if there is any substance to it at all,” she said.

She is also demanding the government tell Canadians what the expansion is going to cost to build. The last estimate was $7.4 billion but that figure is now several years old and hasn’t been updated since the federal government bought the pipeline.

The existing Trans Mountain pipeline carries about 300,000 barrels a day of crude oil and related products from Edmonton to a terminal in Burnaby, B.C. The expansion project is to build a second, roughly parallel, pipeline to nearly triple the system’s total capacity. The expanded pipeline is primarily to carry diluted bitumen to be loaded on oil tankers for export.

The government’s hope is if Canada can get more oil to coastal ports, new buyers in Asia will step in, reducing Canada’s reliance on the United States as an oil customer and increasing the price Canadian producers can get.

It is the linchpin in Prime Minister Justin Trudeau’s attempt to continue to benefit from Canadian natural resources while fighting climate change. Alberta is angry the pipeline hasn’t yet been built, and blames Trudeau’s regulations and climate policies for the delays on Trans Mountain and the lack of other new pipelines as well.

Climate activists argue the pipeline works against Canada’s promised reductions in greenhouse-gas emissions.

READ MORE: B.C. First Nations drop out of court challenge, sign deals with Trans Mountain

READ MORE: Trans Mountain received $320M in government subsidies in first half 2019: report

Mia Rabson, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Three dogs found wandering West Kelowna returned to owners

Two of the three dogs were found to be severely injured

West Kelowna looking for feedback on 2020 draft budge

The city is also seeking feedback on its 2020-2024 financial plan

Power restored to Big White

It’s unknown why the power went out Tuesday afternoon

UPDATE: House fire quickly knocked down in South Kelowna

According to Kelowna Fire Department, the house sustained interior damage during the blaze

Two-month-old Kelowna boy diagnosed with rare heart disorder returns home from treatment

Arel spent two weeks at B.C. Children’s Hospital in Vancouver after suffering multiple cardiac arrests

VIDEO: Feds look to help 126 Canadians quarantined in China for coronavirus

China has confirmed more than 4,500 cases of the new virus, with more than 100 deaths

Missing Vernon man possibly sighted in Lower Mainland

Information leads family, friends to believe Jay Rosenberger near Lower Mainland Saturday

Prolific South Okanagan criminal will be freed for time served

Afshin Ighani pleads guilty to assault charges but will be set free for time served

Sap thief taps Saanich park maple trees, faces hefty fine

One tree found with four taps in Mount Doug Park

Shuswap man given six months jail time for possession of child pornography

Forty-six-year-old will be on National Sex Offender Registry for 20 years

B.C. reports first coronavirus in Vancouver region

First patient visited Wuhan, China, reported symptoms

Museum digs up history for ’60s Vernon Winter Carnival

Get Groovin’ with the Grandkids or flashback to the ’60s with tunes, trivia and costumes

Uber threatens legal action to ‘defend its right’ to operate in Surrey

‘I have no concerns,’ Mayor Doug McCallum replies

Victoria resident says WestJet employee uttered racist comment, refused to let her on plane

Customer claims she was told ‘You guys can’t handle your alcohol’ by WestJet employee

Most Read