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A watchdog said Thursday Canadian Prime
Minister Justin Trudeau paid more than he
needed to for a controversial oil pipeline to the
Pacific — which could come back to haunt him in
October elections.
The federal government stepped in to buy and
effectively nationalize the Trans Mountain pipeline
to get a key Canadian resource to new overseas
markets after mounting legal challenges and
environmental protests stalled the project.
In a report, the Parliamentary Budget Officer
(PBO) estimated the current value of the pipeline
was between Can$3.6 billion (US$2.7 billion) and
Can$4.6 billion.
“From our analysis, the government of Canada’s
purchase price of Can$4.4 billion does put it at
the higher end of the pipeline’s valuation range,”
said PBO Yves Giroux.
“Our financial assessment assumes of course that
the pipeline is built on time and on budget,” he
said in a statement.
Canada is the world’s fourth largest oil producer
and exporter, but almost all of it goes to the
United States.
Trudeau’s government has declared building new
conduits to ship oil to new overseas markets a
national imperative, in order to ease Canada’s
reliance on the US and to get a better price for its
oil.
In August, the federal government bought the
715-mile (1,150-kilometer) Trans Mountain
pipeline and relaunched consultations with Pacific
coast indigenous groups after a court ruled the
tribes should get a say in the project to move
890,000 barrels per day.
The tribes worried that increased shipping from a
marine terminal at the end of the route in
Vancouver would impede the recovery of killer
whale populations in the area.
Trudeau has faced fierce criticism from
environmental activists for supporting the oil
industry and from pipeline proponents who lament
an increasingly onerous regulatory regime that
has strangled growth in the oil sector.
Opposition parties heaped on more scorn in
parliament Thursday, with the New Democrats
accusing the ruling Liberals of squandering cash
that could have gone to support “green jobs”
while the Tories complained that the Trans
Mountain pipeline remained stalled three years
after it was approved.
The project is also key to Canada meeting its
Paris climate target because Alberta — whose oil
sands are the nation’s single largest pollution
emitter — has agreed to take action against
carbon emissions only if it gained access to new
markets for its oil.
Construction of the new conduit was pegged at
Can$7.4 billion in 2016, but the PBO estimates
that it will now cost Can$9.3 billion by the time it
is completed in 2021.
source: www.vanguardngr.com/2019/01/canada-paid-a-high-price-for-oil-pipeline-budget-watchdog/