Ottawa, Ontario - Department of Finance Canada
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced next steps in light of the revised cost estimate and completion timeline published by Trans Mountain Corporation (TMC) for the Trans Mountain Expansion Project (the project).
With 50 per cent of the pipeline already built and the project significantly de-risked, the Deputy Prime Minister indicated that the government will spend no additional public money on the project, and that TMC will instead secure the funding necessary to complete the project with third-party financing, either in the public debt markets or with financial institutions.
The government has engaged both BMO Capital Markets and TD Securities to provide advice on financial aspects of the project. Their analyses confirms that public financing for the project is a feasible option that can be implemented promptly. They have also confirmed that, despite the increased cost estimate and completion timeline, the project remains commercially viable.
There remains strong interest from prospective purchasers in operational infrastructure assets like the Trans Mountain Expansion Project, underpinned as it is by 20-year shipper contracts.
The government does not intend to be the long-term owner of the project, and the analyses received, which are based on a range of different scenarios and market conditions, support the government's continuing confidence that previous public investments in the pipeline will be recouped, with the potential for a positive financial return.
The project continues to be an important investment in Canada's economy that is creating thousands of Canadian jobs and will responsibly deliver Canadian natural resources to meet demand in global markets.
The project is also creating economic benefits for many Indigenous communities through contracting, financial compensation, and employment and training opportunities. To date, TMC has signed 69 agreements with 75 Indigenous communities worth over $580 million, and the project will generate over $2.7 billion in Indigenous-based contract awards. The government has also been engaging affected Indigenous communities on further economic participation in Trans Mountain for more than two years, and will announce the next step toward that important objective later this year.
The federal government intends to launch a divestment process after the expansion project is further de-risked and after economic participation with Indigenous groups has progressed.
The Deputy Prime Minister, on behalf of the Government of Canada, took the opportunity to thank Ian Anderson for his years of service on the announcement of his retirement as President and CEO of Trans Mountain Corporation.
