The federal government is delaying a final decision on the expansion of the Trans Mountain pipeline by one month – a delay that is worth about $58 million.
In February, after reconsidering the potential marine impacts of an expanded pipeline and increased oil tanker traffic, the National Energy Board (NEB) tacked on an additional 16 conditions to the original 156 required as part of the expansion’s approval.
Federal cabinet had 90 days to make a decision on whether to reapprove the expansion, which would have been May 22.
But on Thursday, April 18, two days after Jason Kenney’s United Conservative Party swept Alberta in a provincial election, the Trudeau government announced it is delaying its decision by one month. It will now make a decision on June 18.
Natural Resources Minister Amarjeet Sohi said the extra time is needed to complete First Nations consultations.
“The Government of Canada remains steadfast in its commitment to do things differently on TMX, moving the process forward in the right way and following the guidance of the Federal Court of Appeal,” he said in a news release.
“This means ensuring that consultations are not only meaningful but also open and transparent.”
He referred to a federal court ruling last year that quashed a order in council that approved the $7.4 billion expansion – an expansion that may now cost closer to $9 billion.
The court found that the NEB had erred in not giving full consideration to the impact of increased tanker traffic on Southern Resident Killer Whales.
The court also determined that federal officials failed to do proper late-stage negotiations with affected First Nations, sending the government back to the drawing board and negotiating table.
Sohi said the federal government is making “real progress” on those negotiations.
“The government has consistently said that a decision would only be made on the project once we are satisfied that the duty to consult has been met,” Sohi said. “Through this process, Indigenous groups have told us that more time is needed to complete the Phase III consultations.”
In a news release, Ian Anderson, president of Trans Mountain Corp. wrote: “While we await that decision, we will continue doing what we can to be poised to re-start the Expansion Project and ultimately deliver on our commitments to Canadians.”
For every month that the project is delayed, the value of the project decreases, according Ottawa’s own Parliamentary Budget Officer (PBO).
The Trudeau government paid $4.5 billion to acquire the existing pipeline and the Trans Mountain Expansion project. The sale price included the $1 billion already spent on the TMEP, which had been estimated at $7.4 billion. But because of delays, it is now estimated the project could come in at $9.3 billion.
In a report released in January, the PBO estimated that a one-year delay in getting the project built decreases its value by $693 million. That means that a project that Canadians will own – unless Ottawa can find a buyer – will lose $58 million in value due to the one-month delay in approving the expansion.