Trans Mountain Corporation announced their increased cost estimates, and the extended completion date for the Trans Mountain Expansion Project to the third quarter of 2023.
Trans Mountain has completed a full review of its Project schedule and cost estimates. With all work fronts now active, mechanical completion of the Project is anticipated to occur in the third quarter of 2023. The total Project cost has increased from $12.6 to $21.4 billion.
This estimate includes the costs of all known Project enhancements, changes, delays and financing, including impacts of the COVID-19 pandemic and the substantial preliminary impacts of the November 2021 BC floods in the Hope, Coquihalla and Fraser Valley areas.
Financing costs have increased by approximately $1.7 billion. The increase in financing costs will be incurred due to the increased cash expenditure required to construct the Project, and the extended construction schedule. Financing costs include interest paid to Trans Mountain’s owner for money borrowed for the Project as well as an imputed non-cash cost of equity capital provided by the owner of the Project.
"However, I want to assure Canadians that there will be no additional public money invested in TMC, Chrystia Freeland, Deputy Prime Minister and Minister of Finance said.
"TMC will secure necessary funding to complete the project through third-party financing, either in the public debt markets or with financial institutions. Both BMO Capital Markets and TD Securities have been engaged by the government to provide advice on financial aspects of the project.
"Their analyses confirm that public financing for the project is a feasible option that can be implemented swiftly. They have also confirmed that the project remains commercially viable. Our government acquired TMC and the Trans Mountain Expansion Project in 2018 because we knew it was a serious and necessary investment. This project is in the national interest and will make Canada and the Canadian economy more sovereign and more resilient.
"The transition to a net-zero economy will take many years. We will get there, but during that transition, our natural resources are needed globally. The Trans Mountain Expansion will ensure Canada receives fair market value for our resources. That is not the case today, while we are dependent on the United States for market access.
"Getting our resources to those global markets will be good our economy, and it will be good for our workers. TMC has signed agreements with 75 Indigenous communities worth more than $580 million, and the project will generate over $2.7 billion in Indigenous-based contract awards.
"Our government has also been working with Indigenous communities on further economic participation in Trans Mountain for more than two years, and we will announce the next step toward that important objective later this year.
"As we have said from the very beginning, our government does not intend to be the long-term owner of the project. We will launch a divestment process in due course. And before I close, on behalf of the Government of Canada, I want to publicly thank Ian Anderson, who is retiring as the President and CEO of Trans Mountain after many years of service," the Honourable Chrystia Freeland said. ■
The mid to upper level flow continues to amplify across the CONUS, leading to an active weather pattern across large portions of the eastern third of the nation.