Update On Resistance to the Trans Mountain Pipeline Expansion Project

This overview of recent TMX developments will prepare you with a clear and up-to-date understanding of the issue for participating in upcoming calls-to-action. This page also explains the rationale for a new strategic campaign focus: calling for an end to the federal financial support that presently sustains the project.

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Economic circumstances for the TMX are at an all-time low, making this a pivotal time for community mobilization to prevent additional political support for construction loans.

On June 22nd, the Parliamentary Budget Officer (PBO) published a report which confirmed that the TMX “no longer continues to be a profitable undertaking,” and as such the original justifications for the project which were conveyed to the public are no longer relevant to its ongoing construction.

The TMX is now almost four times the original projected cost of $5.4 billion, with its most recent budget at $21.4 billion. Every segment of the pipeline expansion project is behind schedule, due to permitting delays, pandemic-related shut downs, climate disasters such as wildfires, floods, landslides and unprecedented heat domes.

Late last year, Trans Mountain expressed significant financial concern about whether they could afford to proceed with the TMX. Political intervention in the form of a $10 billion loan guarantee has recently revived the project, enabling the corporation to secure additional funding by sharing the financial risk with taxpayers. TD, RBC, CIBC, BMO, Scotiabank and the National Bank of Canada are now positioned to profit from this new arrangement.

We remain resolutely opposed to the TMX and are calling for an end to the ongoing economic support being provided by the federal government.

Also In this Update:

No Free, Prior and Informed Consent

“Canada’s government is trying to build a pipeline through Indigenous peoples’ lands without their consent to export the number-one driver of the climate crisis,” said Kukpi7 Judy Wilson, Secretary-Treasurer of the Union of BC Indian Chiefs (UBCIC). “Instead, we should cut our losses, cancel TMX and start investing in renewable energy and other climate mitigation opportunities in Indigenous communities.”

The Trans Mountain pipeline expansion route transects numerous territories of First Nations that remain resolutely and justly opposed to the project. The right of Indigenous peoples to Free, Prior and Informed Consent (FPIC) as written in the UN Declaration on the Rights of Indigenous Peoples continues to be ignored. Canada resumes construction on the TMX despite the urging of the UN Committee on the Elimination of Racial Discrimination (CERD).    

Participation in industrial development at this magnitude remains a critical choice that merits careful and long-term consideration about the preservation of Indigenous sovereignty for all impacted Nations along the route.  While Indigenous self-determination and economic self-sufficiency remain paramount, divisive structures which operate through coercion are longstanding themes of colonial violence as people have been economically backed into a corner and historically separated from one another with assimilative intent.  

Canada continues to allocate millions of dollars toward forcibly removing Indigenous people from their territories on behalf of industry. These acts are not unusual, or new. Indigenous land and water protectors that stand in opposition have been subject to unjust systems that criminalize them and suppress their right to move freely while practicing their own laws in the defense of their Traditional Territories.

Articulated through an open letter from the Union of BC Indian Chiefs (UBCIC):

“Indigenous land defenders have been criminalized and subject to harassment, violence, discrimination, intimidation, surveillance, and forceful land dispossession that constitute a severe breach in the human rights standards entrenched in the United Nations Declaration on the Rights of Indigenous People as well as constitutional law.” 

The ecological harm and subsequent health impacts of an oil spill along the pipeline route would undoubtedly hinder the safety, security and enjoyment of traditional cultural practices that are rooted in otherwise healthy, seasonally anticipated, interconnected and species-rich lands and waters. Irresponsible oil development has occurred at the expense of cultural ways of life for those living in the heart of the tar sands and threatens to do similar damage throughout BC and worldwide.


Violence Against the Land Brings Violence Against Women

Violence against the land also brings violence against women as Indigenous women and Two-Spirited+ people experience the traumas brought by climate change and colonization simultaneously.

As greenhouse gas (GHG) emission soar, Indigenous Nations worldwide are experiencing an unprecedented and direct result of missed climate targets and failed GHG reduction strategies. Sources of clean drinking water are disappearing, and food security is declining with disproportionate impacts on the lives of women.

The ongoing violence against Indigenous women, girls and 2SLGBTQQIA+ people within Canada is overwhelming, with recorded experiences of violence at almost triple that of non-Indigenous women. The National Inquiry on the Missing and Murdered Indigenous Women, Girls and Two-Spirit+ People concluded that this violence amounts to nothing short of genocide, as many are still demanding justice for their Stolen Sisters.

The First Nations Leadership Council has recently called for immediate action to address colonial violence against First Nations women and 2SLGBTQQIA+ People.

Similar patterns of violence have emerged during the construction of projects like the TMX. Research shows a direct correlation between temporary work-site housing for industry workers or “man camps” and violence against Indigenous women. Harassment is not uncommon as many of these camp settings do not have anti-violence training, cultural sensitivity training or programs to address prevalent misogyny, racism, white supremacy, and sexualized violence. In these places, women go missing as they seek to travel through remote areas that do not have free and reliable transportation options. Much is needed to adequately address the trauma experienced by those living in these communities and it is imperative that Canada adheres to the Calls for Justice (p. 170).


Federal Financial Support for Fossil Fuel Expansion Continues

In early May it was revealed to the public that last year there were significant concerns from Trans Mountain Corporation about ceasing the TMX all together with doubts as to whether or not external financing could be obtained.

In 2018, the Liberal Government purchased the Trans Mountain pipeline for $4.5 billion. Now despite the federal government’s promise to eliminate fossil fuel subsidies by 2023, and a statement by the Finance Minister that no additional public money would be spent on the project, Canada has taken extraordinary measures to intervene once more with the economics of the TMX.


A New $10 Billion Loan Guarantee

In April, Trudeau’s Cabinet approved a $10 billion loan guarantee for Trans Mountain Corporation. The public learned about it two weeks later as it was approved without an opportunity for open parliamentary debate. The TMX has now become such a large financial liability that it would certainly have been otherwise abandoned.

A loan guarantee effectively shields private-sector lenders from absorbing the full risk that they would be taking on if not paid back in full by Trans Mountain. Debts incurred by a Crown corporation subsidiary will also belong to the public. If the private-sector lenders (TD, RBC, CIBC, BMO, Scotiabank and the National Bank of Canada) are not paid back by Trans Mountain, this money will instead be provided to them by the Canadian public. Experts estimate that taxpayers could now end up covering upwards of $26.1 billion.

An example of a similar loan guarantee arrangement was made two years ago when the Alberta government agreed to $6 billion in loan guarantees for TC Energy Corporation for constructing the Keystone XL. The Alberta government had to pay off $1.3 billion when the project’s permit was revoked.


The Banks Financing TMX Construction

Trans Mountain Corporation has now secured up to $10 billion from a group of Canadian financial institutions: TD, RBC, CIBC, BMO, Scotiabank and the National Bank of Canada.  

RBC and TD Bank have long been the target of public demonstrations due to their financial support for Coastal GasLink. Banks are now being publicly held to account for unethical practices. Canadian banks have invested nearly $21 billion in oilsands projects since 2021, with RBC leading the way. 

Scotiabank has abandoned the Canadian Association of Petroleum Producers (CAPP), and ING recently committed to no longer finance new oil and gas projects. VanCity Credit Union refuses to facilitate access to capital for oil, gas or coal companies and encourages divestment from fossil fuels. The trend is similar with insurance companies, with 18 having now sworn off the TMX, closing their door while Trans Mountain’s brokers seek their next insurance policy deal.


No Economic Justification

“TMX’s fate as a stranded asset is all but assured, with a lasting legacy of infringement of Indigenous rights, climate denial, and fiscal irresponsibility.” - Grand Chief Stewart Phillip, President of the Union of BC Indian Chiefs (UBCIC).

It is increasingly unlikely that the TMX will ever generate enough profit to pay back its investors. Financial involvement by First Nations must now be very carefully considered as projects face costly and unpredictable futures.

The project's toll structure reveals a model which cannot adapt to the changing energy landscape. Pipeline owners typically charge companies a toll for shipping their product through their pipeline. These fees then pay off the initial construction costs and keep the lights on by generating profit. But the TMX has a unique toll structure that will only be able to recover about 20 percent of cost overruns. Trans Mountain would need to increase their existing toll structure by over 100 percent to earn a profit. This would not only have to be first approved by the Canadian Energy Regulator (CER), but it would also no longer be competitive with international markets and become a hotly contested cost increase among oil shippers.

Construction delays lead to significant budget setbacks, and if the trend of extending deadlines (originally a 2019 completion date) and budgets (originally $5.4 billion in 2013) for the TMX is an indication, exponential growth in project debts and delays would be unsurprising.


No Public Transparency

Updates on Trans Mountain are slow to be shared with the public. There was a two-year delay in announcing that the overall budget had changed from $12.6 billion to $21.4 billion.

“That the Trans Mountain Corporation took two years to complete this review and inform the public is outrageous, considering how massive the public investment in the project has been,” stated Chief Don Tom, Vice President of the Union of BC Indian Chiefs (UBCIC).

The recent decision to approve a $10 billion loan guarantee for Trans Mountain was made without public consultation or parliamentary debate.

Secrecy is a longstanding theme and has left journalists frustrated by an ongoing lack of public information. Decisions about the project are not being communicated in a timely manner where it concerns Indigenous rights violations, billions of taxpayer dollars, and a landscape of climate disaster


The TMX Cannot Fund a Clean Energy Transition

During a global pandemic, wildfires, heat domes, floods and landslides, the TMX is incompatible with a safe and just climate future. Both the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) call on countries for a rapid shift away from fossil fuel investments if we are to meet our 1.5C target.

In 2014, a study for the City of Vancouver estimated that the TMX would create 71,100,000 metric tons (71.1 Mt) of Co2e annually, noting severe economic, ecological and social consequences if Canada fails to meet its climate targets.

UN secretary general António Guterres recently stated that: "…investing in new fossil fuel infrastructure is moral and economic madness. Such investments will soon be stranded assets; a blot on the landscape, and a blight on investment portfolios."

The Trans Mountain expansion project has been touted as a way to accelerate funding for the clean energy transition. A statement from the Prime Minister in 2019 claimed that, “every dollar the federal government earns from this project will be invested in Canada’s clean energy transition. The environment and the economy go hand-in-hand. When we create prosperity today, we can invest in the clean jobs, technologies, and infrastructure of the future...” Bill Morneau also stated “make no mistake, this is an investment in Canada's future."

To date, this $21.4 billion fossil fuel expansion project has been economically supported by Canadian taxpayers with no resulting revenue for the clean energy transition in sight.

UPDATE: On June 22nd, the Parliamentary Budget Officer (PBO) published a report which confirmed that the Trans Mountain expansion “no longer continues to be a profitable undertaking,” and as such the original justifications for the project which were conveyed to the public are no longer relevant to its ongoing construction.

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