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Canada’s six biggest banks have increased financing for the Trans Mountain pipeline expansion (TMX) by $3 billion to help cover the project's soaring cost overruns.

TD, RBC, CIBC, BMO, the National Bank of Canada and Scotiabank are listed as lenders for the new financing, according to information environmental non-profit sourced from a Bloomberg Terminal on May 15.

“This is information that should really have been published by Finance Canada because [Trans Mountain] is a Crown corporation, or by the Canadian banks if they were actually proud of this financing,” Richard Brooks,'s climate finance director, told Canada’s National Observer in a phone interview on May 16.

“They clearly are not because they want to bury it as deep as the pipeline is getting buried.”

Notably, only Canadian banks are stepping up to finance TMX, whose construction costs cracked the $30-billion threshold earlier this year, said Brooks. “I think that speaks a lot about how financial institutions around the world view the tarsands and projects related to it.”

The pipeline expansion has faced staunch opposition from environmentalists and some Indigenous communities, seen insurers drop like flies in recent years and experienced lengthy construction delays as well as ongoing cost increases from the original $5.4-billion estimate.

RBC declined to comment on the new financing. The other five banks did not respond to requests for comment by publication time.

Finance Canada also did not respond to a request for comment by deadline. The department has a well-documented history of not answering basic questions related to Trans Mountain’s finances, including a $10-billion taxpayer-backed loan guarantee the federal government approved last year. Finance Canada regularly cites financial reports produced by TD Securities and BMO Capital Markets as proof that TMX is still commercially viable despite ballooning construction costs but won’t share the details with the public. Those reports are based on the assumption the pipeline will operate for 100 years, which the Parliamentary Budget Officer has deemed unrealistic, Canada’s National Observer uncovered last June.

From 2024 to 2043, Trans Mountain is expected to contribute $2.8 billion to federal, provincial and local governments through taxes, according to an Ernst & Young report dated March 2023 and commissioned by Trans Mountain. This report also claims TMX will contribute $26.3 billion in GDP from 2018 to 2023, which is less than its estimated $30.9-billion construction cost.

Trans Mountain will have to repay the banks, with interest, and experts warn it is unlikely the company will be able to repay banks based on the project’s construction costs, tolls and international oil markets. #TMX

Although the information published by reveals which banks are involved in the $3 billion in new financing, the Bloomberg Terminal doesn't reveal how much each individual bank has contributed. It was the same story last year, and it is still unclear which banks are contributing the most.

When Finance Canada was pressed for details about the $10-billion loan guarantee last year by environmental groups and media, the response was crickets. The fact that “nobody wanted to talk about this loan” speaks volumes about this “national embarrassment” of a project, said Brooks. “It doesn't look good for our Canadian banks to be the only banks in the world that are willing to fund this project.”

Last year, RBC was the world’s largest funder of fossil fuel projects, with US$42.1 billion in financing to coal, oil and gas companies. RBC, Scotiabank, TD, BMO and CIBC have funnelled about $1.1 trillion to fossil fuel companies since the Paris Agreement was signed seven years ago. Last year, they provided more than 90 per cent of the funding received by oilsands companies. At the same time, foreign banks are divesting from the oilsands.

Canada’s federal government has set a target to reduce greenhouse gas emissions 40 to 45 per cent below 2005 levels by the end of the decade. In order to achieve this, private banks, including those propping up TMX, need to align their financing with Canada’s climate goals, said Brooks. As wildfires rage in Alberta and Saskatchewan, these banks could have withheld further financing to show they can take action on climate, but “unfortunately that was not the case,” he added.

Trans Mountain’s finances are murky at best and deliberately opaque at worst, according to an analysis published last October by West Coast Environmental Law. Thanks to strategies such as withholding information from the public and using a confusing corporate structure and certain accounting structures, it found, there is still a lot about TMX that the public does not know.

Brooks says Canadians need to know what's going to happen when the project announces further cost overruns and how the government will deal with it.

“What happens if it leaks? What's the debt burden on Canadians when this project gets offloaded?” he asked. “Right now, the running total cost is over $30 billion. And even the company itself says that they doubt that the government will be able to recoup the costs upon sale of the project, which is the long-term intention of the government.”

Because TMX is owned by a Crown corporation, it is “in essence our money that is being put into this project, both through government funding and also backstopping or guaranteeing these loans that are being issued by private banks to Trans Mountain company,” said Brooks.

The aforementioned West Coast Environmental Law analysis estimates taxpayers will eat $17 billion of the project’s debt. That analysis was published before the $30.9-billion construction estimate in March and the brand-new revelation that financial institutions are bankrolling another $3 billion. While Finance Minister Chrystia Freeland has not broken a promise that no more public dollars will flow to TMX, which she made shortly before the $10-billion loan guarantee came to light, there is no doubt the guarantee puts taxpayer dollars at risk.

Finance Canada did not confirm whether it will also be guaranteeing the additional $3 billion uncovered by

Bankers are supposed to be good with figures and numbers, yet it's “so very clear that there's no good financial case for this,” said Brooks.

“This is an artificially propped-up project that has really been more about getting votes and appeasing oil and gas companies than it has anything to do with what's in the public's interest.”

Trans Mountain will have to repay the banks, with interest, and experts warn it is unlikely the company will be able to repay banks based on the project’s construction costs, tolls and international oil markets.

Originally, interest on the $10-billion loan was only 1.85 per cent — far below the prime interest rate. Canada Development Investment Corporation’s annual 2022 report indicates the new revolving credit facility bears interest “at the Canadian Prime rate.” Essentially, the $10-billion loan was amended, extended, increased to $13 billion and is now at the prime interest rate, explained Eugene Kung, a staff lawyer at West Coast Environmental Law.

Trans Mountain says TMX will be completed by the end of the year and begin operating in 2024.

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer

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What a money pit and the worst mistake the banks can make shoving more money into something that likely won't pay off in the long run. The money ($30B+) would have been better spent on green energy initiatives, healthcare and education.

The worst part, when the debt tanks, Canadians will be left footing a bill for a complete failure.

Whatever happened to accountability of when a quote/estimate is provided, the supplier must honor that 100% and not go oops, we under estimated this and reach out for more money. If I did that in my business constantly, I'd be out of business for careless estimates. The overrun on costs with Trans Mountain is criminal and the contractors should be held accountable, not Canadian tax payers.

I'm confused as to where anyone who's been watching government-related energy (or other) infrastructure projects could get the idea that they don't *always* suffer cost over-runs ... not to mention not meeting completion dates ... and that government doesn't *always* just shrug and approve the next tranche and extension of completion dates.
Who do you think, ultimately, is paying for all the CIRG interventions, as well???
My guess is they don't enforce the various environmental conditions or impose meaningfl fines, because that, too, will be added to the cost over-runs ... with taxpayers left holding the bag, as well as dealing with all the negative environmental repercussions.
As for "Bankers are supposed to be good with figures and numbers ..." there's nothing more secure than a government-backed loan. There is no possibility of losing that game. The problem isn't with the banks' logic: it's with the logic of govenment. It was clear from the very beginning that the project was a loser, in every sense: environmental damage, climate damage, financial damage to Canadian taxpayers ...
It bears repetition that the original owner of the project and the old pipeline had to get out, because they were facing a shareholders' meeting at which they'd be accountable.
On top of that, we plugged in a few bonuses for their CEOs.
They assumed they could play fast and loose with the northern rubes ... the proof of the pudding is in the eating.
Nobody's going to buy the pipeline ... probably at any cost, let alone at the cost of the project.

If the likes of Paul Kershaw want to consider what the "future generations" will be saddled with ... he need look no further than gas and oil. The illogical and unsupportable positions he rants about have already been given far too much space in NO's pages.

Which generation does he think, pray tell, paid for WW2???

Kinder Morgan bailed on this project due to rising costs, then the fed's stepped in to purchase the business as a 'project of national interest'. Costs have mushroomed for various reasons. The fact remains that providing additional export capacity for oil has positive benefits for federal tax revenue. Revenue that can then be used to, for example, fund battery plants in Ontario or $10 dollar a day childcare across the country.

This additional revenue will be needed to fight more forest fires, to relocate infrastructure from more flooding and rising sea level, and to help those in other countries unable to deal with the consequences of climate change that we are causing.

Indeed. And that bill will be stratospheric if the feds, provinces, cities and all Canadians don't get their act together on climate action, which must now be twinned with adaptation measures.

Perhaps. But that has little to do with TMX. Oil consumption around the world doesn't automatically increase because of TMX. There are plenty of other suppliers. The best way to reduce carbon emissions is taxing it, and using trade mechanism to discourage use. Stopping a pipeline does none of those things.

Amen. Not to mention that there was never any need for more pipeline capacity in the first place, given that what there was/is hasn't come close to being fully utilized in the past decade, as Mr. Huntley himself has demonstrated over the past few years.

As far as I can tell, the revenue to the company from transporting the tar plus the revenue it pays in tax are unlikely to add up to the amount of money the government paid to buy the thing plus the amount of money it will have to pay to Canadian banks when it turns out the pipeline is a massive money loser. Bottom line, this thing is losing money--the amount would just seem less massive if you add tax revenue. For that matter, the corporation itself won't be paying ANY taxes because it won't be making any profits.

Now, just the bare fact that the thing is being built and that employs some workers, requires materials and so on contributes to GDP. But so would anything the government did; same goes for tax money improving the apparent financial picture. If they'd taken that same money and made a crown corporation building solar panels or electric delivery vans, they'd at least have gotten something useful out of it and might even have not lost billions of dollars.

On top of that, there are never going to be the same amount of workers required as were needed before the layoffs started, and that's largely due to automation. I've seen no hard numbers that would carve off the effect of those employment reducing measures, compared to the effects of global oil pricing.
But since they started happening when oil prices were flying high, there's no reason to assume that the layoffs had much, if anything, to do with markets other than the labor market.
I'm unclear as to where anyone thinks there's going to be tax revenue generated, given that it won't come from the oil cos, the pipeline co, or any significant increase in employment.

The "revenue from this pipeline paying for programs and renewables" is Liberal talking point hogwash. It doesn't stand up to basic project and debt management arithmetic where the creditors will grab everything before revenue, if any, trickles down to the ordinary plebes below.

Overseas buyers who will supposedly agree to pay a premium for an inferior product with transoceanic shipping costs tacked on top have never and never will materialize. They're not stupid. When it does move, the raw product will continue on its merry way in part through the Sumas BC branch to Bellingham Wa. to be refined by American companies employing thousands of American workers. The seagoing tankers will turn left at the mouth of the Strait if Juan de Fuca and head south to the heavy oil refineries at Newport Beach and earn the same old US "discount" (read: fair price for low quality) that Albertans love to hate. That is, after the tankers have first wound their way through a contorted 250 km marine route to the open Pacific and put the Salish Sea marine economy and ecosystems at risk.

The project now stands at ~$34,000,000,000 BEFORE interest, inflation, depreciation, unforeseen circumstances, etc. etc. That kinda money would have built out the transit systems of Canada's 10 largest cities with a measurable return on the investment in the form of efficient urbanism and a big chunk of the operating costs covered with farebox revenue. It could also build enough solar and wind power capacity to power several major cities, or tens of thousands of units of affordable rental housing with change left over to put on the national debt.

The evolution of this project could lead Canadians to conclude the decision making, planning and management processes around TMX was done by illiterate idiots.

Rubbish, we can then all drive our electric cars down the to road to hell after this boondoggle decision by the liberal party and the dust settles on the final costs, not only financial but environmental. "Trans Mountain says TMX will be completed by the end of the year and begin operating in 2024." Don't count your chickens before they hatch Trans Mountain. Our Canadian banks must be smacking their lips and wringing their hands at this sleight of hand to gain billions with no risk. Greed comes from the Old English grædig, or "voracious," which means "always hungry for more."

The magical thinkers behind TMX look forward to a theoretical 100 years of revenue from selling expensive-to-process heavy oil. This is in the context of widely available information from many reputable sources, like the IEA and opinion leaders who habitually practice due diligence on basic economics and science and who regularly publish their peer-reviewed work in respected journals. Fossil fuels are being outcompeted today by renewables, even before TMX has been completed. And it's happening incredibly quickly.

The irrefutable laws of physics now demand action to reduce carbon emissions -- or else. The rules of basic economics have now kicked in and are responding with cheap renewable power currently (pun intended) complemented by affordable, advanced, energy dense and high-range batteries perfectly suitable for both transportation and massive, grid-scale electricity storage.

Now China recently started to export its high quality electric vehicles at often 5-figures below the list price of non-Chinese EVs of equal quality. They may bring price parity to EVs under Joe Biden's IRA and Canadian subsidies, in other words, lots of choice among consumers. These EVs meet the high auto safety standards of the EU. Some are coming on stream with the latest non-cobalt / nickel battery tech. The collective Western, Japanese and Korean auto industry is being outcompeted, and it's probable that the most indebted of them (Toyota, Honda, Ford, possibly VW) will go under. Toyota actively campaigned against EVs and is sticking with unachievable hydrogen and futuristic solid state battery research -- and stubbornly defending its intent to continue making a vast array of gasoline models way beyond 2030 -- and will no doubt pay a very dear price.

And TMX along with the Alberta oil industry need gasoline and diesel burners to survive. Oh my, it's going to be a long fall.

Land transportation and buildings are now being electrified with growing momentum catalyzed by ever more affordable prices on renewables, backed by legacy hydro. The latest batteries eliminate all concerns about intermittency and range and battery packs of 400 MW and 1,000+ MW are in the works in Scotland (offshore wind) and Western Australia (onshore wind + solar) respectively. Gas, oil and coal today -- not next year or next decade -- are now a dead end energy source and investment strategy. The writing appeared on the wall a few years ago, now it's burning into the stone with a bright glow.

There seems to be a whopping economic / energy disruption in the works, a revolution that could well be underway or even completed before the end of the decade. There will likely be many casualties among the ranks of Big Oil, Big Car, Big Banks, provincial and federal government budgets, what have you.

They can't say they weren't warned. And the public should not let them get away with playing them for fools.

And this is just one of the reasons that I won't deal with ANY bank any longer.

Got out of all of them, moved to a credit union, decades ago.

Don't know of a single bank that's remotely concerned with ethics.

Let's face it, taxpayers are on the hook for almost everything related to fossil fuels, banks and few other business interests.
Go back to 1957 and the great pipeline debate about the Fed's under PM Louis St Laurent who just guaranteed the loans made to the private sector to build the oil pipeline to Ontario which essentially made Alberta fossil fuels available to Ontario, Alberta rich, and lost them the 57 election to Dief the Chief. No money, just a guarantee. Premier Smith in Alberta is already proposed using public funds directly to relieve BIG OIL of their legal and financial obligations to clean up. And there is a 200 to 300 billion liability by BIG OIL which we taxpayers will have to pick up or let Alberta go bankrupt.
Then there is all the decisions made by every level of government to protect BIG PHARMA, and most other industries market by letting we taxpayers pay more for drugs! For what, promised research! But again we are in now a transition in energy and either we give direct subsidies to get business or be left out of the investment. Capitalism has become a predator on the taxpayers.