The Price Ain't Right

Back in August of 2018 our federal government bought us a pipeline. Not exactly a bargain, it set us back $4.5-billion. The pipeline, the Trans Mountain, carries oil from Edmonton to Burnaby, B.C. The government's reason, apparently, was to reassure Albertans that it really did want to help them get more oil to market. If we owned the pipeline, we could ensure that the proposed expansion to the line would be built—at a cost of a further $7.4-billion, rather more than the previous owner's estimate of $5.4-billion. The expansion was popular at the time with 57 percent of Canadians supporting it and only 26 percent opposed.

How things change. On February 7, Trans Mountain President and CEO Ian Anderson announced that the company’s expansion project would now cost $12.6-billion. Canadians' opinions changed in a hurry. Support, which had declined only slightly now dropped below 50 percent for the first time. Opposition jumped to 45 percent. We are now close to equally divided.

British Columbians, however, are more opposed than supportive. Over 60 percent of Quebeckers and almost half of Ontarians oppose the project. Albertans, needless to say, remain overwhelmingly in support. But for most Canadians, the truth is sinking in. We just may have a white elephant on our hands.

The legal hurdles appear to have been cleared, but now we face the critical hurdle—money. Who exactly is going to lay out $12.6-billion on an investment to move more dilbit? The investment markets are in fact trending very much in the other direction. So if a buyer doesn't step up, I guess it's on us, folks.