Exclusive: In one of her last moves as finance minister Freeland loaned the Trans Mountain pipeline project $20 billion
Chrystia Freeland walking away from a budget 2024-related press conference on April 16, 2024. Photo by Natasha Bulowski / Canada's National Observer
One of the last things Chrystia Freeland did as finance minister was authorize an additional $20-billion loan to the Trans Mountain pipeline project, bringing the total disclosed federal commitment to nearly $50 billion — at least for the blink of an eye.
The latest financing, described as “repayment of higher-cost TMC debt/working capital support,” was disclosed on Export Development Canada’s website on January 30, but is dated Dec. 13 2024 — the Friday before Freeland announced her resignation on Monday Dec. 16.
The guarantee appears to violate a commitment made by Freeland in 2022 that no further public money would be invested in the project after the pipeline’s cost swelled to $21.4 billion.
“I want to assure Canadians there will be no additional public funding for TMC (Trans Mountain Corporation)," Freeland told reporters at the time.
However, when the company needed more money, the federal government offered banks loan guarantees that would see the public repay the banks if Trans Mountain couldn’t. It was a strategy to infuse the Crown corporation with more cash, without directly putting it on the government’s tab.
Government officials say the $20 billion loan has been used to refinance Trans Mountain’s debt and the banks have been paid back. That cancels out $19 billion worth of loan guarantees the government would have been on the hook for if the company couldn’t make its payments, a Finance Canada official says.
The refinancing is expected to save $3.5 billion in interest payments, over six years.
Trans Mountain Corporation and Freeland did not immediately return requests for comment.
Eugene Kung, staff lawyer with West Coast Environmental Law, told Canada’s National Observer the federal government's 2022 promise to not put any more public dollars into the beleaguered project has clearly been broken.
“$20 billion is a pretty big breaking of that promise,” he said.
As previously reported by Canada’s National Observer, Finance Canada quietly helped co-ordinate multibillion-dollar loans in April 2022 by guaranteeing the government would pick up the tab should anything go wrong.
The banks behind the most recent loan include RBC, Scotiabank, TD, BMO, CIBC, National Bank, ATB Financial, and Goldman Sachs Canada, according to financial data reviewed by Canada’s National Observer.
Most of the banks did not return a request for comment Friday. ATB Financial declined to comment.
Disclosed loans and loan guarantees to Trans Mountain from the federal government range between $49.5 and $53 billion.
- December 12, 2024 — $19.75 billion to $20 billion. Described by Export Development Canada as “financing renewal/refinancing.”
- May 17, 2024 — $750 million to $1 billion. Described by Export Development Canada as a “guarantee” of financing to commercial lenders.
- November 30, 2023 — $1.75 billion to $2 billion. Described by Export Development Canada as a “guarantee” of financing to commercial lenders.
- July 20, 2023 — $2.75 billion to $3 billion. Described by Export Development Canada as a “guarantee” of financing to commercial lenders.
- May 2, 2023 — $1.75 billion to $2 billion. Described by Export Development Canada as a “guarantee” of financing to commercial lenders.
- March 24, 2023 — $750 million to $1 billion. Described by Export Development Canada as a “guarantee” of financing to commercial lenders.
- April 29, 2022 — $9.75 billion to $10 billion. Described by Export Development Canada as a “guarantee” of financing to commercial lenders.
- March 3, 2022 — $1.75 billion to $2 billion. Described by Export Development Canada as a “working capital support.”
- October 1, 2020 — $7.5 billion to $7.75 billion. Described by Export Development Canada as a “working capital support.”
- August 31, 2020 — $1 billion to $1.25 billion. Described by Export Development Canada as a “working capital support.”
- July 30, 2019 — $1 billion. Described by Export Development Canada as a “working capital support.”
- August 29, 2018 — $1 billion. Described by Export Development Canada as a “working capital support.”
- June 14, 2018 — $1 billion. Described by Export Development Canada as a “guarantee.”
John Woodside / Local Journalism Initiative / Canada’s National Observer
Updates and corrections | Corrections policy
This story has been clarified to reflect Finance Canada's account of the intended use of the loan.
January 31st 2025
Senior Ottawa Reporter
Comments
John, this is getting really difficult to track.
Any chance, in an update, you could provide some sort of understandable data graphic showing dates and loan/loan guarantees with cumulative totals?
An example of the confusing data is the $250 million allocated to each lender at the end of the article. Is that supposed to add up to $20B?
I'd really like to better understand this project and its reasons; other sources tell me that Ms. Freeland is often considered the "smartest person in the room", so there's got to be something there to support this. The opportunity cost paid by the rest of the country seems, certainly, enormous.
One more thing.
Now that the sludge is flowing, what are the tolls collected per day or week? I'm interested to see what is being collected compared to interest charges and principal amortization. I'm sure the gov't has that data immediately available to any inquiring journo. lol
Yes, well, you gotta consider who else is in the room . . . sometimes that designation doesn't mean much.
Thank you, John.
(Understand I'm not terribly finance literate)
I am left to wonder about specifics in two connected, though different, streams.
First stream: re these guarantees:
1. have any of these guarantees yet been drawn on?
2. Was the most recent loan/guarantee (with the same question applying to all that have come before), in effect, a re-financing of any of the previous loans/ guarantees? That is, is the total amount of loans/ guarantees roughly around the $43B mark, or have any more recent loans/ guarantees essentially discharged earlier commitments, thus making the total less than ~$43B?
Second stream: actual loans that were paid out to the construction companies/ contractors.
- where are things at present and what is the current financial forecast regarding the project and loans/ guarantees? That's likely what everyone but the taxpayer wants to keep hidden.
I, and likely millions of other Canadians, have been, I think, overly generous with our goodwill but surely the breaking point will come. This will presumably go down as the largest boondoggle and waste of precious financial resources, to-date, in the history of Canadian public (?) works. And, I would really like to know how much profit and largesse was taken by various players.
All that said, would I want the CPC in the captain's chair? Not a $#%#$ chance.
What a state our politics is in.
Re: largest boondoggle. I think you could be right about that. We would never expect the CPC to admit that, even when they're hammering the LPC on spending and debt.
Thinking back, the CPR was probably awarded something bigger than TMX (in today's dollars) to build a railway across the land. Our single malt-loving first prime minister didn't even have enough cash in federal accounts or credit to pay the cost, so he put huge swaths of stolen Indigenous land on the table. That's 7,000 acres in Vancouver alone. Another 2 million acres on Vancouver Island went to a coal baron named Dunsmuir who then built the E&N railway which catalyzed the stripping of Island resources and settlement.
The latter rail investments did bring a massive return (unjust as it was to Indigenous peoples and the environment). In my estmation the TMX tally in rough numbers so far is $34B in direct construction costs, ~$50B including loan guarantees.
Given the world trend toward investment in renewables, which exceeds the same in petroleum by orders of magnitude, and the very competitive prices and efficiency of solar and wind power over fossil fuels, the long term financial viability of TMX is deeply questionable.
It's very illuminating how the two leading candidates for the LPC leadership both come from finance portfolios. But Freeland's trajectory originates in the oil booms of last century, whereas Carney's is decidedly 21st Century backed by actual data on the phenomenal recent worldwide growth in investments and completed projects in renewables.
Moreover, Carney speaks continuously about a clean energy economy. I don't recall Freeland has ever referred to renewables favourably or, tellingly, bothered to look at actual financial data on the subject. That's strange for a finance minister slinging tens of billions of taxpayer's money around like throwing darts at a wall without a visible target. I wouldn't be surprised if she ended up on the board of a big foreign owned oil company if she ever retires from politics.
One last question: What century does Poilievre come from? My guess it's the 19th.
Don't forget that Carney grew up in Edmonton. His mother's maiden name and Trudeau's half-sibs' surnames are the same.
Carney thinks, though (from an interview not very long ago) that carbon capture and blue hydrogen (that's the kind made from no-longer productive wells). Maybe Guilbeaut wll be able to re-educate him ... but it's clear he's not outfitted as a Saviour, at present.
Trudeau's second mandate letter to the Minister of Finance included no more funding going to O&G. After several hundred more millions, I looked again for the archived mandate letter, and found that particular bit had been edited out.
It was pretty clear from Freeland's resignation letter, that Trudeau's been a bit of a dictator in cabinet, being essentially the author of budgets she disagreed with ... just as he interfered with the jurisdiction of the Attorney-General, when Jody Wilson-Raybould was Minister of Finance and Attorney-General.
But she's never distanced herself at all from O&G. Carney hasn't really either, though he has made it clear that at some point production will have to be drastically reduced, as he does recognize Scope 3 emissions.
The UN probably needs to come to a firm edict about who owns the Scope 3 emissions.
AB wrote: "Given the world trend toward investment in renewables, which exceeds the same in petroleum by orders of magnitude …"
Source?
Mr. Botta's frequent claim is incorrect.
Repeated failure to fact check undermine's readers' trust in the comments section.
If Mr. Botta's claim were true, it would signify only that renewables are growing faster than fossil fuels, but that fossil fuels are still growing.
As long as global energy demand exceeds the growth of renewables supply, the difference will be made up by fossil fuels and nuclear. As long as fossil fuel consumption grows, emissions will continue to rise.
To slow climate change, renewables must displace fossil fuels, not merely supplement them.
To be accurate, the IEA claims that global investments in clean energy technologies — not renewables per se — now exceeds spending on fossil fuels.
The clean energy technology category includes renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements, heat pumps, carbon capture, etc. A broad category. Not exactly an apples-to-apples comparison.
Spending on fossil fuels ("slightly more than USD 1 trillion, is going to coal, gas and oil") still exceeds investments in renewables ($US 659 billion in 2023).
"Clean energy investment is extending its lead over fossil fuels, boosted by energy security strengths" (IEA, 2023)
"Investment in clean energy technologies is significantly outpacing spending on fossil fuels as affordability and security concerns triggered by the global energy crisis strengthen the momentum behind more sustainable options.
"About USD 2.8 trillion is set to be invested globally in energy in 2023, of which more than USD 1.7 trillion is expected to go to clean technologies – including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps – according to the IEA's latest World Energy Investment report.
"The remainder, slightly more than USD 1 trillion, is going to coal, gas and oil."
criminal.. unlimited lobbying by capitalists is NOT a democracy, its an Oligarchy..
this is NOT canada...
Canada signed on the UN Environmental Sustainability Act in 1980's I believe, and since them F'n oil coal and lng has INCREASED EVERY F'N YEAR!!!!!
The real important question here is will any candidate for the PM job publicly commit to renouncing this decision?