In her budget speech to the House of Commons on Tuesday, Finance Minister Chrystia Freeland took a moment to celebrate the finishing touch on expansion of the Trans Mountain oil pipeline.

The controversial project has been plagued by delays and massive cost overruns, but Freeland instead focused on its completion, highlighting the: “talented tradespeople and the brilliant engineers who, last Thursday, made the final weld, known as the golden weld, on a great national project.”

For all the difficulties with developing and building TMX, Freeland still faces another major hurdle that is sure to prove contentious — choosing when to sell it, who gets to buy it, and for how much.

An upcoming election and more than $34 billion in construction costs are raising the stakes.

Ottawa bought the project when it was on the verge of falling apart — before there was ever a shovel in the ground — in the face of legal, political and regulatory challenges. 

The federal government has long vowed to sell the project (including at least a partial ownership stake to Indigenous groups) once construction was complete. That milestone has now been reached.

But the move will no doubt open a Pandora’s box, says Daniel Béland, the director of the McGill University Institute for the Study of Canada and a professor in the department of political science.

He says any potential deal will face intense scrutiny considering the election is due before the fall of 2025 and, most notably, because the actual sale price is expected to be far lower than the cost to actually build the pipeline. 

“They were in a hot spot when they bought it back in 2018. They are still in a hot spot,” said Béland.

How the governing Liberals handle Trans Mountain could impact how voters view the Liberal party’s handling of financial, economic, Indigenous, and environmental issues. 

“There’s risk either way. If you sell it really fast, but you sell it at the price that is considered to be quite low, then you might be accused of just getting rid of it for political reasons but not having the interest of taxpayers in mind,” he said.

“But, if you wait and you don’t sell it, then you might be accused of being basically permanently involved or trying to be permanently involved in that sector of the economy in a way that many people, even people who are more conservative, may find inappropriate.”

Deep discount

There has always been interest in buying it, including from Stephen Mason, the managing director of Project Reconciliation, a Calgary-based organization which aims to use a potential ownership stake to benefit Indigenous communities.

Nearly five years ago, Mason walked into then-federal finance minister Bill Morneau’s office in Ottawa and made an offer to purchase Trans Mountain before construction had even begun on its expansion, which will transport more oil from Alberta to the British Columbia coast.

Morneau was interested, he says, but the project wasn’t for sale until the new pipeline was built.

Much has changed since that meeting in July 2019, including the ballooning cost of Trans Mountain to more than $34 billion (compared to an original estimate of about $7.3 billion) and numerous delays in construction.

Mason is still pursuing ownership. He won’t discuss numbers, but suspects Trans Mountain is worth far less than $34 billion.

“My intuition is telling me that it’s going to be a fairly significant writedown,” he said. “I’m not sure the Liberal government wants to get into a public recognition of what the writedown is ahead of the election, but that is just … my speculation.” 

New tolls

A critical factor in the timing and price of a potential sale is a dispute over how much oil companies will have to pay to actually use the new pipeline.

Several large oil producers signed long-term contracts to use 80 per cent of the pipeline. However, as construction costs have soared, so too have the tolls that companies will have to pay.

Those companies have balked at the higher rates arguing they shouldn’t have to bear the “extreme magnitude” of construction overruns. The Canada Energy Regulator has scheduled a hearing for September, at the earliest, to resolve the issue.

For now, the regulator has set an interim toll of $11.46 for every barrel of oil moved down the line. That price includes a fixed amount of $10.88 and a variable portion of $0.58. The fixed amount is nearly double what Trans Mountain estimated it would be in 2017.

“There’s no way that you can have tolls high enough on TMX to cover a $34 billion budget,” said Rory Johnston, an energy researcher and founder of the Commodity Context newsletter, who describes the cost overruns on the project compared to the original estimates as “gigantic.”

WATCH | The climbing costs of TMX: 

A post-construction review of costs should be done on TMX

28 days ago

Duration 3:28

Lessons could be learned on how the Trans Mountain expansion pipeline was developed and built, says company CFO Mark Maki.

He doesn’t expect the final tolls to be much higher than the interim amount because, otherwise, the pipeline could become too expensive for oil companies to want to use. Based on the interim tolls, Johnston expects the federal government to likely only recover about half of the money it spent to buy and build Trans Mountain.

“There’s no way anyone would pay the full cost of the pipeline because the tolls don’t support it. You’re going to need to discount it. You’re going to need to take a haircut of at least 50 per cent of this pipeline,” he said.

The federal government currently owns the original Trans Mountain pipeline, built in 1953, the now-completed expansion and related facilities including storage tanks and an export terminal.

Potential buyers

The federal government has looked at offering an equity stake to the more than 120 Western Canadian Indigenous communities whose lands are located along the pipeline route, while finding a different buyer to be the majority owner.

Besides Project Reconciliation, other potential buyers include a partnership between the Western Indigenous Pipeline Group (WIPG) and Pembina Pipelines. 

The group has the support from about 40 Indigenous communities and hopes to purchase the project within the next year, said Michael Lebourdais, an WIPG director and chief of Whispering Pines/Clinton Indian Band, located near Kamloops, B.C.

Those communities have to live with the environmental risk of a spill, so they should benefit financially from the pipeline, he says. 

Pension funds and other institutions could pursue ownership too.

“There will be buyers. I’m not sure that they’ll be willing to pay the full cost of construction but I think there’ll be buyers for sure,” said Jackie Forrest, executive director of the ARC Energy Research Institute.

The federal government will likely highlight the overall economic benefits of the new pipeline and the expected role of Indigenous communities in ownership, experts say,  as a way to defend against criticism if the eventual sale price is low. 

In her Tuesday speech, Freeland was already promoting the pipeline’s expected financial boost by highlighting the Bank of Canada’s recent estimate that the new Trans Mountain expansion will add one-quarter of a percentage point to Canada’s GDP in the second quarter. 

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An interprovincial investigation into an “emergency grandparents scam” that targeted seniors across Canada has led to the arrest of 14 suspects, Ontario Provincial Police say.

Details of the investigation, dubbed Project Sharp, were announced at a news conference in Scarborough on Thursday morning.

Police said 56 charges have been laid against the suspects, who were all arrested in the Montreal area.

According to police, since January, investigators identified 126 victims who were defrauded out of a total of $739,000. Fifteen of those victims were defrauded on multiple occasions, police said, resulting in the loss of an additional $200,000.

The victims, who range in age from 46 to 95, were targeted based on the fact that they had landline telephones, police said. While people across the country were defrauded, police said, the majority resided in Ontario.

Police said four of the 14 arrested in the fraud remain in custody while the other 10 have been released on bail. The charges they face include involvement in organized crime groups, extortion, impersonating a police officer, and fraud, police said.

OPP Det.-Insp. Sean Chatland told reporters Thursday that the police service began looking into an “organized crime group” believed to be involved in fraud during an intelligence probe in September 2022.

By February 2023, Chatland said the probe was formalized into an OPP-led joint forces investigation involving police services in both Ontario and Quebec.

“This organized crime group demonstrated a deliberate and methodical approach in exploiting victims. They operated out of Ontario and Quebec, utilizing emergency grandparents scams on victims across Canada,” Chatland said.

“They would impersonate police officers, judges, lawyers, and loved ones, preying on grandparents who believed they were trying to help family members in trouble.”

He said in many cases, the suspects utilized “money mules” or couriers to collect large sums of money from the victims.

This is a breaking news story. More details to come.

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Parti Québécois (PQ) Leader Paul St-Pierre Plamondon isn’t shying away from criticism that comments he made referencing Canada’s colonial past were an inappropriate way to push his party’s sovereignty agenda.

“We need to be considering the whole history of Canada in interpreting what’s happening,” he told CJAD 800’s Aaron Rand.

This comes just days after St-Pierre Plamondon assured that Quebecers “will definitely be living through a third referendum” on sovereignty before the end of the decade if his party is elected.

His reasoning: the federal government poses an “existential threat” to Quebecers.

“What will become of us as Quebecers if we don’t even have a fifth of the votes in a government that decides for us? We’re finished. Canada has a bleak future in store for us,” he told party members at a two-day national council on housing. “It’s a regime that only wants to crush those who refuse to assimilate.”

In speaking with Rand on Wednesday about backlash to his comments, St-Pierre Plamondon pointed out, “I’m not always soft-spoken but I always try to be as thoughtful as possible.”

Nevertheless, he doubled down on his argument, saying the federal government was “disrespecting” the provinces when it comes to issues like immigration.

“That doesn’t give us any hopes of integration, and housing, and of providing services for these people under the federal power of immigration,” he said.

Plamondon stated that there are currently 560,000 temporary immigrants in Quebec, and if the federal government continues on this path, “there is no viable future for Quebec.”

LISTEN ON CJAD 800 RADIO: PQ leader accuses Canada of ‘disrespecting the competencies of provinces’

He also refused to apologize for referencing Canada’s history, saying the country shouldn’t shy away from its past.

“Talking about history is not being radical even though the [Quebec Liberal Party] PLQ or Éric Duhaime tries to distort what I said to make me a radical politician,” he said. “I don’t think people will buy that because I’ve been constant for the past years, and talking about history shouldn’t be radical in my view.”

He points out that his criticisms aren’t specifically aimed at Prime Minister Justin Trudeau or his Liberal Party but at the federal government in general.

“He’s continuing the mission of his father. He has the exact same approach toward Quebec, and that’s fair to do,” St-Pierre Plamondon said. “If we live in a world where the past never happened, it’s difficult to have an appropriate reading of what’s actually happening right now if we have no notion of what happened before.”

He says his beliefs will not change no matter who is in power.

The next federal election is slated to take place on or before Oct. 20, 2025.

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