Even as costs soar, Indigenous groups still aim to buy Trans Mountain pipeline

Two groups working with prospective Indigenous owners groups said despite cost increases, they're still "ready, willing and able" to pursue the project that's "still viable."

Indigenous-led groups remain committed to pursuing ownership of the Trans Mountain pipeline, even as cost overruns for the pipeline expansion project soar.

Last month, the federal Crown corporation that owns the pipeline revealed estimated construction costs of the expansion have ballooned by 70 per cent to $21.4 billion, up from an earlier estimate of $12.6 billion.

Trans Mountain Corp. also pushed back the estimated completion date of the project from sometime this year to the third quarter of 2023.

In an email Monday, Trans Mountain Corp. confirmed that due to existing contractual agreements with shippers, only 20 to 25 per cent of the increased capital costs can be passed on to oil companies in the form of increased tolls.

That means that about $7 billion in cost overruns must be absorbed by Trans Mountain itself, ultimately eroding the project’s returns.

But escalating costs aren’t deterring Indigenous-led initiatives like Nesika Services, a non-profit organization that is working to help Indigenous communities along the pipeline’s route acquire a stake in Trans Mountain.

“It means obviously the entire pie for the project is smaller,” said Nesika Services executive director Paul Poscente, in an interview. “But we’ve done some modelling based on the publicly available information, and it’s absolutely still viable.”

“We still believe that Canada can sell a portion of this pipeline to Indigenous communities on a commercial basis,” Poscente said. “We have been urging Canada to start a negotiation.”