Trans Mountain blames massive spike in project cost on natural disasters, debt costs — and frogs

The projected cost of twinning the Trans Mountain pipeline has nearly tripled because of natural disasters, environmental protection measures and rising debt payments, according to the government-owned pipeline corporation.

The latest figures show TMX's initial $7.4 billion price tag — projected when the federal government purchased the project in 2018 — has since ballooned to $21.4 billion.

The federal Department of Finance updated those figures in February during a Friday news conference — held on a day when media outlets were distracted by Ottawa police beginning to clear out an entrenched anti-vaccine mandate convoy protest on Parliament Hill.

"[The federal government has] done a horrible job of communicating how the costs are going up and [by] keeping things secret that don't need to be kept secret," said Blair King, an environmental scientist who argues that TMX is in the public interest. He writes a blog that occasionally debunks myths about the project.

In the weeks after that news conference, more details have emerged. Documents posted online — corporate plans, earnings reports and a recent project update — break down where costs have increased and when TMX expects to start earning money.

Trans Mountain has faced cost increases before. Before February, the most recent project cost estimate was $12.6 billion.

Trans Mountain blames its latest cost overruns and delays on "schedule pressures" and "productivity challenges." According to a recent project update posted online, those issues account for $4.3 billion of the new cost increases.

The thousands of permits from municipal, provincial and federal governments that TMX requires took longer than expected to obtain, the company said.

The construction area's landscape has also changed dramatically since the project began. In November, flooding hit the Hope, Coquihalla and Fraser Valley construction segments in B.C. In an amended corporate plan, Trans Mountain said that the flooding alone would add $500 million to the final price tag.

Contractors also share some of the blame, Trans Mountain said.

"Some contractors' work productivity did not perform at previously estimated levels," it said. "This can be attributed to experienced worker availability, inefficient work start-up due to permit delays, and in some cases unforeseen ground and geotechnical conditions."

Trans Mountain also may have to compensate a contractor it severed ties with after a workplace fatality. In 2020, equipment struck and killed an employee working for SA Energy. The former contractor is "entitled to reimbursement" for costs before its contract was terminated, according to a quarterly earnings report from the Canada Development Investment Corporation, the Crown corporation which owns Trans Mountain.

The need to protect culturally and environmentally sensitive areas added $2.8 billion to the project's cost, Trans Mountain said.

The company said more money is needed to add "state-of-the-art leak detection" equipment and re-route the pipeline away from an aquifer in B.C.'s Coldwater Valley. It also said its crews have gone to great lengths to protect rare species in the construction zone — removing rare moss by hand and relocating 100 anthills, 150,000 frogs and various fish, snails and snakes.