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Legal report shows Trans Mountain pipeline construction delayed and over budget

Wednesday, September 8, 2021

Vancouver, BC, xʷməθkʷəy̓əm (Musqueam), Skwxwú7mesh (Squamish) & səl̓ilwətaʔɬ (Tsleil-Waututh) territories

A new report from West Coast Environmental Law Association that compiled and analyzed hundreds of Trans Mountain documents projects that the Trans Mountain pipeline is delayed well into 2023, with millions added to the $12.6 billion construction cost as well as hundreds of millions of dollars of lost revenue. Transparency and accountability have been longstanding issues for Trans Mountain since it became a Crown Corporation, making it impossible to know exactly how delayed or over budget the project actually is.

“It’s easy for Trans Mountain to say they are on time and on budget when they keep moving the goalposts, but the delays along the route have become so numerous and are so regular they now delay the entire project,” said Eugene Kung, staff lawyer and co-author of the report. 

The report calls for the new federal government to immediately provide an updated cost estimate for Trans Mountain, which hasn’t happened since February 2020, just before the COVID-19 pandemic.

“The International Energy Agency’s recent analysis confirms that new oil and gas infrastructure is not compatible with climate action. Given the numerous delays and rising costs related to TMX, it’s becoming increasingly difficult to justify this massive public expenditure, especially during a pandemic,” said Kung.

The report shows evidence of delay in every one of the seven construction spreads (or segments) from Edmonton to Burnaby. Delays range from two to 23 months. These include (among others): 

  • Delays up to 23 months on specific segments of the pipeline, such as reactivating a deactivated section of the pipeline in Alberta;
  • Multiple stop-work orders resulting from violating laws enacted to protect wildlife and habitat;
  • An 18-month delay in horizontal directional drilling (HDD) under the Fraser River, as well as delays related to the Burnaby Mountain tunnel;
  • Delays ranging from 12 to 17 months in segments between Chilliwack and Kamloops;
  • A two-month shutdown related to health and safety, and “systemic non-compliance” with COVID-19 protocols; and
  • Delays related to BC forest fires in the construction zones, including a recent evacuation order at the Coquihalla Summit. 

The cost of delays are quantified by applying sworn affidavit statements from Trans Mountain executives, who state: “Each month of delay to the Project in-service date results in lost earnings of approximately 100 million dollars and millions of dollars in excess capital costs.”

The Crown corporation continues to insist that the project, funded by public dollars, is “on budget and on schedule” in spite of numerous delays and setbacks laid out in the report. 

In order to move ahead with construction, Trans Mountain has regularly asked the Canadian Energy Regulator (CER) to weaken project conditions, which were put in place by the CER to address concerns raised in the review process. Many of the conditions, which are already weak, concern the safety and protection of the surrounding ecosystems and species. The CER has rejected only one of more than 70 requests for condition ‘relief.’ 

“The only way the pipeline is getting built, and only a fraction has been built, is by skirting local and national laws,” said Kung. 

For example, after a failed attempt at drilling under the Thompson River, Trans Mountain was  forced to re-route but ignored the legal requirement to gain pre-approval for route alterations. Instead, they asked for (and received) relief from the CER for their violation of this requirement, six months after completing the alteration.

“Canadian taxpayers have a right to transparent, up-to-date information about Trans Mountain construction – including all of the delays, increased costs and breached regulations,” said Kung. “It is time for Trans Mountain to put the cards on the table and let the public see the true costs of this controversial and economically questionable pipeline and tanker project.”

The full report is available online at: https://wcel.org/TMXdelays   

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For further comment, contact:

Eugene Kung, Staff Lawyer, West Coast Environmental Law Association
604-601-2514, ekung@wcel.org