Canada's regulator grants oil majors a $2.5 billion discount on Trans-Mountain tolls
The Canadian Energy Regulator approved a 10 percent toll cut for eight oil shippers using the Trans-Mountain pipeline, amounting to roughly $2.5 billion in public subsidies.
A recent ruling by the Canadian Energy Regulator gave seven oil companies a 10 percent reduction in tolls for the publicly owned Trans-Mountain pipeline, translating to an estimated $2.5 billion subsidy. The cut applies to firms that hold rights to 90 percent of the line’s capacity, including Imperial Oil, ConocoPhillips, Suncor and BP, and will last for the pipeline’s 20-year shipping contracts, after which new terms must be negotiated.
Because of the discount, the $40 billion spent by the government on the project will not be recouped during that period. The Tsleil-Waututh First Nation, which argued the tolls would encourage cost-cutting and raise spill risk, was barred from the hearing on the grounds of lacking a commercial interest. Critics, such as lawyer Eugene Kung, say the decision amounts to a massive public subsidy and could set a precedent for future projects like the proposed Pacific Link pipeline.
Why it matters
The deal shifts billions of public costs onto taxpayers and may influence future infrastructure financing and environmental risk management.
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