Study predicts Trans Mountain pipeline buy will add to federal deficit

CALGARY — A study by a sustainable energy research group predicts the federal government’s purchase of the Trans Mountain pipeline will add significantly to the deficit next year.

The study by the Institute for Energy Economics and Financial Analysis says the buying the Kinder Morgan Canada assets, plus planning and construction costs, will put $6.5 billion in unplanned spending on the books for the 2018-19 fiscal year.

Study authors Tom Sanzillo and Kathy Hipple say that until the Ottawa clarifies how it plans to account for the spending, there’s a risk the purchase could add 36 per cent to the projected $18.1-billion deficit.

The federal government agreed to buy the existing pipeline, expansion project and terminals from Kinder Morgan Canada for $4.5 billion after the company threatened to walk away from the Trans Mountain expansion project.

The government has said it doesn’t plan to be a long-term owner and is looking for buyers, including Indigenous communities, pension funds and the Alberta government.

The Trans Mountain expansion project has faced significant opposition over concerns of oil spills, tanker traffic and increased oilsands production.

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