Natural Resources Committee on Nov. 4th, 2024

[Charlie Angus, NDP, Timmins—James Bay, ON]

Does that just sit up in the air?

[Greg Reade]

I don't think that's accurate.

[Charlie Angus, NDP, Timmins—James Bay, ON]

That's what the Canada Energy Regulator told us.

[Greg Reade]

I think that's a quote from someone who provided input into a CER process, if I'm not mistaken.

[Charlie Angus, NDP, Timmins—James Bay, ON]

We asked the CER, and they said that, yes, it was between $11 and $13 in subsidy per barrel at the present rate.

[Greg Reade]

The CER is—

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm just wondering, because this is a commercial business that is operating and is supposed to be getting our money back. If we're going to cover 52% of the cost of every barrel shipped, on whose books is that going to be? Is it going to be TMP Finance? Is it going to be TMC? How does this work?

[Greg Reade]

The information I have in front of me does not suggest we are covering 52% of every barrel. In fact, the net income of Trans Mountain shows to be positive in the coming years when the cash flows start. The cash flows are sufficient to pay for operating costs, to pay for financing costs and to pay down some of the debt.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Okay, that's funny, because the Canadian.... I expected that I would have been scolded by the Canada Energy Regulator for bringing false facts when I threw the number out there, and he said the numbers were accurate.

[Greg Reade]

I apologize. I can look more closely at the transcript, but what I saw was a quote from someone who inputted into the CER.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Are you saying then that the full cost is being covered by the shippers, or is the public covering it?

[Greg Reade]

To be more accurate, you need to understand that what the CER is adjudicating is a commercial agreement that is a formula on how to set tolls, so they are looking at that formula that was established prior to the government even owning the pipeline to understand whether it's still relevant. That is a market-based rate that appears competitive—

[Charlie Angus, NDP, Timmins—James Bay, ON]

It should be.

[Greg Reade]

—within the market and seems to be returning money onto the balance sheets.

[Charlie Angus, NDP, Timmins—James Bay, ON]

The Tsleil-Waututh Nation, which did an excellent report questioning the CER's decision, said:

A commercial enterprise operating on a commercial basis would not file an application that recovers less than half of the project's costs, nor would the CER approve such an application. Instead, a commercial enterprise would be applying to the CER for full recovery of project costs, and the CER would conduct a hearing on the prudence of those costs.

What we were told by the CER is that they would think a 50¢ increase was okay, but how is it that the CER approved a project that was not committed to the full recovery of costs? Who pays?

[Greg Reade]

I expect that when Trans Mountain has the chance to provide their information about the process that quote comes from, they will provide information to suggest otherwise.

[Charlie Angus, NDP, Timmins—James Bay, ON]

We've also been warned and we are concerned, as West Coast Environmental Law did an interesting report. They accused you guys of “accounting magic”—I thought that was an interesting term—and that by setting up TMP Finance, you were also setting it up so that the minister could just erase the debt—that this shell company is there to hold the debt, and you would erase the debt—and then it would become a viable operation.

Have you gamed out the scenarios for erasing the debt?

[Greg Reade]

No. No debt has been erased.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I didn't say it was erased. I asked if you have gamed out the scenarios, because that's one of the scenarios behind the reason for having a shell company hold your debt: You could just erase the shell company, and, boy oh boy, suddenly it's a viable operation.

[The Chair, Liberal, George Chahal]

Mr. Angus, your time is up. Thank you. If you want to provide a short answer, go ahead.

[Greg Reade]

No, we haven't gamed anything out.

[The Chair, Liberal, George Chahal]

All right. Thank you.

We'll now go to our next round, and we'll start with Mr. Patzer.

Mr. Patzer, you have five minutes.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much, Mr. Chair, and thank you to the officials for being here. I just want to quickly follow up with the Department of Finance on a line of questioning that my colleague Mr. Chambers had begun.

Can you confirm for this committee that the Department of Finance does not have jobs data in relation to the emissions cap that's about to be announced this afternoon?

[Greg Reade]

I don't have them in front of me, but the Department of Finance has access to the RIAS that will be tabled.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

You have them and they will be tabled with this committee. Is that correct?