Locator: 45350CANADA.
(Reuters) - A Canadian government agency has guaranteed fresh commercial loans of up to $2.2 billion to the controversial Trans Mountain pipeline expansion project that has suffered repeated cost overruns. [Figures in US dollars.]
The information disclosed by Export Development Canada showed that a new loan guarantee was signed in July, though it first appeared on EDC's website late on Friday.
Prime Minister Justin Trudeau's Liberal government bought the Trans Mountain pipeline in 2018 from Kinder Morgan Inc to ensure the expansion project got built and provided a $7.3 billion loan guarantee to TMC.
It is meant to unlock Asian markets for Canadian oil, which is mostly exported to the United States now. But the project has been hampered by regulatory obstacles, environmental opposition, and construction delays, and is now anticipated to cost $23 billion, more than quadrupling the $5.4 billion budgeted in 2017. [The construction delays mostly due to regulatory obstacles and environmental opposition.]
The cost blowout and the impact of taxpayer has made the government's ongoing support a contentious issue.
Last year, Finance Minister Chrystia Freeland said that no more public funds would be committed in the project, and TMC has stated that it is looking for external funding.
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