Storage tanks at the Trans Mountain Edmonton Terminal. Image: Joey Podlubny/JWN The federal government is using profits from the Hibernia oil project to subsidize the Trans Mountain pipeline project, which is operating at a loss, according to an analysis by the Institute for Energy Economics and Analysis (IEEFA). Or put another way, the federal government continues to finance the pipeline it owns and is expanding – as it promised to do – and it is using profits it earns from its share of the Hibernia offshore oil project to help cover some of the costs. IEEFA appears to be stretching the definition of a subsidy, which is commonly understood to be a government benefit offered to a private company or sector. But the Trans Mountain Corporation is not a private company – it is owned by the government. Kin Lo, associate professor of accounting and information systems at the University of BC’s Sauder School of Business, said the IEEFA analysis is “problematic,” especially the way it calculates indirect subsidies. The IEEFA says some $320 million in “new subsidies” is going into the Trans Mountain pipeline and expansion project. The IEEFA analysis appears to be intended to prove the federal […]
