Canada guarantees additional loan of $1 billion to Transmountain

Chamber of Shipping > Blog > News > Government > Canada guarantees additional loan of $1 billion to Transmountain

The Canadian government has extended another C$1 billion ($731 million) in commercial loans for the Trans Mountain pipeline expansion, bringing the total government-backed loan facility to C$19 billion. This expansion project, costing C$34 billion, aims to nearly triple the capacity for shipping oil from Alberta to Canada’s Pacific coast. Despite the benefits of expanded access to overseas markets for Canada’s oil industry, critics raise concerns about the project’s cost to taxpayers and environmental impact. While the government announced in 2022 that it would no longer finance the project with public money, it provided a loan guarantee to Trans Mountain Corp (TMC), enabling the corporation to secure a C$10 billion credit agreement with commercial lenders. Recently, the credit available to TMC increased to C$19 billion, with an extended maturity date to August 2026. However, interest expenses surged by 431% in the first quarter of 2024, primarily due to higher interest rates on the syndicated facility, which raises financial concerns for TMC.

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