Prime Minister Mark Carney delivers remarks at a Canada Day ceremony in Ottawa on Wednesday.Justin Tang/The Canadian Press
Mark Carney’s wave of summer spending Thursday included numerous billion-dollar references to new projects in British Columbia and Alberta, but economists are questioning the lack of detail as to where the money will come from.
In his typical rhetorical style, the Prime Minister made several references to “catalytic” investments that will attract more than $200-billion in private capital.
He made a number of federal financing announcements earlier in the day in Vancouver alongside B.C. Premier David Eby and then flew to Calgary, where he and Alberta Premier Danielle Smith announced plans for a proposed southern route for a new oil pipeline to the West Coast, led by the federally owned Trans Mountain Corp.
Alberta proposes southern route for new West Coast pipeline
As is increasingly the case with major federal announcements, the background documents provided by officials lack important details.
No information was released that explains how much Ottawa plans to spend each year on the various projects, nor how much would be direct spending versus loans. Nor was an update provided as to what the flurry of announcements would mean for the size of Ottawa’s deficit and debt.
Those details will presumably have to wait until the release of the government’s fall budget.
“I’ve been involved with budgets in one way or another since 1977 and I’ve never seen such a lack of transparency,” said Don Drummond, a professor at Queen’s University’s School of Policy Studies.
The former senior finance official is a co-author of the C.D. Howe Institute’s annual shadow budget, where a team of economists attempt to estimate the size of the federal deficit before the budget is announced based on spending announcements made throughout the year.
“We’re trying to generate a ‘status quo’ fiscal update, and we do not know what to do,” he said. “Are these loans? Are they loan guarantees? Are they actual capital purchases, which under accrual accounting we just record as amortization? The answer to all of the above is: ‘I don’t know.’”
Alberta Premier Danielle Smith has pitched a new bitumen pipeline to the B.C. coast, just hours after Prime Minister Mark Carney announced a deal with B.C. to make it possible. Smith and Carney stood together in Calgary to announce that Alberta has formally submitted a proposed route to the federal Major Projects Office.
The Canadian Press
The federal government did not release a cost estimate for the pipeline. However, the Alberta government’s submission to the federal Major Projects Office said it could cost between $35.2-billion and $43.7-billion. It points out that in today’s dollars, the Trans Mountain Expansion Project, which was completed in 2024, cost about $35.3-billion.
The provincial report said the proposed West Coast Oil Pipeline is “a much bigger project” than the Trans Mountain expansion because it includes a longer and wider pipeline that will carry a much higher volume of oil.
Workers position pipe during construction of the Trans Mountain pipeline expansion in Abbotsford, B.C., in May, 2023.DARRYL DYCK/The Canadian Press
With respect to the package of announcements for B.C., the Prime Minister’s Office did release some high-level figures. Mr. Eby said the announcements add up to about $20-billion in federal funding for his province but didn’t say over how many years.
Mr. Carney said in his Vancouver news conference that Ottawa would support $10-billion in major infrastructure upgrades to expand capacity at the Roberts Bank port terminal. The Alberta submission says that is where oil from the new proposed pipeline would be loaded onto tankers for export to primarily Asian markets.
Thursday’s federal news release tied to the B.C. announcements pledged $3.9-billion “through various tools” toward a North Coast Transmission Line project. It also committed to supporting one-third of capital costs, up to a maximum of $3-billion, toward the George Massey Tunnel Replacement Project under the Fraser River. Other pledges included $500-million to expand the Red Chris Mine and $630-million for child care in B.C.
Kevin Krausert: Why the proposal for a major new pipeline should be a cause for celebration
Tyler Meredith, a former fiscal policy adviser to the Liberal government under prime minister Justin Trudeau who has worked on budgets and Liberal platform documents, said it is too early for the government to release spending details related to the pipeline.
He said the original TMX expansion turned out to be a “very wise” investment even though it cost much more than originally expected. He pointed out in a statement that it is an asset on the government’s books that is now generating dividends.
He said it would be more appropriate for the government to wait until the project is approved before releasing detailed cost estimates.
The Globe asked the Prime Minister’s Office, the Finance Department and the Infrastructure Minister’s office for more information about the announcements.
An emailed response was provided late Friday by Privy Council Office spokesperson Pierre Cuguen.
“Details of these announcements will be reflected in financial reporting in due course,” he said.
Jimmy Jean, chief economist with Desjardins Group, said he understands that some of the lack of detail around the pipeline is due to the fact that the financing structure is still being negotiated.
Mr. Jean said in an e-mail that the government may be planning on drawing from existing funds like the Canada Infrastructure Bank or the Canada Strong Fund for some of these projects, but such information was not provided.
“It’s very difficult to figure out what was pre-committed or not,” he said.