The cost of building the Trans Mountain pipeline expansion has nearly doubled and the timeline for completing the taxpayer-owned project has been extended to next year, prompting the government to say it’s cutting off funding for the project.

In a release Friday afternoon, Trans Mountain Corp. said the estimated total cost of building the expansion has climbed to $21.4 billion from the previous estimate of $12.6 billion.

Completion of the project is now expected in the third quarter of 2023. It had been expected to be wrapped up later this year.

Deputy Prime Minister and Finance Minister Chrystia Freeland said in a release that the government is not going to put any additional public money toward the project. Instead, BMO Capital Markets and TD Securities have been retained to advise on financing options. 

The federal government also reiterated that it plans to divest Trans Mountain and that it’s looking for economic participation with Indigenous groups.

“[BMO and TD] have also confirmed that, despite the increased cost estimate and completion timeline, the project remains commercially viable,” reads the government’s release.

However, there were some alarm bells Friday about the numbers that now face any prospective buyer.

Richard Masson, executive fellow at the University of Calgary School of Public Policy and a veteran of the oil sands, said he thinks the eventual divestment process just became far more complicated for the government.

“Some of these costs flow through to the shippers through higher tolls. A lot of them don't. And so it's going to lower the overall economic value of this and mean less money as we try and sell it as taxpayers to some private sector entity later on. So it's not good news at all,” he said.

Trans Mountain noted in its release that the pandemic and last November’s flooding in B.C. have complicated the construction process and accounted for $1.4 billion in additional costs. 

The most significant contributor to the project’s ballooning price tag is $2.6 billion attributed to “schedule pressures,” which Trans Mountain said includes permitting as well as challenging marine and terrain conditions. 

“The progress we have made over the past two years is remarkable when you consider the unforeseen challenges we have faced including the global pandemic, wildfires, and flooding,” said Trans Mountain President and Chief Executive Officer Ian Anderson in the release.

It was also announced on Friday that Anderson is retiring from his duties and will leave Trans Mountain’s board of directors at the start of April. Trans Mountain said in a release that its board will launch an “immediate process” to identify Anderson’s successor.

The federal government stepped in to buy Trans Mountain in mid-2018 after the project’s original proponent, Kinder Morgan Inc., threw in the towel amid frustration over the regulatory process.

“Notwithstanding the cost increase and revised completion schedule, the business case supporting the project remains sound,” Trans Mountain said in the release Friday.

Committed Trans Mountain expansion shippers Cenovus Energy Inc. and Suncor Energy Inc. said on Friday they continue to stand by the project. 

“While like everyone we are disappointed in the increased costs and schedule of the Trans Mountain project, we remain fully supportive of this world-class infrastructure project which is vital to Canada’s long-term economic success and energy security,” said Suncor President and Chief Executive Mark Little in a statement. 

The expansion is a twinning of the existing Trans Mountain pipeline, which runs from Strathcona County, Alta. to Burnaby, B.C. and will nearly triple the system’s capacity to 890,000 barrels per day.