Canada Revenue Agency Tax Audit of Kinder Morgan’s Canadian Activities Called For

17 November 2014


Kinder Morgan—the US based multinational that owns and operates Trans Mountain Pipeline—purports to be a good corporate citizen paying its fair share of taxes. It relies on this claim to support its demand for a public license granting it permission to expand its pipeline transportation capacity threefold and increase oil tanker traffic in the Salish Sea and Burrard Inlet to more than two transits a day.

This project represents a significant cost to BC in terms of crowding out existing economic activity. It also represents significant environmental costs related to increased transport of diluted bitumen by land and sea. When there is a major or catastrophic spill, environmental, social, economic and cultural costs will skyrocket.

Kinder Morgan argues that the fiscal revenues it generates by constructing and operating its project will compensate Canadians for investing our assets—effectively land and water access. However, the company will not reveal to Canadians what their profits are or how much in cash taxes they actually pay.

It is entirely reasonable to ask how much Trans Mountain pays in corporate income taxes as a test against which to compare what the company is likely to pay in the future. The answer—which I found in Houston—is that Trans Mountain pays hardly anything at all—\$1.5 million a year on average over the past five years. Trans Mountain received a cash tax refund in two of them.

How could this be? I have prepared a brief that discusses the background and character of Kinder Morgan’s corporate culture and how it seems to relate to its almost non-existent tax burden in Canada. I have done my best to be accurate and forthright in the assessment but it is very difficult since Kinder Morgan will not be transparent and accountable.

Since the NEB will not address the issue as part of its public interest review, what remains is a call to the Canada Revenue Agency to conduct a full scale and comprehensive tax audit of all Kinder Morgan activities in Canada. Kinder Morgan needs to be more transparent and accountable to Canadians if the company wants permission to expand its footprint on our soil.

I have made the brief available for download.