The Canada Energy Regulator has approved a settlement between Trans Mountain Corp. and companies that pay to ship their oil through the Alberta-to-British Columbia pipeline.

A commission of the regulator found the agreed-to tolls were “just and reasonable.”

The decision allows Trans Mountain to contract up to 90 per cent of the pipeline’s capacity to shippers, an increase from 80 per cent.

Trans Mountain announced the settlement in July following 18 months of negotiations with its shippers, including Cenovus Energy, Canadian Natural Resources, and ConocoPhillips Canada.

The federal Crown corporation operates the 1,180-kilometre pipeline that runs from Edmonton to a marine terminal in Burnaby, B.C., where crude is loaded onto tankers and sent across the Pacific.

The $34 billion expansion completed in 2024 tripled the decade-old pipeline’s capacity, but the final price tag was nearly quintuple a 2017 estimate.

While approximately 70 per cent of cost overruns are set to be borne by Trans Mountain Corp, the remaining more than $9 billion are to be covered by tolls under a formula agreed to by shippers and approved by the Canada Energy Regulator more than a decade ago. Contracted shippers now pay nearly twice what Trans Mountain had estimated in 2017. Spot shippers pay even higher rates.

The cost overruns were at the heart of the recently settled toll negotiations.

The expansion project, which tripled the pipeline’s capacity to 890,000 barrels per day, began operating in 2024, and the company plans to increase that to 1.19 million barrels a day by late 2028. The federal government says those optimization projects and the finalization of the tolls must be completed before Ottawa can consider selling the asset to private investors or to First Nations seeking an equity stake.

Finance Canada recently sent a letter to the 129 First Nations along the Trans Mountain route, offering a collective 15 per cent ownership stake in the pipeline. This comes as Trans Mountain has been tasked with developing the proposed West Coast Oil Pipeline, a project that would effectively twin the existing line and is being pitched around First Nations ownership.

The federal Liberal government intends to officially designate the proposed West Coast pipeline as a project of national interest under the Building Canada Act Thursday, confidential sources told iPolitics. 

READ MORE: West Coast pipeline set for national interest designation Thursday, sources say

With files from the Canadian Press and Reuters