Published: Wed, May 30, 2018
Money | By Ethel Goodwin

Canada Buys Trans Mountain Oil Pipeline, To Ensure It Gets Expanded

Canada Buys Trans Mountain Oil Pipeline, To Ensure It Gets Expanded

The federal government responded to Kinder Morgan's ultimatum by announcing Tuesday it had come to an agreement to buy the pipeline, as well as the project to expand it, for $4.5 billion.

The B.C. government is carrying on with its reference case against the Trans Mountain pipeline expansion, Premier John Horgan told Prime Minister Justin Trudeau in an early-morning phone call Tuesday.

The ensuing uncertainty, paired with vociferous opposition from environmental groups and some Indigenous communities in B.C., prompted Kinder Morgan to halt investment until the federal government could inject some certainty into the project.

All that said, Ball says it's important the situation out west is sorted out to make sure global natural-resource-based companies aren't scared away from investing in Canada.

"This project alone, in the next 20 years, will put $46.7 billion into our federal and provincial coffers".

Berman is a director of Stand.earth, one of the groups that organized an anti-pipeline protest in Vancouver on Tuesday after Finance Minister Bill Morneau announced the government's plans for the pipeline between Edmonton and Burnaby, B.C. Another protest is planned in Victoria on Thursday.

Kinder Morgan has valued the project at $7.4 billion.

Finding a buyer for Trans Mountain could be tricky amid ardent opposition from British Columbia, the Pacific Coast province it crosses, along with environmental and some indigenous groups.

"This is an extremely sad day for Canadian taxpayers", Conservative Leader Andrew Scheer said during question period. Notley said construction is to resume on the line within weeks. The much more ambitious Energy East project was abandoned by TransCanada Corp. amid outcry in Quebec - and no government move to save it.

"I mean, it seems like this is a project that the federal government is going to push through at all costs", Darling said as quoted by CBC.

The $4.5-billion purchase price does not cover the construction costs of building the new pipeline, however; Morneau refused to say what that cost may be.

"There was a promise made, and obviously it's going to be a promise kept, that one way or another this pipeline would be built because it's in the national interest", Crey said. "It's unacceptable for him to spend taxpayer dollars on it, especially $4.5 billion when all across Canada there is no clean drinking water for most (Indigenous) nations".

"This allows us to get rid of the political risk around [the pipeline] because we [are imposing] federal jurisdiction over the project", he said. It continues with "The vintage pipeline is a handyman's dream project".

Currently, 99 percent of Canada's oil is sold to the United States at a discount, and access to the Pacific coast is seen as key to diversifying the world's sixth-largest oil producer's energy exports.

Amid the feud, the pipeline has become a barometer for foreign investments in Canada, with some warning of a spillover into other sectors of the economy. The plan, similar to how Canada financed and managed shares in General Motors and Chrysler in 2009 during the financial crisis, will also include a new Crown corporation to manage the project. "They're willing to get involved", said Ball.

Many expressed outrage at the government's decision to buy the pipeline.

Like this: