Federal Government to Buy Trans Mountain Pipeline for $4.5-Billion

Darfield pump station

The Darfield pump station is about 80 kilometres north of Kamloops B.C

"We view the announcement as negative for entities considering large resource-focused capital investments in Canada such as LNG, pipelines or oilsands projects, given the inability for the rule of law and regulatory approvals to allow projects to move forward", Fitzmartyn said in a note to clients.

Finance Minister Bill Morneau drew the ire of Conservatives Tuesday by questioning if Tory Leader Andrew Scheer has the business chops to understand the government's $4.5-billion plan to buy the Trans Mountain pipeline and all of Kinder Morgan Canada's core assets.

The Government of Canada has reached a deal with Kinder Morgan to buy the highly contested Trans Mountain Pipeline.

"Despite tens of thousands of people opposing it, he just used taxpayer money to bailout a project that communities don't want, that would break his own climate commitments, and that Indigenous peoples are fighting from the frontlines to the courtrooms", Thomas-Muller added. Morneau had said Canada would cover any cost overruns caused by B.C.'s actions, but in the end, that clearly wasn't enough.

He says Kinder Morgan will proceed with its plan to twin the pipeline this summer while the sale is completed.

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. Citing investor uncertainty, it also said it would give up on the expansion plan if British Columbia did not stop its attempts to block it by this Thursday.

Canada only has two options for selling that oil.

Later on Tuesday, many criticised the government's move, saying it raised broader environmental concerns by enabling increased development of the carbon-heavy oil sands, as well as burdened Canadian taxpayers for a project that should be paid by the private sector.

"For years and years and years, we've had pipelines built across Canada and the United States".

Morneau faced off against Scheer in question period hours after the minister unveiled the pricey deal to salvage the British Columbia pipeline expansion project.

"Canada stands to sacrifice its global reputation, irreplaceable iconic species like the Southern resident Killer Whales, and its commitments to meet its Paris Climate targets and to reconcile with Indigenous people - all while putting enormous risk on Canadian taxpayers".

The $4.5-billion purchase price only buys a leaking 65-year-old pipeline, an aging tanker farm not built to withstand earthquakes, and a port facility as well as engineering plans and permits for the twinning of a high-risk expansion project.

Elizabeth May, the leader of Canada's Green Party, characterized the project as much more than a pipeline.

"For Indigenous groups, we'll make sure that existing profit-sharing or other agreements established with Kinder Morgan remain in effect".

Indigenous chiefs and First Nations have already assembled in Montreal earlier this week to protest the project, and Indigenous groups protesting the pipeline's construction in Burnaby said they'll push back regardless of Tuesday's announcement.

The Alberta government announced its support to the project in the form of a backstop that would be called upon in unforeseen circumstances.

Morneau says it is not the Government of Canada's intent to be a long-term owner of the pipeline and it will work with investors to transfer the project and related assets to a new owner to ensure the project operates in the public's interest.

Alberta province also pledged to provide "emergency funding" for the pipeline's construction, if needed.

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