Ottawa's planned purchase of pipeline elicits shock, disappointment

Canada to buy major pipeline to ensure it gets built

Ottawa's planned purchase of pipeline elicits shock, disappointment

The Government of Canada has reached an agreement with Kinder Morgan to buy the Trans Mountain Expansion Project and related pipeline and terminal assets for US$3.5 billion (C$4.5 billion), as the federal government stepped in to save the project after British Columbia's fierce opposition to the project was threatening to derail it.

Morneau presented the options during an early-morning cabinet meeting Tuesday before ministers signed off on the chosen option, which comes just days before the company's self-imposed May 31 deadline and is still subject to the approval of Kinder Morgan shareholders.

Federal Finance Minister Bill Morneau made the announcement from Ottawa and says the deal represents a sound investment. During or following construction of the expanded pipeline, which is expected to take about 2.5 years to complete, Canada will monitor the markets and seek out future investors interested in taking on the entire project once it is done.

"Today, we've taken action to create & protect jobs in Alberta and BC, and restart construction on the TMX pipeline expansion, a vital project in the national interest", Trudeau said in a tweet.

Canada's federal government said Tuesday it is buying a controversial pipeline from the Alberta oil sands to the Pacific Coast to ensure it gets built. The purchase includes the pipeline, pumping stations, and rights of way along the route.

British Columbia, the birthplace of Greenpeace, provides critical ocean access to get Canada's landlocked exports out of oil-rich Alberta to new buyers.

He said it threatens Canada's reputation as a safe place to invest, puts thousands of jobs at risk and holds back Canada's economic growth.

"If the province of British Columbia tries to get an injunction to stop the federal government from going ahead with the pipeline, it is highly unlikely it will get very far in a Canadian court", Austin added. For several years a company called Kinder Morgan has been trying to build a new Trans Mountain Pipeline that would follow the path of the existing pipeline and allow much higher volumes of oil to flow west. "I'm concerned there could be catastrophic consequences from a diluted bitumen spill, regardless of the owner of the pipeline", Horgan said.

Canada approved the project in November 2016, following an expanded environmental review process that included additional consultations with Indigenous communities and assessing the amount of additional emissions likely to result from additional production.

The move is a calculated political risk for Prime Minister Justin Trudeau, who has embraced the Paris environmental accord and the need for Canada to fight climate change.

Morneau said Indigenous groups, pension funds, and others have expressed interest in the project.

Reaction to the deal is certainly mixed and coming from all parts of the country, including from British Columbia's two leading men and Rachel Notley, the premier of Alberta.

A majority of Canadians support the pipeline, according to recent polls, but they are reluctant to see tax dollars used to support it. A lack of capacity in pipelines or in rail cars to ship oil produced in Alberta is also hurting Canada's energy sector.

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