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

Mae Love
May 30, 2018

When the finance minister rose again, he said the previous Tory government was not able to get a "pipeline to market", which is not correct. The federal government will retain key management and technical personnel within Kinder Morgan Canada to execute the construction project. That would no longer be a concern - the federal government could simply choose to carry on without them if it owns the project, according to Austin.

Kinder Morgan is going to start construction on the pipeline this summer, with Ottawa providing loan guarantees for any money the company spends on the endeavour between now and when the pipeline is sold.

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.

"Governments do a lot of things right, but running businesses is probably not near the top of the list", Wall said.

He said the only major government-owned pipelines he knows of in the world exist in countries like China, Saudi Arabia or Kuwait, where the pipeline is operated by a subsidiary of a national oil company.

Opponents of the pipeline are concerned about the risk of oil spills from tankers along Canada's pristine Pacific coast impacting fisheries and tourism.

"Our government is determined to defend British Columbia's interests within the rule of law and in the courts", said Horgan.

"This is a great set of assets that we are now expanding and expect to continue to find opportunities to expand in the future", Kean said.

"This is an extremely sad day for Canadian taxpayers", Conservative Leader Andrew Scheer said during question period.

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Canada loses $15 billion every year on the sale of oil because the US remains its only export customer, resulting in a lower price, Trudeau argues.

John Horgan, British Columbia's premier, has asked a court to determine whether the province has jurisdiction over the pipeline, vowing to block the expansion if the court says yes. But the pipeline faces strong opposition in British Columbia, particularly in the Vancouver area.

"This move sets a awful precedent and signals to other prospective investors that large projects such as pipelines can not be built by private industry in Canada", said Aaron Wudrick, federal director of the Canadian Taxpayers Federation, a right-leaning group that advocates for lower taxes. The finance minister says the move will "ensure" the oilsands pipeline expansion gets built.

"Canada stands to sacrifice its worldwide 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 company was on pace to grow its earnings at a rate of five per cent with the Trans Mountain expansion project, but would only grow at a rate of two per cent to three per cent without the project, Rowland had said in an interview last week. It spoke to the transportation of diluted bitumen through British Columbia by rail or by pipe. "There's still 10,000 people who will get arrested if need be".

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.

Duane Bratt said it's too soon to say whether Trans Mountain will give Notley a bump in the polls, but no deal by Thursday would clearly have been a killer.

The Export Development Bank of Canada will finance the plan and create a Crown corporation to run and manage the pipeline during Canada's ownership period.

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