We own a pipeline!
Well, not yet.
Federal Finance Minister Bill Morneau announced yesterday that the federal government plans to purchase the existing Trans Mountain Pipeline from Kinder Morgan Inc. by August 2018 if another investor cannot be found. The federal government has committed to help the Texas-based corporation find a new owner for the pipeline by August 2018, or else Ottawa will “purchase the company’s Trans Mountain Expansion Project and related pipeline and terminal assets for $4.5 billion.”
In the meantime, the federal government will loan funds to Kinder Morgan Inc. in order to start construction on the pipeline this summer. If the federal government does purchase the pipeline, which seems likely, then a Crown Corporation will be created to complete the estimate $9 billion expansion of the currently existing pipeline.
Morneau declared the federal government would be eager to sell the pipeline back to a private company once it is built, but if the project is truly in the national interest – and going to be built with public dollars – then maybe it should remain an asset of the federal government and the people of Canada.
Here is a look at how yesterday’s pipeline announcement impacts some of the key players in this seemingly never ending political dispute:
Justin Trudeau: The Prime Minister of Canada silenced conservative opponents from claiming he was secretly plotting the pipeline’s demise and mutes his social democratic opponents who say he was just kowtowing to a Texas-based oil company. While the project will move forward with the powers of the federal government behind it, it is unclear if this will help Trudeau’s Liberals electorally in Alberta (where his Liberal Party holds three seats) or in British Columbia (where his party holds 19 seats).
Rachel Notley: This is a big win for the Premier of Alberta. Notley has been the strongest public advocate for the pipeline expansion and has poured almost all of her political capital into the success of this project. She has taken a firm line with pipeline opponents, most notably the Government of British Columbia, by threatening to slow or halt the transport of oil and gas from Alberta into BC.
Kinder Morgan Inc: If all goes according to plan, Texas-based Kinder Morgan Inc. will walk away with a big $4.5 billion payment from the Government of Canada, all because our system of democracy and federalism inconvenienced its shareholders.
John Horgan: The Premier of British Columbia says he will continue to use the tools available to him to oppose the pipeline expansion, including its current legal challenges. The entry of the federal government as the owner of the pipeline introduces a new dynamic between the governments in Victoria and Ottawa. As many premiers have discovered, running for re-election with Ottawa as your main opponent can be a recipe for success.
Andrew Weaver: The leader of the BC Green Party holds the balance of power in his province as long as his 3-MLA caucus continues to support Horgan’s NDP government in Victoria. The Green leader described the federal government’s intervention as “a betrayal by a government who ran on a hopeful vision for a better future.” The Greens will expect Horgan to continue their fight against the pipeline and likely will not consider ending their agreement with the NDP until sometime after the upcoming Proportional Representation referendum.
Jason Kenney: The leader of the Official Opposition in Alberta supported Notley’s pitch last month for the Alberta government to invest in the pipeline, so he has once again been relegated to the sidelines on the pipeline issue.
Andrew Scheer: The leader of the Official Opposition in Ottawa attacks the Trudeau Liberals for driving away private sector investment and claimed Trudeau forced through expansion of the Trans Mountain pipeline by nationalizing the project. To better understand the track record of government involvement in the energy industry, Scheer would benefit from taking a crash-course in Canada’s energy history. I recommend he start his education by reading Larry Pratt’s The Tar Sands: Syncrude and the Politics of Oil, which is an essential text on the history of Alberta’s oil sands.
Will the pipeline actually get built? Maybe.
Ownership of the pipeline will change and the federal government does have powers, both political and legal, that a private corporation does not, the opposition to the pipeline has not magically evaporated overnight. Public opinion remains mixed in British Columbia and the opposition to the pipeline expansion is firm. There will continue to be protests against the pipeline and demonstrations of civil disobedience can be expected.
There is also a federal election scheduled to take place in October 2019 and a provincial election expected to be called in Alberta in spring 2019.
While Morneau was clear he wants construction on the Trans Mountain Pipeline expansion to begin immediately, a number of legal and political challenges still stand in the way of the project’s completion.