Trans Mountain will go forward as the newest asset of the Canadian government.
Industry leaders in both Alberta and British Columbia have voiced their support for the federal government’s decision to purchase the Trans Mountain pipeline project from Kinder Morgan for $4.5 billion, which was announced on May 29 by federal Finance Minister Bill Morneau.
“The government’s position is clear; the project must be built and it will be built,” Morneau said.
In addition to purchasing the pipeline and expansion project, the government will work with the Kinder Morgan board through July 22 to find a third-party buyer. Morneau indicated during the announcement that Indigenous groups and pension funds have already expressed interest.
For Independent Contractors and Businesses Association (ICBA) president Chris Gardner, the instability facing the project is the fault of the B.C. NDP government and its leader, Premier John Horgan.
“There should have been shovels in the ground by now and there aren’t, and that’s because of John Horgan,” Gardner said.
“This project was approved two years ago and the new NDP government has done everything that it can to block the project.
“In less than a year on the job, John Horgan has ripped up the approval of the Trans Mountain project; created a constitutional crisis; started a trade war with B.C.’s closest neighbour; sent a chilling message to investors that Canada does not respect the rule of law; and forced Ottawa to spend billions of taxpayer dollars to build a project that the private sector was more than willing to deliver.
“Kinder Morgan was holding all the risk, but now the taxpayers are. None of this was necessary, and Horgan has been reckless and irresponsible.”
The federal government’s actions may have saved the project, Gardner said, but it also sends a message to international investors looking at Canadian projects.
“It’s hard to imagine proponents of major infrastructure and responsible resource development projects taking any comfort from today’s announcement,” Gardner said. “Investment is fleeing Canada and commentators are saying ‘Canada is a laughing stock’ — this will simply accelerate that capital flight, taking with it opportunity, talent and jobs for Canadians.”
Progressive Contractors Association of Canada president Paul de Jong agreed while his organization is pleased the project will go forward, there are still many unanswered questions.
“Our perspective is immediately one of appreciation that the federal government has taken a firm role in clarifying what has been of great concern to many Canadians,” de Jong said. “The uncertainty around the project has been resolved, which is a good news story both for Canada and for British Columbia.”
But the move to purchase the project from Kinder Morgan seems more tactical than strategic, de Jong explained.
“There are questions as to how the government will handle the cost of the project and selling it back to the private sector, as well as to the strategic nature of natural resource projects. This doesn’t offer a clear line of sight for future projects,” he said.
Another area of concern, de Jong said, was whether the federal government would apply community benefit agreements to the Trans Mountain project.
“With the federal government taking a full equity stake, will there be a layering or superimposing of government requirements? We aren’t fundamentally opposed to that, but we do have questions in terms of worker mobility and fairness.”
De Jong cautioned the government has not made any announcements of possible additional requirements, yet.
“We’re not saying the government will do that, but they are now the owner and it could be a problem,” he said.
British Columbia Construction Association president Chris Atchison said the federal government’s move to purchase Trans Mountain would settle uncertainties surrounding the project.
“In particular, and critically, it sends an important message to current and future investors that we are a reliable investment partner. While protests against this project and others will continue, we are now confident about the future of the project,” Atchison said.
He added given the project is moving forward he expected a commitment at the federal level to developing B.C.’s skilled workforce.
“It’s an all-hands-on-deck moment, and BCCA is hopeful that this major investment of taxpayer dollars reflects a firm commitment by the federal government to fair and equal opportunity for all employers and the skilled tradespeople they require,” Atchison said.
Outside of B.C., Building Trades of Alberta executive director Terry Parker said Alberta Premier Rachel Notley should be commended for her determination and stance in moving the project forward.
“Notley went a different ideological way compared to other NDP governments across Canada, which took courage on her part and she kept pushing forward even through opposition against the project. She saw what was best for the province and kept moving forward,” he said.
Parker also said the federal government “stepped up to the plate” and didn’t foresee stumbling blocks in selling the pipeline back to a private investor or investors, provided it is completed.
“I don’t think the federal government will have a problem selling Trans Mountain after the fact. It will take a political hit if there is one, but after its built, I think it will be easily sold off or taken over,” he said.
On the political side of the spectrum, Horgan released a statement shortly after the federal announcement reinforcing his government’s opposition to Trans Mountain.
“Today’s events do not change the risks of a seven-fold increase in tanker traffic, or the catastrophic effect a diluted bitumen spill would cause to British Columbia’s economy and environment. Tens of thousands of B.C. jobs depend on pristine coastal and inland waters,” Horgan said.
“It does not matter who owns the pipeline. What matters is defending our coast — and our lands, rivers and streams — from the impact of a dilbit spill. Our government is determined to defend British Columbia’s interests within the rule of law and in the courts.”
The Government of Alberta will provide a backstop for the project up to a $2 billion maximum in case of “unforeseen circumstances.” The backstop would be payable only upon completion of the project and should it be used, the province will receive equity.
“When Kinder Morgan issued its deadline on April 8, the Government of Alberta committed that the (May 31) deadline would be met. Today, we are delivering on that commitment. We are pleased to have worked with the federal government to ensure construction resumes, certainty is increased and Albertans and all Canadians enjoy the many benefits of having this project go forward. There is more work to do, but we will not stop until the job is done,” Notley said in a statement.
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