Federal government spending $4.5B to buy Trans Mountain pipeline

Katie Ramirez
May 29, 2018

Canada will buy Kinder Morgan Canada Ltd.'s Trans Mountain oil pipeline and its controversial expansion project for C$4.5 billion ($3.5 billion) in a bid to ensure it gets built amid fierce opposition.

The options were presented during an early-morning cabinet meeting before ministers made a call on how to proceed.

Finance Minister Bill Morneau said that buying the existing pipeline and its planned expansion project, which will carry crude oil from landlocked Alberta to a port in the Vancouver area, is the only way to ensure the halted project gets built.

The federal finance minister said the government does not plan to be the long-term owner of the pipeline and expects the project to be transferred to private sector investors "at an appropriate time".

The purchase will be financed by Export Development Canada and includes; the pipeline, pumping stations, the marine terminal in Burnaby, B.C. and rights of way along the pipeline between Edmonton and Vancouver.

Canada first offered earlier this month to indemnify the expansion project before making Tuesday's announcement.

Green Party leader Elizabeth May has pleaded guilty to a criminal contempt of court charge for violating a court-imposed protest-free zone at a Kinder Morgan work sit in Burnaby in March.

The minister added that the federal government didn't intend to own the project long term.

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

The Alberta government will provide funding for any unexpected costs that arise during construction.

"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 company suspended all non-essential construction on the project in April, citing opposition from the B.C. government that put the viability of the pipeline in question. The company said it would decide on the pipeline project's fate on 31 May.

Ottawa is pressing ahead, firmly of the opinion there is no doubt about its jurisdiction.

"This is a great day for Canada, for our customers and for our employees".

Canada's oil sector has been stung in the past year as foreign energy companies retreated amid concerns about the environmental toll, high production costs and a risky regulatory regime.

Editor's note: This article was updated with additional quotes and background at 11:05 a.m. on May 29, 2018.

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