Canadian Government Buys Trans Mountain Expansion Project


"Our government's position is clear: it must be built, and it will be built".

The B.C. government is carrying on with its reference case against the Trans Mountain pipeline expansion, Premier John Horgan told Prime Minister Justin Trudeau in an early-morning phone call Tuesday.

"The station was quickly isolated and as a precaution, the main Trans Mountain Pipeline has been shut down", the company said, adding it expected to restart the pipeline Sunday afternoon. "The only (way) in our estimation that that can be done is through exerting our jurisdiction by purchasing the project".

Trudeau dispatched Morneau to negotiate a deal with Kinder Morgan in mid-April, a week after the company halted all non-essential spending on the $7.4-billion pipeline pending reassurances from Ottawa that opposition to the project was not going to prevent it from being completed.

Kinder Morgan Canada Ltd (TSE:KML)'s share price reached a new 52-week high during mid-day trading on Tuesday.

Pending their approval, the sale would be finalized sometime in August or September.

It is flawed politically because it doesn't solve the real problem - which is that a good many British Columbians oppose any project that would increase the likelihood of heavy-oil spills along the Pacific Coast. The capacity of the pipeline system would increase from now 300,000 barrels per day to nearly 900,000.

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However Toronto energy lawyer Ian Blue said ownership doesn't change the fact that the Constitution clearly gives authority for pipelines to Ottawa and the Supreme Court has upheld the law to prevent provinces from doing anything that would "neutralize its essential function". Canada would then proceed with construction, selling the pipeline when it would generate the best return.

For that reason, the expansion proposal, which was OKed by the federal government in 2016, alarmed residents in the B.C.'s populous Vancouver area.

Crey wasn't completely surprised either by the bailout decision announced by Liberal government Ministers Bill Morneau and Jim Carr. The court challenge was filed about two weeks later. For years, it transported standard crude oil without controversy.

For his part, Trudeau rejected the idea, accusing the Conservatives of raising "old news" because they were embarrassed that they couldn't get pipelines built when they were in government. "These are exceptional circumstances and should not be considered the norm", the association said. That raises the question of whether or not Mr. Trudeau has the stomach for watching Canadians get manacled on his government's behalf, not to mention for telling indigenous communities that the pipeline is going through their land whether they like it or not, or for being attacked for being on the wrong side in the fight against climate change, one of his pet issues.

"The federal government has responded and that's their business". His concerns largely stem from the limited science available on how diluted bitumen behaves if it is spilled and the risk that comes from increasing the amount of it being shipped on tankers out of Kinder Morgan's marine terminal in Burnaby, B.C.

Alberta Premier Rachel Notley, however, could barely contain her delight. "This project has more certainty than ever before".

She also said any money the province puts in will be converted to equity in the pipeline, so there should be no negative effect on Alberta's credit rating. "It polarized us. That is not who we are", Carr told the news conference.