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Morneau says Ottawa willing to provide indemnity to ensure expansion of Trans Mountain pipeline
Published Wednesday, May 16, 2018 7:43AM MDT
Last Updated Wednesday, May 16, 2018 6:50PM MDT
Federal Finance Minister Bill Morneau provided an update on the status of talks between Kinder Morgan and Ottawa over the expansion of the Trans Mountain pipeline on Wednesday morning and says he is confident that an agreement can be reached.
Alberta and B.C. have been at odds over the expansion of the pipeline to the west coast, even though it was approved by the federal government in 2016.
The expansion project would significantly increase the amount of bitumen that is shipped on the line.
Prime Minister Justin Trudeau was in Calgary on Tuesday for a transportation funding announcement and was met by demonstrators on both sides of the issue.
He said discussions are ongoing and that the project is in the nation’s best interest.
“It creates jobs here in Alberta and indeed right across the country. It gets our resources to new markets at a time where people can understand that staying prisoner to a single market in the United States isn’t necessarily smart for our resource industry but it’s also giving us a discount of about $15 billion a year. We are losing $15 billion a year because we are trapped to the American market. Getting our resources to new markets safely and sustainably is there for an imperative, not just for Albertans, but for the Canadian economy. That’s why we’re moving forward with this pipeline, which went through a rigorous assessment process. We added to the process because we felt that the previous government’s process wasn’t robust enough, didn’t consult enough with the indigenous peoples, didn’t take into account enough of the science. We went through those extra hurdles. We approved this project and it is in the national interest,” said Trudeau.
Trudeau said he is confident that the project will go ahead.
“So I can tell you that my government is doing and will continue to do everything necessary to defend federal jurisdiction and mostly to get this pipeline built. We continue to work very hard every day, visibly but also behind the scenes to ensure that it’s going to get built and I’m very, very confident this pipeline will get built,” he said. "We’re saying flat out that we know, even the folks waving the ‘build Kinder Morgan’ signs, they want that pipeline to get built but they don’t want to see our environment fall into catastrophe, they want to see a good future for their kids too. There is no choice between what’s good for the environment and what’s good for the economy, they have to go together and if we have a criticism of the previous government’s approach on the economy it’s that they didn’t do well enough on the environment to allow them to move forward as they should have on the economy. So we’re taking an approach that both protects our oceans with the Historic Oceans Protection Plan, yes, brings in a price on carbon pollution and gets the pipeline built."
On Wednesday, Morneau also said he is confident that an agreement can be reached.
"We believe in this project. We believe it’s in the best interest of Canada and Canadians to get this project built." Morneau said.
In April, Kinder Morgan halted ‘non-essential activities’ on the project and gave the federal government until May 31 to provide assurance that the pipeline will be built.
Morneau says Ottawa will protect Kinder Morgan from any financial losses caused by disruptions in B.C.
“Kinder Morgan has expressed reservations about its ability to proceed with the project unless the uncertainty caused by Premier Horgan’s deliberate attempts to frustrate the project are resolved by the end of this month. Let me remind you that we’re here because despite the government of British Columbia approving this project, the B.C. premier, Premier Horgan’s stated intentions are to do whatever it takes to stop the project, which is unconstitutional in its very purpose. These are challenges that frankly put the livelihood of thousands of Canadians and their families at risk.”
He says that if the company decides to walk away from the project, then another company will be given the same level of protection.
“If Kinder Morgan isn’t interested in building the project we think plenty of investors would be interested in taking on this project, especially knowing that the federal government believes that it’s in the best interests of Canadians and is willing to provide indemnity to make sure that it gets done,” said Morneau.
He says talks will remain confidential but that the government is working to address uncertainty around the project.
“It’s important for Canada that investors are able to develop the vital infrastructure needed to get Canadian resources to global markets. As a country Canada must be able to develop our resources while protecting our environment and safeguarding our oceans and combating climate change and as a government we need to ensure that the rule of law is respected and that investors have the certainty needed to complete the Trans Mountain expansion project because it’s in the national interest to do so,” he said.
Kinder Morgan’s shareholders attended a meeting in Calgary on Wednesday and pipeline supporters rallied outside the Metropolitan Conference Centre where the meeting was held.
Liam Shaw works in the oil and gas industry and says the pipeline delays are hurting workers and their families.
“We’re small minority owners of a company here and we’ve been devastated by a lack of capacity to get oil to market,” he said. “This definitely does not help us recover where we need to be to be able to support our workers and their families.
Chairman and CEO of Kinder Morgan Canada, Steve Kean, released a statement following the meeting saying…
"We acknowledge the comments by Minister Morneau this morning and appreciate his acknowledgment of the uncertainty created by the BC Government's stated intentions to 'do whatever it takes to stop the Trans Mountain Expansion Project' and the 'exceptional political risk' this federally and provincially-approved project continues to face. We appreciate his recognition that a private company 'cannot resolve differences between governments.'
We remain steadfast in our previously stated principles: clarity on the path forward, particularly with respect to the ability to construct through British Columbia, and ensuring adequate protection of our KML shareholders. We take very seriously our commitment to the Canadian families, workers and retirees who have invested in this company.
While discussions are ongoing, we are not yet in alignment and will not negotiate in public. As we have stated, the May 31st deadline for these discussions is necessitated by approaching construction windows, the time required to mobilize contractors, and the need to commit significant new materials orders, among many other imperatives associated with such a large project."
Alberta Premier Rachel Notley also held a press conference to talk about the status of the project.
“The federal government took an important step on that matter in announcing that Ottawa will fully backstop the project. The federal government has worked with Alberta to eliminate the financial risk to the project brought by the actions of the B.C. government, the key piece of our overall strategy,” said Notley. “I am confident solutions will be found that allow for construction to resume on schedule this summer.”
Notley says B.C. does not have the legal authority to block the project and that Alberta will be equipped with new tools by the end of the day to control the flow of resources to B.C. if necessary.
“Albertans, British Columbians and all Canadians should understand that if the path forward for the pipeline through B.C. is not settled soon, I am ready and prepared to turn off the taps,” she said.
Kinder Morgan says it will be hard to continue if an agreement is not reached by the end of the month.