Finance Minister Bill Morneau speaks about the Trans Mountain Expansion project at a press conference in Ottawa on May 16, 2018. THE CANADIAN PRESS/Patrick Doyle

Finance Minister Bill Morneau speaks about the Trans Mountain Expansion project at a press conference in Ottawa on May 16, 2018. THE CANADIAN PRESS/Patrick Doyle

Feds explore buying Trans Mountain; decision coming Tuesday

Finance Minister Bill Morneau will soon say where government plans to go with Kinder Morgan pipeline

Finance Minister Bill Morneau will announce as early as Tuesday morning where the government plans to go with Kinder Morgan to ensure the controversial Trans Mountain pipeline expansion will be built.

The Canadian Press has learned there are three options on the table, which include the government buying and building the expansion, then selling it once it’s complete; and buying it on an interim basis, then selling it to investors and leaving them to handle the construction.

Morneau has already unveiled the third option: leaving original project architect Kinder Morgan to handle construction, but covering any cost overruns incurred as a result of political interference.

The federal cabinet has been summoned to meet Tuesday morning, two hours earlier than usual, after which Morneau will discuss which of the three options the government has decided on.

Kinder Morgan gave Ottawa until Thursday to convince it to proceed by settling down jittery investors who fear a court challenge from the B.C. government would make the project too great a liability.

Prime Minister Justin Trudeau has put a lot of political capital on the project, pledging over and over again that the pipeline expansion is in national interest and will be built one way or another.

Related: Trans Mountain pipeline: First Nations remain divided

Related: Trans Mountain pipeline: How we got here

Since the government has declared the project to be in the national interest, it has financial tools available to it to buy into the project, similar to when the former government bailed out General Motors and Chrysler during the financial crisis in 2008 and 2009.

Trudeau said Canada loses $15 billion a year because oil cannot be exported anywhere but the United States, adding that the pipeline expansion opens up the option of exporting to Asian markets.

He also said Canada’s environmental protections for oceans and its climate change policies hinge on Canada being able to sell its natural resources even as the country begins to transition to cleaner sources of energy.

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.

That decision came as British Columbia Premier John Horgan was working on a court challenge to seek judicial guidance on whether provinces can restrict what flows through pipelines for environmental reasons. The court challenge was filed about two weeks later.

Provinces have jurisdiction over the environment, but the Constitution gives Canada the authority over interprovincial transportation, including pipelines.

Horgan contends Canada has jurisdiction to build the pipeline but that he can regulate what flows into his province within the pipeline. 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.

Trudeau argues the project went through several approvals, including an expanded environmental approval process that did more consultation with Indigenous communities and looked at additional environmental risks, including the affect on emissions of producing more oil to flow through the pipeline.

Trudeau would not tip his hand Monday on the state of talks with Kinder Morgan, but reiterated his government’s constant refrain that the project is absolutely going to be built.

“We continue to engage in financial discussions on the way we are going to do that,” Trudeau said.

After Morneau went public with the option to cover cost overruns May 17, Kinder Morgan CEO Steve Kean said the company and the government were not yet “in alignment” and the negotiations would not take place in public.

Construction has begun on some of the modifications for the company’s marine terminal in Burnaby, where Trans Mountain’s oil is loaded onto tankers for export. The pipeline itself has been awaiting final route approvals, and construction permits. The May 31 deadline was set with construction season limitations in mind.

The company has already spent about $1 billion on the project to date, and if construction started on time this summer, completion was scheduled for December 2020. The proposal is to run the pipeline parallel to the existing one that runs between Edmonton and Burnaby to increase capacity almost three fold.

Tim McMillan, president of the Canadian Association of Pipeline Producers, said what happens this week is “huge, not just for our industry or this pipeline, but I think for Canada.”

McMillan said if a pipeline that meets a high regulatory standard, has all the approvals, support from a majority of Canadians and the backing of the federal government cannot get built, it sends a chilling signal that Canada is not open for business.

“It’s essential we see a smooth transition to construction at this point,” he said.

Related: Trans Mountain pipeline: Is it worth the risk?

Related: Indigenous leaders pitch sustainability to Kinder Morgan shareholders

Mia Rabson, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Kalamalka Secondary School staff and students have been warned to self isolate if showing COVID-19 symptoms after possible exposure on March 13, 2020. (Google Maps)
First case of COVID-19 in Coldstream school

Three more schools confirm positive cases

The City of Vernon’s Recreation Services is bringing back indoor walking at Kal Tire Place, with public skating also in the works over the Christmas holidays. (Brendan Shykora - Morning Star)
Vernon rec hard hit in pandemic

Cancellations and closures see expected drops in fourth-quarter report

The Abbotsford Tulip Festival is permanently closing, with plans to eventually set up in Armstrong, B.C. (Abbotsford News file photo)
Abbotsford Tulip Festival is closing, with plans to rebloom in Armstrong

Event organizer says pandemic and sale of land were factors in decision

(THE NEWS – files)
Snowy days ahead for the Okanagan and Shuswap

The region could get up to 5 cm by Thursday

Three cars had their tires slashed in Vernon over the weekend. (Contributed)
Tires slashed at three Vernon residences

RCMP investigating Okanagan Landing-area incidents

Crews with Discovery Channel film as an Aggressive Towing driver moves a Grumman S2F Tracker aircraft around a 90-degree turn from its compound and onto the road on Saturday, Jan. 23, 2021. It was the “most difficult” part of the move for the airplane, one organizer said. (Jenna Hauck/ Chilliwack Progress)
VIDEO: Vintage military plane gets towed from Chilliwack to Greater Victoria

Grumman CP-121 Tracker’s eventual home the British Columbia Aviation Museum on Vancouver Island

(Michael Rodriguez - Capital News staff)
Downtown stairwell fire suspicious, Kelowna RCMP say

Crews were called to Gotham Nightclub for a report of a stairwell fire

Rolling seven-day average of cases by B.C. health authority to Jan. 21. Fraser Health in purple, Vancouver Coastal red, Interior Health orange, Northern Health green and Vancouver Island blue. (B.C. Centre for Disease Control)
Second doses delayed as B.C. vaccine delivery delayed again

New COVID-19 cases slowing in Fraser Health region

Head Brewer Kody Rosentreter, owner Wes Greve and taproom manager Lisa Deleo celebrated North Basin Brewing’s grand opening Jan. 22 and 23, 2020. (Contributed)
Osoyoos’ first microbrewery celebrates grand opening

The brewery hopes to show that the Okanagan is more than just wine country

Kelowna Mayor Colin Basran addresses media from the front steps of council chambers on March 23. (Michael Rodriguez - Capital News)
Kelowna, West Kelowna still looking to opt-out of speculation tax

Mayors say spec tax has missed the mark, revenue largely coming out of Canadians’ pockets

Provincial health officer Dr. Bonnie Henry talk about the next steps in B.C.’s COVID-19 Immunization Plan during a press conference at Legislature in Victoria, B.C., on Friday, January 22, 2021. Two more cases of the COVID-19 strain first identified in South Africa have been diagnosed in British Columbia, bringing the total to three as of Jan. 16.THE CANADIAN PRESS/Chad Hipolito
B.C. now has three cases of South African COVID-19 variant, six of U.K. strain

Both variants are thought to spread faster than earlier strains

Rodney and Ekaterina Baker in an undated photo from social media. The couple has been ticketed and charged under the Yukon’s <em>Civil Emergency Measures Act</em> for breaking isolation requirements in order to sneak into a vaccine clinic and receive Moderna vaccine doses in Beaver Creek. (Facebook/Submitted)
Great Canadian Gaming CEO resigns after being accused of sneaking into Yukon for vaccine

Rod Baker and Ekaterina Baker were charged with two CEMA violations each

Police discovered a makeshift nightclub in a Vancouver apartment on Jan. 23, 2021, and say it wasn’t the first time this month officers have been called to the unit over social gathering concerns. (Phil McLachlan - Capital News)
Doorman of makeshift ‘booze-can’ in Vancouver apartment fined; police look to court order

This marks the fourth complaint about social gatherings inside the apartment in January

A Kelowna couple welcomed their Nooner baby in December. (Flytographer)
Kelowna couple welcomes baby girl from Hotel Zed Nooner campaign

Nicole and Alex will now have 18 years of free stays at the hotel

Most Read