Feds' pledge to financially back Trans Mountain pipeline won't eliminate all risk: Carr
Published Wednesday, May 16, 2018 6:57AM EDT
Last Updated Wednesday, May 16, 2018 6:24PM EDT
OTTAWA—The federal government is willing and prepared to financially back the Trans Mountain pipeline expansion, whether or not Kinder Morgan is the company that ends up building it.
In Ottawa Wednesday morning, Finance Minister Bill Morneau laid out the Liberals’ three guiding principles as talks continue with Kinder Morgan about the fate of the cross-provincial project.
Specifically, the federal government is:
- Prepared to indemnify the project from any financial loss;
- Willing to offer this financial security to any company who wants to build the pipeline, should Kinder Morgan back out;
- Ensuring the financial backing is fair and beneficial to Canadians.
"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 it is in the best interest of Canadians and is willing to provide indemnity to make sure that it gets done," Morneau said, noting that he is “confident” an agreement will be made.
Though, this step won’t address all of the business risk surrounding the much-debated pipeline project, rather it will take out the “political risk,” according to federal Natural Resources Minister Jim Carr.
In an interview with Don Martin, host of CTV’s Power Play, Carr said the federal move is about addressing “the delays as the result of the political risk,” the project has faced as a result of B.C.’s opposition.
Carr acknowledged that the indemnification won’t address other “normal” business risks to the project’s future, which with Kinder Morgan could include Indigenous blockades or environmental protests.
“We knew that we had to take some of the uncertainty out of the project, so one way to do that is to indemnify it… but only to take out the political risk,” Carr said. “This is an unusual risk.”
He also doubled down on the federal call-out of B.C. NDP Premier John Horgan over his pledge to stop the project from being built.
Earlier Wednesday, Morneau placed the blame for the current "exceptional situation" on Horgan’s shoulders, calling the delay deliberate and "politically motivated."
Morneau would not say how much money the federal government is willing to put into ensuring the $7.4-billion pipeline is built.
He said it is the federal government’s responsibility to resolve the dispute between Alberta and British Columbia over the pipeline that would move oil from Edmonton, Alta. to Burnaby, B.C.
"It's not reasonable to expect a private sector actor to deal with disputes between governments. We've found a way, we believe, to deal with that political risk and should Kinder Morgan not want to move forward with that approach to dealing with it, we think there’s other private sector actors who would be willing to move forward," Morneau said Wednesday.
In an interview on CTV’s Power Play, B.C. Green Party Leader Andrew Weaver balked at the federal government’s approach.
“It’s outrageous that we’re actually having this conversation that somehow that there’s a duty for the taxpayers to bail anyone out. We know in any project there’s risks, investors know when they invest in a company there are risks associated with that,” Weaver said. “The problem here is that Trudeau and his government have been reckless in their promising, they’ve been chest beating, they have not been on the ground here.”
Weaver denied Horgan and the B.C. NDP -- who are working in a coalition with the Greens to govern -- have done anything to stall Kinder Morgan.
The federal government is continuing talks with Kinder Morgan, the developers of the Trans Mountain project, after the Texas-based company put the project on pause, demanding reassurance by May 31 that it can go ahead despite B.C. opposition.
The government’s announcement came hours before a brief meeting of Kinder Morgan's shareholders in Calgary. The meeting lasted around 15 minutes and shareholders were met on their way in by supporters.
In a statement, Kinder Morgan Chairman and CEO Steve Kean said the company appreciates Morneau’s “acknowledgment of the uncertainty created by the B.C. government's stated intentions to 'do whatever it takes to stop the Trans Mountain Expansion Project.’”
Kean said the company will not be negotiating in public.
Political, activist reaction:
Addressing the federal government’s attacks, Horgan called it an "unprecedented day," and defended his actions.
"It seems to me it’s mostly rhetoric and hyperbole instead of any substance that British Columbians and Canadians can grab on to," Horgan told reporters.
"To continue to say that the B.C. government is the problem here misses a whole bunch of other issues, court cases that are underway, and have been well before I was sworn in. I think that wanting to demonize me, that’s fine, that’s politics, but I’m not concerned about that. I’m concerned about making sure that I have an opportunity to do my best to protect what’s right and what’s just in British Columbia, and that’s what I’m doing," he said.
During a press conference Wednesday, Alberta NDP Premier Rachel Notley hailed the federal government's pledge and took aim at her federal counterpart for his opposition to the pipeline.
Responding to federal NDP Leader Jagmeet Singh's tweet Wednesday-- in which he said the pipeline should not be built, deriding the Liberals for giving the U.S. company a "blank cheque while dumping all the risks on Canadians,"-- Notley said: “I think Jagmeet Singh is absolutely, fundamentally, uncontrovertibly incorrect in every element of that tweet.”
Liberals are giving Texas oil company #KinderMorgan a blank cheque while dumping all the risks on Canadians— Jagmeet Singh (@theJagmeetSingh) May 16, 2018
Rigged process, First Nations & local communities shut out, oil spill threats, science ignored & now billions on the line
It's clear this pipeline should not be built.
Notley said her government is working closely with the federal government to see the pipeline construction resume this summer.
By day’s end the Alberta legislature is set to pass a bill that could restrict the flow of oil and gas to B.C. by giving the provincial energy minister discretion regarding natural resources being exported from Alberta.
In a statement, federal Conservative natural resources critic Shannon Stubbs took aim at the prospect of using tax dollars to backstop Kinder Morgan.
“Kinder Morgan never asked for taxpayer money or a federal backstop. They simply want certainty, clarity, and a solution to the ongoing challenges and delays. Nothing the Finance Minister said today will ensure that the Trans Mountain Expansion actually gets built,” Stubbs said.
Federal Green Party Leader Elizabeth May -- who is facing criminal charges after protesting the pipeline in B.C.-- said the Liberal’s openness to financially backing the project is a violation of their 2015 campaign promise to end fossil fuel subsidies.
"Subsidizing big oil at this point in the process is not surprising, but blaming Premier Horgan is plain shameful. British Columbians have done nothing to obstruct the project… Kinder Morgan is taking the Liberal party for a ride and Canadians along with it," May said in a statement.
In an emailed statement, Greenpeace spokesperson Mike Hudema said the risks to the project go beyond financial, citing the ongoing legal challenges and on-the-ground resistance.
"Signing a taxpayer-backed blank cheque with Kinder Morgan’s name on it is the definition of throwing good money after bad and Canadians shouldn’t be on the hook for the big losses this project will likely incur," Hudema said. "The federal government should cut their losses not double down on them."
Trudeau was in Calgary Tuesday to announce transit funding and was met by pro-pipeline demonstrators yelling "Build KM," and "build that pipe."
After an emergency meeting with the feuding British Columbia and Alberta premiers last month, Trudeau first said financial talks were being initiated, and pledged legislative measures that have yet to be tabled.
Earlier this month, the federal government announced it would be intervening in the British Columbia government's court reference on the Kinder Morgan pipeline, to assert the federal government's jurisdiction.