Ottawa: Prime Minister Justin Trudeau says he has instructed his finance minister to enter negotiations with Kinder Morgan to “remove the uncertainty” hanging over the Trans Mountain pipeline expansion.
Trudeau also says federal legislation is coming that will “reassert and reinforce” the fact that the federal government is well within its jurisdiction to approve the $7.4 billion project and ensure it goes ahead.
Finally, he says he’s willing to expand and improve upon his government’s $1.5 billion oceans protection plan in an effort to ensure the most stringent protections are available to reassure British Columbia its coasts are not at risk.
He’s offering few details, however, saying the negotiations will not take place in public. Despite that, it is the most concrete Trudeau has been yet about how his government intends to solve the impasse that led Kinder Morgan to suspend all non-essential spending on the expansion project pending reassurance from Ottawa the pipeline will be able to go forward.
“Ideally, we wouldn’t be in this situation right now,” Trudeau told a news conference Sunday after a closely watched, last-minute meeting with B.C. Premier John Horgan, who is blocking the project, and Alberta Premier Rachel Notley, who desperately wants to see it go ahead.
Trudeau would not go as far as others to call the pipeline impasse a “constitutional crisis” but laid all the blame for the situation at Horgan’s feet. The pipeline was approved in 2016 with the support of the former B.C. Liberal government of Christy Clark. Horgan defeated Clark in an election last year.
“I don’t think it’s any surprise to anyone that I don’t think we would be in this situation if the British Columbia government hadn’t continued to emphasize its opposition to the project,” Trudeau said. “That is why we are at this point right now.”
Although both Horgan and Notley came out of the meeting saying it was collegial and cooperative, neither is coming out of their entrenchments. Horgan said the promised court reference question to verify what jurisdiction, if any, B.C. has over the pipeline and its contents, is coming “within days.”
He said he’d hoped to have it done earlier but these questions are complicated and take time to put together right.
Notley said legislation she promised that will allow it to alter flows of oil through the existing Trans Mountain pipeline into B.C. is going to be introduced in the Alberta legislature this week. Analysts suggest that could hike gas prices in the Lower Mainland over $2 per litre and would have an immediate, economy-wide impact on the province.
Trudeau said while his government is committed to working with both premiers to find a solution, “we must recognize that they remain at an impasse which only the government of Canada has the capacity and the authority to resolve.”
The legislation is expected to reassert, in addition to the Constitution, Ottawa’s authority over pipelines. This is a bid to try and take the wind out the sails of Horgan’s court challenge.
Financially the government has options that include assuming some of the investor’s risk or finding a way to guarantee investor returns on schedule. Trudeau said he is “not ready” to say Canada is buying the pipeline outright or even putting in an equity stake. He said whatever financial arrangement is reached will include protections for taxpayers.
“We engaged in financial discussions with the pipeline owner, Kinder Morgan,” he said. “This is a series of discussions that are happening in Calgary, Toronto, Houston and New York. They won’t happen in public. As soon as we have something to announce I promise you we will let you know.”
Horgan said he’d received assurances from Trudeau that he would not “punish” British Columbians over their government’s objections, meaning Ottawa isn’t going to be withholding federal funds from B.C. in an effort to get the Horgan government on side.
Trudeau said he is also willing to discuss with Horgan additional environmental protections that could give B.C. confidence over its shorelines and marine environments, but accused Horgan of refusing to tell him for nearly a year what gaps Horgan feels exist in the existing or promised protections under the Oceans Protections Plan.
Trudeau said recently he would not have approved the pipeline if he wasn’t convinced the environment was protected and said he has been consistent for years that he believes the environment and the economy go together and can both be managed for the benefit of all Canadians.
“That is exactly what we are doing,” he said of the Trans Mountain salvage plan. “We are simply demonstrating the resolve to actually deliver on that promise to Canadians.”
Trudeau also said all of this is being done with a view to allowing Kinder Morgan to proceed on schedule. Construction on the pipeline expansion itself has yet to begin and needs to start by the end of May if the company’s plan to get the oil flowing through it by the end of 2020 is to work.
Hence why May 31 is also the deadline the company gave the government to restore investor confidence in the project.
Notley seemed quite happy with the outcome of the meeting and said she is confident the nature of the financial discussions taking place with Kinder Morgan will be enough to overcome investor concerns.
“We are feeling a lot better about it,” said Notley.
“I’m quite confident that should these discussions end successfully, that the pipeline will be built, and that is good, because the pipeline is in the national interest.”
Horgan’s news conference was barely over before Conservative Leader Andrew Scheer was at the podium, laying the blame for the impasse squarely at the prime minister’s feet.
“His damaging policies … have only led to more uncertainty and instability in Canada’s resource sector,” Scheer said.
The energy sector, Scheer said, is now convinced that “Justin Trudeau does not want their business in Canada.”
Trudeau’s cabinet approved the pipeline in 2016, following an interim environmental review process that included assessing things such as the emissions that will be created from producing additional fossil fuels that will flow through it. The cabinet decided the project, which will build a new pipeline that runs parallel to an existing one but can carry twice as much, was in the national interest.
The meeting, convened at the last minute Thursday as Trudeau was departing for the Summit of the Americas in Peru, marked the first time the three leaders have all been in the same room together to hash out the dispute.