OTTAWA – The Liberal government’s $4.5 billion gamble to buy the Trans Mountain pipeline in a bid to get it expanded will come to a head on Tuesday when the federal cabinet decides whether to sign off on the project for a second time.
It has been more than 290 days since the Federal Court of Appeal ripped up the original approval and sent the government back to the drawing board to do a more fulsome consultation with Indigenous communities and take a harder look at the impact the project will have on marine life off the coast of British Columbia.
Natural Resources Minister Amarjeet Sohi said last week the official consultations with 117 affected Indigenous communities wrapped up in early June, paving the way for cabinet to make its final decision at its regular meeting on June 18.
The expansion would twin a 66-year-old pipeline that runs from Edmonton to a marine terminal in Burnaby, B.C., nearly tripling its capacity to 890,000 barrels of oil a day.
The Trans Mountain Corporation claims the economic benefits of the expansion would be $46.7 billion over the first 20 years.
While Sohi and Finance Minister Bill Morneau both insisted last week that no decision has yet been made, Sohi seemed to hint in question period on Friday that the project will go ahead.
“We are following the direction of the Federal Court of Appeal to move forward on this project in the right way,” he said.
Morneau’s office insists people should not read anything into the fact he is scheduled to give a talk at the Economic Club of Canada in Calgary the morning after the TMX decision, where one of the themes is “helping the energy sector grow and prosper.” His spokesman said the speech is similar to one Morneau has delivered in Ontario and Quebec in the last three weeks.
Alberta Premier Jason Kenney thinks it’s a done deal, even though his government launched a $1.6 million advertising campaign in Ottawa in late May demanding the federal government “say Yes to TMX.” The campaign includes having a box truck with electronic billboards driving around Parliament Hill all day long.
“After all, the federal government bought the pipeline, and I can’t imagine why they would do that only to flip-flop on an earlier approval,” he said last week at a major oil industry conference in Calgary.
His confidence was buoyed by media reports that steel pipe that will be used to build the pipeline has already started arriving on construction sites. Trans Mountain Corporation, the federal crown corporation that now runs the existing Trans Mountain pipeline and will oversee the expansion should it go ahead, said last week that much of the material had been ordered before the court ruling.
The pipeline is a tough needle for the Liberals to thread when it comes to supporting industries like the oil sector while meeting Canada’s international commitments on climate change. Prime Minister Justin Trudeau has said that approving it is in the national interest to take advantage of the economics of developing Canadian resources, which he says will continue to be needed for another few decades.
But that thinking riles environmental groups, many of whom supported Trudeau in the 2015 election because of his climate plan — a plan they say is impossible if Trans Mountain goes ahead. There are already plans to launch new court challenges if the project is approved, and multiple protests and even blockades on construction sites are in the works.
Green Party leader Elizabeth May held a press conference in Ottawa on Friday, joined by environmentalist David Suzuki, to plead with the government not to proceed.
“You can’t negotiate with the atmosphere,” she said, noting the international scientists who say the world has a window of just over a decade at most to drastically reduce greenhouse gas emissions before climate change becomes irreversible and catastrophic.
“To get through that window we cannot approve a single additional pipeline,” she said. “To get through that window we have to start aggressively moving off fossil fuels.”
May also said there is no economic case for expanding the pipeline, and the customers in Asia that are supposedly going to buy the product don’t exist. The Asian market has no refineries currently capable of refining the diluted bitumen Canada produces, she said, and much of it will end up still going to the United States.
First proposed by Kinder Morgan Canada in 2013, the project has been beset by multiple court challenges and delays, both during the Conservative government’s tenure and since the Liberals took over. The federal cabinet initially approved the project in November 2016.
The biggest hitches came after the NDP was elected in British Columbia in 2017, on a platform that included opposition to the project. The political uncertainty that created gave investors such cold feet Kinder Morgan was ready to walk away. In May 2018, Canada stepped in to buy the existing pipeline, with plans to expand it and then sell it back to the private sector.
Three months later, the courts threw a significant wrench in that plan when the approval was overturned.