The federal government took its most decisive action yet in support of the Trans Mountain pipeline project by choosing to invest taxpayers’ money in the expansion to the tune of $4.5 billion for its purchase from Texas-based Kinder Morgan plus likely as much cost for incidentals involved in building the expansion from Alberta to the British Columbia coast.
Many Canadians have shown in opinion polls they agree with Prime Minister Justin Trudeau that building the pipeline is in the national interest as movement of Alberta bitumen to markets around the world will sustain thousands of jobs for years to come, both through construction and in the oil sector and drive tax revenues. Indeed, it seems prudent that this country should exploit the resources it has for the benefit of the economy — though there’s an argument to be made that Canada could create wealth in different ways by establishing its own refining industry instead of shipping crude to expanding markets.
Trudeau and his government are making a bold statement about their belief in this project, particularly since they campaigned on protecting the environment and having a positive impact on climate change.Will this government remain as committed to the project in the face of further political protests, lawsuits, and disagreements with Indigenous communities fearful of the potential for spills on their land? It’s one thing to exert federal leadership and jurisdiction to get parties together and negotiate the passage of a pipeline, but it seems quite another thing to have the largest stake invested in that project. The political capital Trudeau has expended is significant. While he hasn’t enjoyed much support from Alberta — perhaps until now — much of the base that got the his Liberal government elected could easily be risked ahead of 2019.
It’s hard to see any going back on the purchase now — and that’s a risky investment for taxpayers if delays or legal hurdles put the pipeline’s completion in jeopardy. If Kinder Morgan was willing to walk away from a moneymaking venture, will there be any guarantee the feds can sell the project as anticipated? Given some have suggested the move to proceed under the guise of a Crown corporation was to effectively remove questions of jurisdiction that dogged the private sector. Canadians will have to believe the government will need to have a continued stake in the build until its substantial completion. Maybe, then, they’ll have a tangible asset that they’ll be able to sell at a profit or maintain as a revenue stream. Until then, it’s hard not to think of the investment as risky business with doubt whether taxpayers will be rewarded.
There’s no doubt the fall out from Tuesday’s deal will be closely scrutinized on all sides for years to come as another chapter in an already polarizing dispute between British Columbia, Alberta, and Ottawa. It could well define this government’s term in office one way or the other. Either Trudeau and his cabinet will look like heroes for pushing on a needed economic project or like goats for sacrificing their principles while risking environmental damage and taxpayer loss. Either way, they’re now largely in control of their destiny and they’ve made a choice.