Trans Mountain pipeline will have 'Crown immunity': Notley

Live: Feds to spend $4.5 billion to buy Trans Mountain pipeline, B.C. terminal

Live: Feds to spend $4.5 billion to buy Trans Mountain pipeline, B.C. terminal

The Government of Canada has reached a deal with Kinder Morgan to buy the highly contested Trans Mountain Pipeline. During or following construction of the expanded pipeline, which is expected to take about 2.5 years to complete, Canada will monitor the markets and seek out future investors interested in taking on the entire project once it is done.

"We view the announcement as negative for entities considering large resource-focused capital investments in Canada such as LNG, pipelines or oilsands projects, given the inability for the rule of law and regulatory approvals to allow projects to move forward", GMP Securities analysts led by Robert Fitzmartyn said in a note to clients.

Calling a controversial pipeline expansion "a vital project in the national interest", Canadian Prime Minister Justin Trudeau says his government is buying the Trans Mountain pipeline to ensure that the expansion is built, despite protests from environmentalists and other groups.

The plan - similar to how Canada financed and managed shares in General Motors and Chrysler in 2009 during the financial crisis - will include a new Crown corporation to manage the project. While in Alberta's case the goal is getting oil to tidewater, in Newfoundland and Labrador it's removing barriers to offshore oil and gas development.

"It does not change the course that the government of British Columbia has been on since we were sworn in in July of 2017", Horgan said.

"Now we're committed to building the expansion, but they have not announced at all how they are going to finance the expansion", said May.

British Columbia insists the sale of Kinder Morgan Inc.'s pipeline to Canada's federal government won't sway its opposition to a project seen as a lifeline to the nation's oil industry.

The Trans Mountain project is created to increase capacity of the 65-year-old pipeline from Edmonton, Alberta, to Burnaby, B.C., from 300,000 to 890,000 barrels per day.

Notley says there is more certainty around the project than there has ever been and she doesn't plan to use her province's legislation to regulate the flow of oil exports for now.

If any government did something right it was B.C., said May, backing the actions of B.C. Premier John Horgan.

Under the agreement between the federal government and Kinder Morgan, the company would resume construction on the project, which was put on hold in April. But it's awful news for Canadian taxpayers who will ultimately have to bear the cost.

As for serving the broader national interest, as the Finance Minister claims, Canada's strategic interests do not rest with feeding more cheap feedstock to U.S. West Coast refineries and then buying back refined products at a huge price spread.

With the pipeline now under federal control, Horgan was asked about where his government challenge goes from here. If Alberta simply upgraded what it sent through the Trans Mountain pipeline into oil, the existing pipeline's capacity, as well as that of all other pipelines that service the oil sands, could be boosted by a third.

Despite his vocal support for the project, Moe said Saskatchewan will not pick up the tab for any construction costs because the project carries Alberta oil.

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