Parliament was outraged when the Liberal cabinet approved an incredibly controversial plan to spend $4.5 billion to purchase the Trans Mountain pipeline project from the current owner Kinder Morgan, who is bailing on the project entirely. In 2007, the company paid only $550 million to acquire the pipeline assets and through the government has said they paid "fair value" for it, it's impossible to tell.
Completing the expansion of the line to triple the capacity will cost an additional estimated $7.4 billion, bringing the total cost up to $12 billion or more.
Finance Minister Bill Morneau announced the details of the agreement with Kinder Morgan at a news conference, framing the purchase as financially necessary to ensure a vital energy infrastructure piece gets built. However, Conservatives slammed Trudeau for being forced to nationalize a oil pipeline because he couldn't provide certainty to international energy investors.
More than 700 businesses in British Columbia have signed a petition asking the Premiere to continue resisting Prime Minister Justin Trudeau's government's decision to purchase the pipeline, citing environmental and economic concerns.
By going all-in on the project, Trudeau is betting his government's future on it, and marks this as a defining and pivotal position in his career. Ottawa does not intend to be a long-term owner and the government has so far declined to provide cost estimates for the pipeline. This will also act as a test to manage and finish a resource project of this size, but if it gets sidelined or changed, could hinder federal authority and credibility.
“We believe this is the best way to protect thousands of well-paying jobs and the safest and most effective way to get our resources to world markets,” Morneau told the press.
The rush to sign an agreement began in April when Kinder Morgan threatened to provide assurance that the company would face no opposition to building through BC, with the company facing backlash in the City of Burnaby and across the province. Indigenous groups are also protesting the pipeline over the recognition of human rights throughout the country.
It has already been approved through a review process by both the federal and BC government (prior to anti-pipeline NDP Premiere John Horgan being elected) and Ottawa has put strict new rules in place to protect against spills from tankers. The government is pegging this as "an investment in Canada's future" but that makes it odd that the private sector is not interested in the opportunity. Politically, taking on a pipeline trivializes Trudeau's promises in regards to the environment and Indigenous people .
This is an incredibly big moment for the government and will prove that our government is capable of handling such projects if it succeeds, and just goes to show that Trudeau is willing to take things into his own hands.