The Canadian government has made a $4.5 billion pledge to purchase the Trans Mountain pipeline. The Trans Mountain pipeline is an extension of an existing pipeline that takes crude oil from Alberta and sends it to British Columbia. The Alberta oil can then be sold in international markets.
A little bit of background as to how the Trans Mountain pipeline went from being a Kinder Morgan project to being owned by the federal government. John Horgan, the leader of the BC NDP, became premier on July 18 of last year after forming an alliance with the Green Party of BC. In order to maintain the support of the Green Party, Horgan vowed to fight the Trans Mountain pipeline extension. He has mainly done this by asking the Supreme Court if BC has the right to block bitumen shipment over its borders.
Alberta, led by Alberta’s NDP Rachel Notley, was none too pleased about all of this. Alberta, fighting back against BC, recently passed Bill 12. This bill would allow the Albertan government to throttle the supply of oil exports to BC. This would have the potential to raise BC gas prices by ten cents a litre. The BC government in response filed a constitutional lawsuit. Notley, noting the irony in this situation quipped “It’s very interesting, on one hand they don’t want our oil and on the other hand they’re suing us to give them our oil.” In February, Alberta temporarily blocked BC wine exports.
In light of this backdrop, Kinder Morgan, the company behind the pipeline set a May 31 due date for a conclusive decision to be made about whether pipeline construction can continue. In response to this, the Canadian government bought the pipeline off of Kinder Morgan and are planning to run it in a Crown corporation, until a full-time owner could be found.
A lot is at stake here. Politically, Notley needs the pipeline to be continued or risks appearing weak compared to Jason Kenney, leader of the United Conservative Party, in the 2019 Alberta election. Trudeau for his part needs to show national unity, while simultaneously balancing environmental concerns and Indigenous People. With the election coming up next year, Trudeau is putting his government on the line over the pipeline.
Reactions of the respective premiers are what you’d expect them to be. Premier Notley was jubilant proclaiming to all Albertans, “Pick up those tools folks, we have a pipeline to build.” Premier Horgan maintained that a change of ownership did not change his environmental concerns. He reiterated that he was still pursuing the lawsuit against Bill 12, in addition to seeking a ruling from the Supreme Court.
Andrew Scheer, the leader of the federal Conservatives, was not pleased that Trudeau bought the pipeline. He claimed that “the Prime Minister is forcing Canadian taxpayers to pay for his failure,” and that Justin Trudeau “is trying to buy his way out of a problem.” This raises an important question: was the buy-out necessary to keep the project alive or an expensive bailout? Time will tell.