Feds spending $4.5B to buy Trans Mountain pipeline

[Berry Sweet]

Something tells me that your fuel costs, that were already outrageous, will get even higher when the governmewns the pipeline...

That's what I was thinking.  Canada always screws it's own citizens.  Most likely they will Jack up the cost in Canada and sell it for cheap elsewhere...its the Canadian way....svrewing their citizens up the ass day by day.  Completely expected.

It would have been much better and cheaper if Kinder Morgan had built it, but Ottawa didn't want to enforce the law.

JT is a poor excuse of a PM.  Canada does nothing to protect its citizens...the laws are pathetic..the justice system even more so.  You have more rights if you are a criminal or do something illegal.

[Anonymous]

Something tells me that your fuel costs, that were already outrageous, will get even higher when the governmewns the pipeline...

That's what I was thinking.  Canada always screws it's own citizens.  Most likely they will Jack up the cost in Canada and sell it for cheap elsewhere...its the Canadian way....svrewing their citizens up the ass day by day.  Completely expected.

It would have been much better and cheaper if Kinder Morgan had built it, but Ottawa didn't want to enforce the law.

JT is a poor excuse of a PM.  Canada does nothing to protect its citizens...the laws are pathetic..the justice system even more so.  You have more rights if you are a criminal or do something illegal.

I don't put much faith in politicians to put the public interests ahead of electoral advantage.

[Berry Sweet]

It's ok to do anythjing illegal on Canada cause all you get is a slap on the wrist.

[Anonymous]

I was watching the premier of Alberta high-fiving her cabinet. Kinder Morgan pulling out is nothing to celebrate. This taxpayer bailout is a fiscal Hail Mary pass thrown in a messy situation caused by Trudeau and supported by the Alberta NDP.

[Anonymous]

By Kenneth Green



Pipeline will benefit Canada but at a very steep cost



Finance Minister Bill Morneau announced that the federal government will buy the Trans Mountain Expansion project (TMX) for $4.5 billion.



The government plans to operate the construction of the pipeline through a Crown corporation, with an expectation of selling it or otherwise transferring ownership of the pipeline in the future.



The TMX project will nearly triple the capacity to move oil from Alberta's oilsands to a tidewater port in Vancouver, netting higher prices for Canadian oil and breaking our dependence a single foreign buyer — the United States — for our oil resources.



Because of that single market, which buys our oil at a discount, Canada's energy sector will lose some $16 billion in 2018 compared to selling oil into higher-priced markets.



The Trans Mountain expansion will change that dynamic.



The Conference Board of Canada estimates the pipeline will create 53,000 jobs per year over in its first 20 years.



It also estimates that federal and provincial governments would rake in $18.5 billion over that time.



While the federal buyout might salvage some of the expected value of the project, the nationalization of the project is far from an ideal solution.



In reality, it's an admission that Canada's regulatory approval process for major infrastructure programs is profoundly broken.



The federal proposal turns what should have been a private project — risking private funds to generate private earnings — on its head.



Instead, taxpayers will take the risk of failure should the project's building costs exceed budget, and/or projected future earnings not pan out as expected.



It's also unclear who will reap the benefits, as the government has not specified who will buyout the project once it's completed.



Minister Morneau mentioned the potential for First Nations to assume ownership, or the Canadian Pension Plan, but details were not offered.



So it's partially good news that the Trans Mountain expansion pipeline may actually be built.



But again, the nationalization of the project sets a deeply troubling precedent.



[size=150]Having Ottawa step in with taxpayer money, essentially dropping all of the project risk on the public, sends a terrible signal to private markets that might want to invest in energy infrastructure in Canada.

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The message is that, like Kinder Morgan, a firm might propose a project, spend billions on it, fight for it for five years, get approval from one of the world's most rigorous environmental approval processes, face numerous legal and extra-legal hurdles to executing the project, and still, at the end of the day, need to be bought out by the federal government.



Who would rationally think of investing their money in such a situation?



It's absolutely critical that Canada find a way to fix a badly broken regulatory approval system.



While the TMX is needed, it would have been far better if the normal order of good governance had worked.



In a healthy regulatory system, a company proposes an activity, it's deemed safe by a reputable governmental entity, approved by the government, and gets built.



That's how the Canada we live in today got built. That's not Canada today. The Trans Mountain pipeline will certainly benefit Canada, but it's a benefit with a very high price. The precedent that nationalizing the pipeline sets will create dynamics that will ripple through Canada's economy.



But it's hard to see that any company will step forward to invest in Canada's natural resource sector. We must do better.

[Anonymous]

Although far from ideal, this probably as good as it gets in Canada.



Is there any chance of Energy East being revived or is that too risky politically for Trudeau?

[Anonymous]

Justine and Notley wanted this pipeline in the worst way possible and they both handled it in the worst way possible.

[Anonymous]

Although far from ideal, this probably as good as it gets in Canada.



Is there any chance of Energy East being revived or is that too risky politically for Trudeau?

As long as True Dope is pm, not a fucking chance.

[Anonymous]

Although far from ideal, this probably as good as it gets in Canada.



Is there any chance of Energy East being revived or is that too risky politically for Trudeau?

As long as True Dope is pm, not a fucking chance.

There doesn't seem to be much confidence in investing in Western Canada's resource sector the past few years..



And it's a self inflicted wound.

[Anonymous]

Here's why I have my doubts about this project ever shipping a single barrel of crude to Asia.



By Lorne Gunter

Since Ottawa announced it was taking over, it has neither scared nor inspired anyone to change course. For instance, the B.C. government has not backed down from a single challenge it has launched against Trans Mountain.



So just what signs might prove the Trudeau government truly is serious about getting the Trans Mountain Expansion built and carrying bitumen to the West Coast?



The feds could pass a law asserting their constitutional authority over the interprovincial movement of goods — including oil in pipelines.



Back in April, after he'd met with Alberta NDP Premier Rachel Notley and B.C. NDP Premier John Horgan, Prime Minister Justin Trudeau promised such a law, but to date one has not been introduced in Parliament.



Trudeau doesn't even have the conviction to say, firmly, that Ottawa has constitutional jurisdiction over pipelines.



No law and no statement shows he's not really serious.



The feds could launch their own constitutional reference in the courts to counter the reference B.C. launched in late April. More importantly, while B.C.'S reference is only to that province's court of appeal, the federal government could go directly to the Supreme Court.



That would end all the legal wrangling once and for all, but that assumes the federal Libs are serious about ending the wrangling.



Ottawa could have federal prosecutors take over the cases against protesters at Kinder Morgan's Burnaby site, too. The B.C. attorney general's office has refused to charge the protesters criminally and take them to court, so the company has been left to pursue civil prosecutions.



But now that Ottawa owns Trans Mountain and since many of the protesters could be charged with criminal offences, Justice Canada could and should intervene to take the defendants to criminal court. They will federalize prosecutions, if the Trudeau government is genuine about getting this pipeline built.



The Trudeau government could also call on the RCMP to arrest protesters, squatters, vandals and eco-terrorists who attempt to disrupt construction. If needs be, it could call out the army. But can anyone truly imagine the Trudeau government standing up to First Nations protesters blockading the right-of-way? Or even a gaggle of Vancouver hipsters who have paddled out into Burrard Inlet and chained their kayaks to the Kinder Morgan pier?



In a more general sense, to prove they are serious about getting Canada's energy sector moving again, the Liberals could stop implementation of their carbon tax and end their attempt to establish a new Impact Assessment Agency. Both place so many obstacles in the way of new pipeline or resource projects that they are scaring away private investors.



But I suspect the Liberals will do none of these because they are not truly serious about Trans Mountain.



I hope I'm wrong. I hope the Liberals prove to be aggressive pipeline owners.



However, I think all of this is a delaying tactic to get the Liberals past next fall's federal election, and the only thing they're serious about are the electoral calculations that get them re-elected.

[Anonymous]

I read that this pipeline still won't get our oil to new markets in Asia..



The harbour is too shallow for super tankers that cross the Pacific to come into the lower mainland harbour.

[Anonymous]

[size=150]Pipeline purchase a sign of economic enfeeblement

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The Trudeau government's decision to spend $4.5 billion to acquire the Kinder Morgan pipeline must be a wake-up call for Canadians.



It's a sign that we've gone too far.



Consultations and regulatory processes have become disconnected from their initial purposes of informed decision-making.



[size=150]Project approvals and permitting are regularly subjected to lengthy delays and costly uncertainty that have nothing to do with the environment, science, or our economic interests.[/size]



We've enfeebled our economy as a result. The case of the Trans Mountain pipeline should bring this into stark clarity.



A private company wanted to invest $7.5 billion — more than half the federal government's annual infrastructure budget — in our country's energy infrastructure. It represented a substantial investment involving 15,000 construction jobs alone.



The company, by all accounts, followed the rules. It submitted a project application at the end of 2013. The National Energy Board recommended its approval in May 2016. The government accepted the recommendation — including 157 conditions — in November 2016. Kinder Morgan spent $1 billion going through the painstaking consultation and regulatory process.



And yet in spite of all this, the company ultimately decided the project wasn't viable due to ongoing policy and legal uncertainty. No other firm would touch it. Ottawa had no choice but to buy it.



How did we get to a point where a private company that abided by the process and sought to invest billions of dollars in our country was precluded from doing so?



How did we get to a point where public capital needed to replace private capital to finance a profitable project?



This isn't a nascent industry. It isn't a case of market failure. We already have 840,000 km of pipeline operating in Canada.



Most has been financed and constructed by private capital.



This is a case of government failure.



In fact, it's a failure by all of us. We've permitted a build up of government rules and processes that amounts to what conservative columnist George Will calls "economic enfeeblement."



The Trudeau government certainly contributed to the problem. Opportunistic critiques of the major project review process diminished public confidence.



Vague commitments about the United Nations Declaration on the Rights of Indigenous People raised the spectre of a First Nations "veto". New regulatory burdens exacerbated the already slow and cumbersome process. Notions of "social licence" were predictably used as a foil by ideological activists to stall progress.



This is all true. But the problem is bigger than one government, one pipeline, or one sector. It now permeates every level of government and crosses the economy.



One example: Condo and real estate developers in Toronto typically face nearly a year-and-a-half for approvals and spend an average of $46,570 per unit on compliance costs. The result is less housing supply and in turn higher prices at a time when people are rightly concerned about housing affordability.



Another example: federal, provincial, and local governments pledged funding for the Spadina subway extension in 2006 and yet the service only commenced more than 10 years later in December 2017 following various delays and cost overruns.



No wonder it represented the first new subway stops in decades.



The list could go on and on. The Trans Mountain episode is merely the most recent and highest profile example.



It should cause us to restore common sense to government decision-making and project reviews.



It's time to end the enfeeblement. We need to start building things again.

[Anonymous]

This would not have cost taxpayers one fucking loonie if Trudeau had did his job and enforced federal authority in the first place. Even now, with billions of taxpayer dollars at stake, he won't show leadership.

The federal government is said to be already shopping around the pipeline it bought this past Tuesday.



According to the Bloomberg financial news service on Friday, New York investment bankers, Greenhill & Co., who had been acting as financial advisers to the Trudeau government on the purchase of Kinder Morgan's Trans Mountain pipeline, have already sent out marketing materials to a select group of potential buyers.



People with inside knowledge of the federal Liberals' actions claim sales packages have been sent to other pipeline companies, pension funds and asset managers. Several Indigenous groups have also been approached.



The federal government is said to be confident a buyer can be found before the end of July and that Ottawa can turn a small profit on its investment.



Right. That ain't happening.



How likely do you think it is a private investor can be found in the next six to eight weeks, even though nothing has changed and no private buyer could be found in the past six to eight weeks?



The B.C. government has vowed to be just as obstinate as before and eco-activists are still determined to halt the line "by any means necessary."



So given that building Trans Mountain will be every bit as difficult for its next owner as it was for its previous one, Ottawa would have to sweeten the pot in other ways if it wants to offload this political albatross.



That could mean low, low, LOW pricing. "Yes, here at Honest Justin's used pipelines we have crazy, crazy CRAZY deals during our Summer Madness Sale!"



Or it could mean burdening taxpayers with any losses a new private owner might incur while B.C. and wellfunded environmental groups drag out their delaying tactics in court. When Ottawa tried to entice Kinder Morgan to stay in the game by offering to "indemnify" the company against such losses, the price tag for taxpayers was estimated at between $1.5 billion and $2.0 billion.



But what makes all this insider speculation most ridiculous is the Liberals' assertion that not only can they find a buyer, but they can find one who will give taxpayers a nice little return on investment. Fat chance. Does anyone other than Prime Minister Selfie truly believe Ottawa can find a buyer where Kinder Morgan could not? And that politicians can negotiate a shrewder deal? If no one wanted the pipeline last week for $4.5 billion, why would anyone pay $5 billion or $6 billion for it now? But no one should be surprised that the Trudeau government is being so self-delusional. After all, many of the faces devising federal pipeline, energy and environmental policy now were once employed at Queen's Park devising Ontario's disastrous — utterly disastrous — "green" energy policy.



Yes, Ontario got wind turbines and solar farms (but mostly more nuclear) in lieu of coal-fired power. However, in order to attract private investors to alternate energy projects, the Ontario provincial Liberals had to agree to pay way over market value for "green" power — in some cases up to 70% over for periods of 20 years.



The whole "green" energy fiasco has doubled Ontario electricity rates, scaring away businesses and adding at least $45 billion to Ontario's skyrocketing debt.



So it is not far-fetched to believe that the architects of the Ontario plan will, now that they have moved on to the Trudeau government in Ottawa, make a similar sweetheart deal with potential buyers just to get Trans Mountain off the feds' hands and claim a great victory.



Ottawa might find it easier to find a buyer if it cancelled its carbon tax or ended its push to analyze future energy megaprojects to death.



But don't hold your breath.

[Anonymous]

Trudeau also says federal legislation is coming that will "reassert and reinforce" the fact that the federal government is well within its jurisdiction to approve the project and ensure it goes ahead."



Whatever happened to that legislation? Where did that whole half of the equation go?



We know how the financial side of it went. Finance Minister Bill Morneau initially revealed on May 16 that he would "indemnify" Kinder Morgan for any financial hardships caused by Horgan's obstructionism. Basically, he was going to fork over taxpayer dollars to cover further sunken costs as the company awaited progress.





Kinder Morgan shrugged it off. "We are not yet in alignment," their press release said on the day. They reiterated that May 31 was their internally imposed deadline to decide whether to pull the plug on the project or not.



Then on May 29 — just less than two weeks after Morneau's offer and two days before the deadline – the Liberals revealed they reached a deal to buy the project for $4.5 billion.



Did they ever seriously discuss this promised legislation? If so, what was on the table and why didn't they go through with it?



[size=150]Senator Doug Black had a private member's bill that he put forward back in February that would have used two sections of the Constitution to declare the project "a work for the general advantage of Canada."



This would have given the project, while still owned by Kinder Morgan, a leg-up over a regular private sector project and allowed the feds to halt obstruction from municipalities and provinces.

[/size]

So clearly legislative options weren't pie-in-the-sky. There was already one on the table.



Why then, from the period of April 15 to May 29, did the Liberals not propose something, anything, resembling this? Since the Liberals have a majority, it's not like it would have needed to be passed and receive royal assent by that date to offer assurances that it would become a reality. It would have just needed to be tabled by May 31.



Although maybe the government did tell the company they were going to do something like this and the company said no, that they didn't believe this would be sufficient to ensure they could move beyond provincial and activist obstruction. If that's the case though, you'd think the government would have had a sense of this before making a public announcement pledging pending legislation.



[size=150]Unless legislation is still to come, and the government feels it'll be required no matter who runs the project, even the feds. If that's the case, there is an even greater reason to worry whether the feds actually can build the project after all.[/size]



As it stands, it looks as if they just dropped the ball on the legislative response and instead doubled down on throwing money at the problem.

http://torontosun.com/opinion/columnists/furey-whatever-happened-to-trudeaus-promise-of-legislation-for-trans-mountain">http://torontosun.com/opinion/columnist ... s-mountain">http://torontosun.com/opinion/columnists/furey-whatever-happened-to-trudeaus-promise-of-legislation-for-trans-mountain



Throwing money at a problem and hope it disappears. That's the Trudeau way.