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The head of Canada’s third-largest bank is warning that cancellation of the Trans Mountain pipeline project would be damaging to the country’s economy and competitiveness.

Brian Porter, the chief executive officer of Bank of Nova Scotia, called the planned $7.4-billion pipeline expansion “very important” to Canada. And he urged the parties steering the project to surmount the current roadblocks and move forward.

The company behind the proposed Trans Mountain expansion, Kinder Morgan Canada Ltd., has issued a tough set of demands to be met by May 31 as conditions to proceed, leaving the federal and Alberta governments scrambling to find a solution. Scotiabank is one of several banks committed to financing the project, despite objections from environmental groups as well as threats of obstruction from the B.C. provincial government.

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Speaking to reporters after the bank’s annual meeting of shareholders on Tuesday, Mr. Porter reiterated Scotiabank’s support for “thoughtful energy development,” stressing the energy sector’s importance to “some people’s standard of living.”

“We think it’s really important that this project goes ahead," he said. "I think that it’s important to look at the cost of not doing these things for the Canadian economy in terms of GDP and what it means for per-capita income of people in Canada. And we’re going to lose our competitive advantage on a number of things. Canada has a productivity issue; it has a competitiveness issue.”

A worker walks past heavy equipment as work continues at Kinder Morgan's facility in preparation for the expansion of the Trans Mountain Pipeline, in Burnaby, B.C., on April 9, 2018. The Houston-based company announced on Sunday that it has suspended all non-essential activities and related spending on the pipeline expansion that would carry Alberta bitumen to an export terminal near Vancouver.

DARRYL DYCK/The Canadian Press

Some sectors − notably technology, where investments in artificial intelligence are rising fast and creating well-paid jobs − are "running very well," Mr. Porter said. “I’m concerned about the resource-based economy.”

At Scotiabank’s annual meeting, a representative from shareholder Harrington Investments, Inc., a California-based firm focusing on “socially responsible investments,” raised concerns related to Scotiabank’s financing of the Trans Mountain project, as well as its lending to companies backing other pipelines. And in late March, Toronto-Dominion bank CEO Bharat Masrani responded to criticism from environmental groups over its involvement with the Trans Mountain plan by vowing to continue financing energy projects, as a recent report showed a dramatic increase in banks’ exposure to the oil sands in 2017.

Mr. Porter notes that the Trans Mountain project has National Energy Board approval, and has been through a “rigorous process” including consultations with Indigenous peoples. He also cited unspecified data to suggest that pipelines are a safer way to transport oil and gas than rail, road and sea, and lamented years of false starts on major energy projects.

“So yeah, I’m disappointed. I don’t know how many tens of thousands of miles of pipelines have been built in the U.S. while nothing’s been accomplished here,” he said. “I think that, particularly for people in Alberta, Saskatchewan and parts of British Columbia that are in the oil-producing regions, for that business, this is really tough stuff. Because we’ve been talking about it as a country for a long period of time and nothing’s been done.”

Kinder Morgan is suspending work on the Trans Mountain pipeline expansion and is citing B.C.’s opposition to the project as one of the reasons. Alberta Premier Rachel Notley is threatening economic retaliation against B.C. The Canadian Press

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