Federal Finance Minister Bill Morneau says Ottawa is not seeking to make a profit when it sells the Trans Mountain pipeline, and is instead focused on his government’s goal of making sure the expansion project is actually built.
And while Mr. Morneau has said Ottawa would own the pipeline only for as long as it takes to reduce the risks associated with the $7.4-billion expansion, on Wednesday he also called a sale of the pipeline, which brings oil sands products from Alberta to the B.C. coast, to private entity a long-term proposition.
“We’re not seeking to make a profit. We’re seeking to ensure the project gets done,” he told reporters in Calgary.
“We’ve also said that our long-term preference is that it’s in the private sector, so the challenge would be what timing is most appropriate to meet the goal of getting the project done,” he said when asked when a sale might happen.
“We’ll be listening to potential bidders in the near term to ascertain whether that will provide us with project certainty and a financial deal that’s appropriate for Canadians.”
Earlier, speaking to a receptive business crowd in Calgary one day after his government announced that public dollars will be used to buy Kinder Morgan Canada Ltd.’s pipeline and the associated expansion for $4.5-billion, he said the move was never the government’s first choice. However, political uncertainty around the project because of opposition from the B.C. government, environmentalists and some First Nations was a challenge the private sector could not overcome. The government’s goal, he said, is getting it completed – and the thousands of jobs and the economic activity it will entail.
“We are in a situation where we are putting forth a decision to make something happen in an exceptional way for a project that, let’s acknowledge, is pretty unique. It’s been many, many years since we’ve had a pipeline that’s gotten to tidewater,” he said.
“We don’t see this as a symbol of the way to get things done in our country. What we see in this is an example of the need for us to step in when things are difficult.”
Just two weeks ago, Mr. Morneau had spoken publicly about providing an indemnity to the U.S.-based Kinder Morgan to ensure the expansion was completed. But on Wednesday, he said it became clear this month that buying the pipeline was the remaining option.
“That was clearly not our first, best alternative.”
Kinder Morgan will operate the expansion project until the sale closes in August. That means it will be responsible for work, including managing protests and safety issues on B.C. construction sites through the summer, Mr. Morneau noted.
No potential bidders have said they would consider taking on the legal, political and environmental risks of the expansion.
Still, there was a sense of relief in Calgary on Wednesday. The oil-and-gas sector does not see Ottawa’s purchase as a guarantee the project will go forward, but as a step in the right direction. Other than a few protesters who interrupted Mr. Morneau’s speech saying a “climate crime” shouldn’t get a bailout, Mr. Morneau received a warm reception.
But concerns linger. Chris Bloomer, head of the Canadian Energy Pipeline Association, an industry lobby group, says any new pipeline projects face ambiguity about what Canada’s regulatory environment will be. The energy sector believes the Trudeau government’s effort to overhaul Canada’s environmental laws, creates massive uncertainty for future projects.
“We have to reflect on the fact we didn’t need to be here,” Mr. Bloomer said of the government’s pipeline purchase. “Companies still need a regulatory process that has clarity and certainty. And we don’t think we’re going down a path where that is the case.”
The federal Liberals have a significant political challenge in making their case in Alberta, where Conservatives rule the polls and some wonder whether the Trudeau government can reconcile its strong green push with Canada’s status as a fossil-fuel producer. But Mr. Morneau said on Wednesday: “The federal government is willing to step up. We do want to support the oil-and-gas sector.”