Finance Minister Bill Morneau’s promise to indemnify Kinder Morgan against the political games of the British Columbia government can be seen two ways.
On the one hand, Wednesday’s announcement puts the ball back in Kinder Morgan’s court as it ponders the future of the Trans Mountain pipeline expansion project.
The Texas company suspended the project last month and says it will abandon it outright on May 31 if B.C.’s minority NDP government is still working to undermine it.
By offering to cover costs applicable to B.C.’s delay tactics, Mr. Morneau may have bought more time. So far so good.
But the other way to look at Mr. Morneau’s offer is as an admission that Canada’s ability to develop its resources is so vulnerable to political disruption that the only way Ottawa can secure investors is to insure them against this risk.
Ideologies aside, expanding the Trans Mountain pipeline is a no-brainer. It is of national interest, it has been reviewed by the appropriate federal body and approved by Cabinet, and the company has met or is in the process of meeting all the conditions placed on it.
As well, a strong majority of Canadians, British Columbians included, support it. The B.C. government itself approved the project in 2017. And the majority of Indigenous communities along the project’s path have signed agreements with Kinder Morgan that will protect their territories and bring them much-needed income.
Above all, Ottawa has clear jurisdiction. And yet a project it has approved is now at risk of being cancelled because of interference from a provincial government.
B.C. Premier John Horgan knows it is unlikely that his challenge to Ottawa’s authority will succeed, but he also knows that a series of delays and a climate of uncertainty could prompt Kinder Morgan to move on.
Mr. Morneau’s response is to tell the world that, if you invest in Canadian resources and infrastructure, Ottawa will insure you against the risk inherent in an approvals system that can be made moot by grandstanding politicians.
Given the approaching deadline, this was probably Ottawa’s best option. But it doesn’t put Canada in a good light.