This was the green light. The Trans Mountain pipeline expansion will be built. There have been other court challenges, but the decision handed down Tuesday effectively settled the big one.
A lot of things will flow from that decision, both economic and political. This is a big deal.
There will soon be a conduit to carry Alberta oil to the Pacific ocean, where it can be shipped to Asia – so exports are not locked in solely to a U.S. market. If that does what it is supposed to do, and shrinks the discount on Alberta oil exports, it will be a boon to the province’s struggling economy, and Canada’s.
And by the time Prime Minister Justin Trudeau and his Liberals head into the next federal election campaign, they won’t have an unfinished TMX hanging over their heads. Ottawa might not even own it any more when the 2021 (or 2022) election comes.
Trans Mountain, Trudeau and First Nations: A guide to the story so far
One thing that comes with the Federal Court of Appeal’s decision is that a whole bunch of risk has been stripped away from the pipeline expansion project. That means that the financial value of the Trans Mountain project has suddenly increased, perhaps by billions.
If Ottawa wants to sell the pipeline, buyers will now line up. What the Liberals really want is an Indigenous-led consortium to buy the thing, and now potential Indigenous bidders should be able to find financing a lot more easily. Mr. Trudeau’s advisers believe that would flip political perceptions, so it is seen as a project that advances the economic interests of Indigenous Canadians, rather than one imposed upon them.
The decision certainly eased some domestic strains. The Liberal Natural Resources Minister in Ottawa, Seamus O’Regan, and Alberta’s United Conservative Premier, Jason Kenney, were suddenly saying the same thing: that big projects can be built in Canada.
In an uncharacteristic fit of magnanimity toward federal Liberals, Mr. Kenney said Alberta “appreciated” that the feds had bought the pipeline and conceded the conspiracy theory that the Liberals had purchased the pipeline in order to kill it was untrue.
Peace in our time!
Okay, not quite.
There’s still the likelihood the latest ruling will be appealed to the Supreme Court. The top court likes to hear major cases of evolving Indigenous law, so it probably will, and that will take months. But the Federal Court of Appeal issued a unanimous decision backed by written reasons that rang with certainty. The same court blocked TMX in 2018 when it ruled that the federal government had not adequately fulfilled its duty to consult First Nations, and sent the feds back to repair the flaws. After another round of consultations, the court ruled Ottawa adequately consulted First Nations, even though it had not resolved all of their objections.
One thing is for sure: The tension between oil patch projects and the desire to reduce greenhouse gas emissions – and between Alberta and Ottawa – will be back. Soon.
Next up is the Teck Resources’ Frontier mine, a mammoth oil sands project. Mr. Kenney’s government has treated approval of that project as a line in the sand, and a decision that will provide proof of whether Ottawa is encouraging the province’s resource sector or curbing it. There will be others to follow.
But the federal Liberals also know they will take a beating from voters if they approve those projects without showing they are dealing with climate change – they took hits for buying TMX in last fall’s election campaign, notably in Quebec.
Now, the Trans Mountain decision puts the Liberals in a new position on that, too. The Liberals will argue they are delivering on the project that matters most to Alberta’s economy – a pipeline was Mr. Kenney’s No. 1 priority, after all. Before they approve other big projects, they will be seeking something from Alberta’s government – an eventual cap on emissions, or some strong signal to the province’s most important industry that there has to be a path to clean growth.
The political bargain is a little different now, after Tuesday’s court decision. Mr. Trudeau’s Liberals will expect Alberta’s government to take a political step in return, as they argue they have delivered a big win for the province’s key industry. It won’t win Mr. Trudeau’s Liberals a lot of seats, but it will get the weight of owning a stalled pipeline off their backs.