Canadian government to buy troubled Trans Mountain pipeline

Live: Feds to spend $4.5 billion to buy Trans Mountain pipeline, B.C. terminal

Federal Finance Minister Bill Morneau announced today that the Canadian Government is spending $4.5 billion to buy all the assets from the project, and has also guaranteed financing for the company to start construction immediately.

"So our message today is simple: when we are faced with an exceptional situation that puts jobs at risk, that puts our worldwide reputation on the line, our government is prepared to take action", he said.

Canada's federal government said Tuesday it is buying a controversial pipeline from the Alberta oil sands to the Pacific Coast to ensure it gets built.

A new Crown corporation will be created to manage the project.

While Mr. Morneau claimed the pipeline is the safest and most effective way to get natural resources to world markets, the truth is there is little, if any, demand for oil sands bitumen in Asia.

"Tens of thousands of B.C.jobs depend on pristine coastal and inland waters", said Horgan.

Under the plan, revealed Tuesday by federal Finance Minister Bill Morneau, Kinder Morgan will go ahead with its original plan to twin the pipeline this summer while the sale is finalized.

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Indigenous leaders, who have been at the forefront of a grassroots campaign against the Trans Mountain project, have vowed that the pipeline "will never be built".

"Governments do a lot of things right, but running businesses is probably not near the top of the list", Wall said.

"To investors considering Canada as a place to build big, important, transformative projects like the Trans Mountain expansion, we want you to know that you have a partner in Ottawa", Morneau said.

Alberta will contribute up to C$2 billion toward unforeseen costs, payable once the project is complete, Premier Rachel Notley said.

"Prime Minister Justin Trudeau is making a historic mistake in buying the doomed Kinder Morgan project", Adam Scott, senior adviser at Oil Change International (OCI), said in a statement denouncing Trudeau's decision, which comes just weeks after fierce opposition from Indigenous groups and environmentalists forced the oil giant to halt construction operations. If taxpayer dollars are going to be used to support Alberta's flagging oil sands industry (and the province has paid enough in equalization payments to deserve getting something back in return), why not use it in a way that brings them and other Canadians the greatest net benefits?

Presumably, the cost to the new owners - us - will be about the same. "We've agreed to a fair price for our shareholders and we've found a way forward for this national interest project", he told a conference call with financial analysts. Projects require clarity and predictability, and once approved should not be subject to costly delay tactics that thwart Canada's economic and social prosperity.

Until now, Trudeau's government has used a soft tone to try to convince British Columbia to abandon its opposition to the pipeline, hoping not to alienate voters in the province before next year's general election. A lack of capacity in pipelines or in rail cars to ship oil produced in Alberta is also hurting Canada's energy sector.

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