Alberta’s premier says the Trans Mountain pipeline expansion “has more certainty,” after the federal finance minister announced plans to buy the project Tuesday morning.
On Tuesday morning, Finance Minister Bill Morneau announced Ottawa would spend $4.5 billion to buy the pipeline expansion, and all of Kinder Morgan Canada’s core assets.
Morneau said in return, the company will move forward with its plan to twin the pipeline this summer, while the sale is finalized, which is expected to happen in August.
When the sale is finished, Canada will continue construction on its own, with plans to eventually sell it all in the future once market conditions improve.
The options were presented during an early-morning cabinet meeting before ministers made a call on how to proceed.
In a tweet, Premier Rachel Notley called the announcement “a major step forward for all Canadians.”
"We are pleased to have worked with the federal government to ensure construction resumes, certainty is increased and Albertans and all Canadians enjoy the many benefits of having the project go forward," Notley said in a statement. "There is more work to do, but we will not stop until the job is done."
The news came days ahead of a May 31 deadline set by Kinder Morgan Canada – the company stopped investor spending and suspended non-essential activities related to the project in an announcement on April 8.
That decision followed months of uncertainty, after the B.C. government proposed restrictions limiting increases to the transportation of diluted bitumen into the province.
On Tuesday, B.C. Premier John Horgan vowed to continue to fight the pipeline in court.
“I will continue to do my best to protect B.C.’s interests, by ensuring that our cost, our water and our land is kept pristine,” Horgan said.
That decision prompted the Alberta government to call an emergency cabinet meeting to come up with a response.
The Alberta government responded with a short-lived ban on the import of B.C. wines, and the passing of Bill 12, legislation that would allow the Alberta government to “turn off the taps” for oil imports to B.C.
The pipeline expansion is expected to triple the amount of Alberta oil transported to the west coast and to overseas markets.
Financing for this purchase will come from Export Development Canada. The purchase includes the pipeline, pumping stations, and rights of way along the route. The 1,100 km expansion stretches between Edmonton and Burnaby, B.C.
The plan echoes how the federal government financed and managed shares in General Motors and Chrysler in 2009 during the financial crisis. A new Crown corporation will be created to manage the project.
The Alberta government has agreed to cover any unexpected costs that arise during construction. The province said it had pledged up to $2 billion for the project if needed, but said it may not need to use any of those funds.
The deal needs to be approved by Kinder Morgan shareholders.
With files from Bill Fortier and The Canadian Press
