ANNOUNCEMENT 29 May 2018

The federal and provincial governments are supporting an oil pipeline with purchase and guarantees.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 29 May 2018 | Removal date: open ended

Capital injection and equity stakes (including bailouts)

Finance Minister Bill Morneau and Natural Resources Minister Jim Carr announced on May 29, 2018 that the government of Canada will buy Kinder Morgan Canada Ltd.’s Trans Mountain pipeline for Can.$4.5 billion (U.S.$3.5 billion) “in order to secure the timely completion of the Trans Mountain Expansion Project.” An unspecified level of federal loan guarantees will ensure that construction continues through the 2018 season. They announced that this is a temporary measure:

It is not, however, the intention of the Government of Canada to be a long-term owner of this project.  At the appropriate time, Canada will work with investors to transfer the project and related assets to a new owner or owners, in a way that ensures the project's construction and operation will proceed in a manner that protects the public interest.

The pipeline is to run from the oil sands of Alberta to a port in the Pacific province of British Columbia, and will allow sales of Canadian crude to foreign markets other than the United States at higher prices.

The project remains a matter of intense controversy for environmental reasons.

On August 30, 2018 the Federal Court of Appeal halted the construction of the Trans Mountain Pipeline Expansion, finding that the environmental assessment (EA) process was flawed and that the federal government failed to engage meaningfully with Indigenous groups. "The decision of the Federal Court of Appeal means that the NEB CPCN has been nullified," accorind to one legal analysis, "and all construction activity must cease in a manner that minimizes environmental impact. All regulatory processes directly related to the Project have also been halted." Work cannot resume (if at all) until a new EA is approved. 

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 29 May 2018 | Removal date: open ended

Loan guarantee

The province of Alberta will provide support in the form of a backstop that would be called upon in unforeseen circumstances. “Alberta’s contribution would range from zero to a maximum of $2 billion,” according to a provincial press release, “and would be payable only upon completion of the project. If Alberta’s backstop is called upon, Alberta will receive equity in the completed project.” Can$2 billion is equal to US$1.55 billion.

 
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