Sweeping regulatory reform looms over resource sector, evoking NWT pipeline’s fate
I happened to cut my teeth as a biologist on the Mackenzie Valley pipeline. There are communities in the western Arctic that are impoverished because that pipeline wasn’t built due to an environmental process that ran amok and actually killed investment … this is exactly what your government is doing.
– Conservative MP Robert Sopuck to Environment minister Catherine McKenna during last year’s committee deliberations on Bill C-69
The fiscal update from Finance Minister Bill Morneau’s department talked up work on the Trans Mountain pipeline expansion his government nationalized for $4.5 billion in 2018, but the extent of promised Indigenous ownership remains to be seen.
“We are in the process of discussing with Indigenous people the potential for their ownership…that potential goes right up to the entire ownership possibly,” said Morneau on Monday following the release of his department’s fiscal update
“But we’re not nearly there yet so we don’t yet have a sense of the interest. We don’t yet have a sense of which of the Indigenous peoples impacted would be keenly interested and capable of moving forward.”
Since Prime Minister Justin Trudeau’s offer to sell indigenous buyers 100 percent of the project – an existing, operational 1150km bitumen pipeline and the project to twin it – three buyers have emerged.
These include the Western Indigenous Pipeline Group whose First Nation partners live on the TMX right-of-way, Project Reconciliation and Alberta Iron Coalition.
Additionally, Métis settlements in Alberta already affected by the oil patch say they are being left out of the entire discussion on future development decisions related to TMX.
The Post Millennial has spoken to each of these Indigenous interests previously, except Alberta Iron Coalition; all are bullish on owning the project.
Métis remain supportive of the pipeline expansion, but want more attention paid to managing cumulative impacts from development to date, before TMX triples the current pipeline’s volume of 300,000 barrels/day.
While Western Indigenous Pipeline Group CEO Joe Dion insists that Ottawa is duty-bound to deal with them first as their interests are directly bisected by TMX, Morneau made no commitments.
“We’re not far enough along to get to a conclusion on (indigenous ownership) and certainly not far enough along to get to any idea of whether one group versus another group would be involved in that,” the minister said on that question.
Adding some uncertainty to TMX fortunes are six coastal First Nations in British Columbia, who are at Federal Court of Appeal this week to argue the second round of consultations for the pipeline expansion were again, inadequate.
The Tsleil-Waututh and Squamish Nations scored their first victory against the Trans Mountain project back on August 30, 2018, after the federal appeals court quashed original National Energy Board permits.
Within 24 hours of this decision, Kinder Morgan shareholders voted to sell Trans Mountain to the Government of Canada and Ottawa re-started consultations with affected First Nations.
Construction is set to begin on the first section of the Trans Mountain pipeline expansion.
According to the Globe and Mail, Trans Mountain Corp. will begin to lay pipe near Edmonton as the delayed project finally moves towards construction.
The progress could help ease some friction between Alberta and the federal government, although this could once again be constrained should environmentalists begin another campaign to stop pipeline growth.
The Trans Mountain pipeline expansion will triple the current capacity and allow for more oil to make it to both export markets in Vancouver and refineries in the United States.
Currently, the multiple organizations believe Canada loses from 50-70 million per day as a result of lacking pipeline infrastructure.
Saskatchewan’s Finance Minister Donna Harpauer has said in a 2018 interview with the CBC, that if current discounts continued, her province’s industries would stand to lose about $7.4 billion in revenue.
Alberta Premier Jason Kenney has declared that if the Trans Mountain Pipeline is not built by Trudeau’s government, he will hold a referendum on ending equalization payments.
The comment comes after Liberal Procurement Minister Carla Qualtrough suggested that equalization payments were on the table for discussions, according to Global News:
“We want to make sure everyone is being treated equally and fairly, and if people aren’t feeling like they’re being treated that way, then, of course, we are going to have to have these really important conversations.”
While many in Alberta are opposed to the equalization payments since Alberta hasn’t properly recovered from the 2014 oil price slump, Alberta receives billions of dollars in other payments from the federal government.
Kenney has long demanded a change to the equalization payment process. He believes provinces that are hit with economic slumps could use the money for themselves instead of equalization.
In response to increasing criticism and outrage from Western Canada, the new Liberal minority government has decided that it’s in their (and the rest of Canada’s) best interests to push through with the Trans Mountain pipeline.
After losing every single seat in both Alberta and Saskatchewan, Prime Minister Justin Trudeau has dialled back his climate policy rhetoric and opted for a more nuanced approach to balance the green push with realistic economic policies.
On October 23, he told a press conference that he will begin his second term as prime minister by working to ensure that oil producers can sell their product abroad at fair prices by moving forward with the pipeline. When asked why his parliament failed to win seats and represent Western Canada, he said that why isn’t the central question but how can the federal government mend the disconnect between West and East.
“We made a decision to move forward on the pipeline because it was in the interest of Canada to do so because the environment and the economy need to go together. We will be continuing with the Trans Mountain pipeline expansion,” Trudeau said.
“Albertans and people in Saskatchewan have faced very difficult years over these past few years because of the global commodity prices, because of the challenges they are facing. For a long time, they weren’t able to get their resources to markets other than the U.S. We are moving forward to solve those challenges.”
According to CBC, the 1,150-kilometre pipeline expansion would roughly “triple the existing pipeline’s capacity to 890,000 barrels a day,” and would allow Alberta to ship oil through B.C. to international markets such as Asia.
The Liberal government has also stated its plans to use the additional oil revenues to transition to cleaner sources of energy, predicting up to $500 million for green energy projects.
In an interview with The Canadian Press, Finance Minister Bill Morneau said that the plan to extend the pipeline isn’t merely a ploy to mollify Alberta and assist negotiations between the minority government and the provinces. Rather, Morneau says that balancing the economy with green energy initiatives is a crucial part of the Liberal’s transitionary measures.
“We purchased [the pipeline] for a reason,” said Morneau. “We now see how it can help us accelerate our clean energy transition by putting any revenues that we get from it into a transition to clean energy. We think that is the best way we can move forward in our current context.”
According to CTV News, construction for the expansion is expected to be complete by the middle of 2022. The Liberal government has forecasted taking up to $125 million in revenue from Trans Mountain Canada each year up to the expansion’s completion and the $500 million each year after.
“My expectation is that we have much common ground between the other parties that have been elected to the next Parliament,” said Morneau.
“We will be seeking consensus on how we can move forward on that common ground. This project we’ve already moved forward on. It’s one that we’ve said that we’re moving forward on, we’ve actually already gone through that process.”