Prime Minister Justin Trudeau and his cabinet have again approved the Trans Mountain expansion project, a crucial next step for the much-delayed pipeline project designed to carry nearly a million barrels of oil from Alberta’s oilpatch to the B.C. coast each day.
The cabinet has affirmed the National Energy Board’s conclusion that, while the pipeline has the potential to damage the environment and marine life, it’s in the national interest and could contribute tens of billions of dollars to government coffers and create and sustain thousands of jobs.
Beyond approving the project, Trudeau also committed to directing every single dollar the federal government earns from the pipeline — which, when it’s built, is estimated to be some $500 million a year in federal corporate tax revenue alone — to investments in unspecified clean energy projects.
Sale proceeds to go to green projects
Any proceeds from the eventual sale of the pipeline will also be earmarked for projects that would help with the transition away from fossil fuels to cleaner sources of energy.
“We need to create wealth today so we can invest in the future. We need resources to invest in Canadians so they can take advantage of the opportunities generated by a rapidly changing economy, here at home and around the world,” Trudeau said.
Trudeau said building the project, which will help deliver Canadian oil to tidewater for shipment to lucrative markets in Asia, will ensure Canada is not dependent on selling its natural resources to one customer — the United States.
“As we’ve seen over the past few years, anything can happen with our neighbours to the south,” Trudeau said.
The federal Liberal government said Tuesday it will now begin the process of meeting with Indigenous groups who are interested in buying the project and it is open to selling as much as 100 per cent of its stake to First Nations, Métis and Inuit investors. Ottawa has said it does not want to own the project long-term.
Work could start this year
A senior government official, speaking on background to reporters ahead of the official announcement, said while there are still a number of permits and regulatory hurdles facing the controversial project, the government expects construction work to start sometime this year.
“There’s six months left in 2019 and I think it’s fair to say shovels will be in the ground in 2019,” the official said. “Plans are being drafted up, regulators are ready to move forward.”
Alberta Premier Jason Kenney said Tuesday he welcomed cabinet’s second approval of the project and urged an aggressive construction timeline.
“We need to get a fair price for our country’s energy to create good jobs and pay for public services. Approval is not construction. So now let’s get it built!” Kenney tweeted.
The decision comes more than two years after cabinet last approved the project — a decision that was nullified by the Federal Court of Appeal last summer, with judges citing inadequate Indigenous consultations and an incomplete environmental review process.
The court decision placed the federal government in the awkward position of being both the owner of the project — it bought it for $4.5 billion amid investor uncertainty — and the entity tasked with approving construction permits.
That shock decision forced the government and its Crown consultation teams back to the table with Indigenous communities along the project’s route. While the vast majority of First Nations communities have accepted the project and signed impact benefit agreements with the proponent — now a Crown-owned entity — some have flagged potentially devastating effects of a spill on their traditional lands or in their waters as a risk factor demanding more accommodations.
Other First Nations, notably those in B.C.’s lower mainland, have called for the project to be killed outright.
The government tasked retired Supreme Court justice Frank Iacobucci with leading the team of 60 consultants who fanned out across Alberta and B.C. to meet with First Nations and Métis communities to document concerns and put forward recommendations — beyond the 156 conditions already proposed by the NEB — that could mitigate the effects of this project.
While the final outcome was essentially a foregone conclusion, the strings cabinet would attach to its conditional approval of the project were unknown.
The cabinet accepted all of the 156 conditions and took, according to officials, the “unprecedented step” of actually amending six of those NEB conditions to “make them stronger and better,” including strengthened marine and emergency response plans with far more Indigenous participation. The cabinet also is proposing eight new additional “accommodation measures” to address specific Indigenous communities.
The positive cabinet decision is far from the last hurdle facing the project, first pitched by its former proponent Kinder Morgan in 2014. Now, the Crown corporation, accountable to Parliament through the Canada Development Investment Corporation, will have to work with the NEB to finalize the project’s route through a series of regulatory hearings. The possibility of further litigation from environmentalists and First Nations is always a risk.
Despite those live issues, the company has already secured some 30 per cent of the needed pipeline materials to start work on some segments of the pipeline.
There are are also competing Indigenous-owned entities clamouring to buy the project from Ottawa, with some floating a purchase price beyond what the federal Liberal government paid to the Texas energy infrastructure giant in the first place.