Canadian government buys Trans Mountain project for $4.5 billion

Canadian government buys Trans Mountain project for $4.5 billion

Canadian government buys Trans Mountain project for $4.5 billion

One man said he thought the project would be profitable for Canada.

"Our government's position is clear: it must be built, and it will be built".

And the bill for taxpayers won't be $4.5 billion as Morneau claims, but much closer to $20 billion, says economist Robyn Allan.

He said it threatens Canada's reputation as a safe place to invest, puts thousands of jobs at risk and holds back Canada's economic growth.

According to Hudema, the movement opposing the project " will not back down" following the government's purchase.

But British Columbia's social democratic government recently joined environmental activists' fight against the pipeline, provoking a trade row with Alberta and leading Kinder Morgan to temporarily halt its construction until the dispute was resolved.

If no new buyer is reached by July 22, Kinder Morgan will present the $4.5 billion offer from Canada to its shareholders for a vote before the end of July.

Pending their approval, the sale would be finalized sometime in August or September.

The purchase includes the pipeline, pumping stations, and rights of way along the route.

This despite Obama's hypocritical veto of the Keystone XL pipeline to move Alberta's oil to the U.S. Gulf Coast. The decision was seen as a possible way to stop building the pipeline, even if it was approved on paper. Canada would then proceed with construction, selling the pipeline when it would generate the best return.

Notley says there is more certainty around the project than there has ever been and she doesn't plan to use her province's legislation to regulate the flow of oil exports for now. Existing statutes stipulate one level of government can not interfere with the work of another - a situation one official called a "conversation changer" that might convince Horgan to back down.

First, said Morneau announced "an agreement with Kinder Morgan to purchase the existing Trans Mountain infrastructure related to the TMX project".

Morneau stressed repeatedly the pipeline is commercially viable and profitable.

In 2007, Kinder Morgan reported to the National Energy Board that it valued the Trans Mountain pipeline system at $550 million.

Meanwhile, Green Party Leader Elizabeth May pleaded guilty to criminal contempt after she protested at the Kinder Morgan construction site, violating a B.C. court injunction. Kinder Morgan Canada President Steve Kean said the company's "Canadian employees and contractors... will now resume work on this important Canadian project".

"The federal government have overpaid for an aging asset that has huge integrity problems".

Horgan said his concerns remain rooted in what he calls the limited scientific knowledge of how diluted bitumen behaves in water, as well as perceived gaps in prevention efforts and response plans in the event of a spill.

Morneau said the federal government does not plan to be a long-term owner and is in negotiations with interested investors, including Indigenous communities, pension funds and the Alberta government, which will provide funding for any unexpected costs that arise during construction.

Notley said the pipeline will be under federal jurisdiction, which will limit how British Columbia laws can be applied to the project.

Alberta Premier Rachel Notley cheered the news on Twitter. They have also asked the court to reopen its evidentiary record, more than six months after hearings concluded, to consider new evidence uncovered by a National Observer investigation that revealed public servants were instructed to find a way to approve the project before the government had concluded consultations with First Nations. "That certainty is absolutely critical". It certainly won't cost any less than the almost $7.5 billion Kinder Morgan had allocated for it. And the Opposition Conservatives were livid at the prospect of nationalizing a private-sector asset.

The decision represents "a massive, unnecessary financial burden on Canadian taxpayers", Canadian Taxpayers Federation Federal Director Aaron Wudrick said.

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