Federal Finance Minister Bill Morneau announced today that the Canadian Government is spending $4.5 billion to buy all the assets from the project, and has also guaranteed financing for the company to start construction immediately.
Saint John Mayor Don Darling is calling on the federal government to revive the Energy East pipeline in light of its decision Tuesday to spend $4.5 billion to purchase the Trans Mountain pipeline and save the contentious expansion to the B.C. coast.
The federal Liberal government has agreed to buy the troubled Trans Mountain expansion project from Kinder Morgan to ensure the controversial expansion of an Alberta-to-B.C. crude oil pipeline gets built. "There is more work to do, but we will not stop until the job is done".
"Governments do a lot of things right, but running businesses is probably not near the top of the list", Wall said.
Although the federal government has taken stakes in other struggling energy projects, Tuesday's announcement marked the first time it is being an entire pipeline, and Ottawa said it does not want to hold the asset for the long term.
"We'll get that pipeline built", Prime Minister Justin Trudeau told reporters as he headed into a cabinet meeting.
"Whether she wins (the election) that's another story, but had this not happened, she was toast", said Bratt, a political scientist at Mount Royal University in Calgary.
The Trans Mountain agreement, which must still be approved by Kinder Morgan's shareholders, is expected to close in August.
The Desjardins analysts suggested that, even if the pipeline were to be built, it would not provide enough capacity for Canadian oil exports going forward.
The deal for the bulk of the Canadian subsidiary of Texas-based Kinder Morgan Sale proceeds are about $12 per share after capital gains taxes, he said.
Kinder Morgan had estimated the cost of building the expansion would be $7.4 billion, but Morneau insisted the project will not have a fiscal impact.
The twinning of the 1,150-kilometre-long Trans Mountain pipeline between Strathcona County, near Edmonton, and Burnaby, B.C., will almost triple its capacity to an estimated 890,000 barrels a day and increase traffic off B.C.'s coast from approximately five tankers to 34 tankers a month. "Now they [the Liberals] have left all their eggs in the Kinder Morgan basket".
"It seems completely insane", May said.
There are parties interested in the pipeline, including Indigenous communities and pension funds, Morneau said, but his officials acknowledged it may be hard to find a buyer amid lingering uncertainty until after the pipeline is actually built. "They are getting a very good value", said Paul Bloom at Bloom Investment Counsel Inc, which owns about 300,000 shares in Kinder Morgan Canada.
The federal government can in theory step in and disallow any provincial laws that British Columbia might use to block the pipeline, but this provision in the Canadian constitution has not been used since the 1940s.
The project will duplicate an existing 1,150km pipeline, allowing it to ship up to 890,000 barrels of oil a day from landlocked Alberta to the Pacific coast of neighbouring British Columbia, in western Canada, for export overseas.
The B.C. government is still fighting the project in court.
"The federal government has made a choice, a decision that was motivated by the decisions of a private company that gave a deadline, not to me, not to the people of British Columbia, but to someone they characterized as stakeholders", Horgan said.
"Canada stands to sacrifice its worldwide reputation, irreplaceable iconic species like the Southern resident Killer Whales, and its commitments to meet its Paris Climate targets and to reconcile with Indigenous people - all while putting enormous risk on Canadian taxpayers".