In 2016, the Federal Court of Appeal overturned approval of the Northern Gateway pipeline project, but it was Ottawa that ultimately rejected the project. Finance Minister Bill Morneau told media that the next step will be to sell it off to the highest bidder once market conditions allow.
But even if the Keystone XL pipeline is built, Canada is still selling 99% of its oil to refineries in the US and that narrow market means they now get far less per barrel than they would if they had access to an alternative market.
Moe also said the federal government could have taken other routes to make sure pipeline construction went ahead, including cutting infrastructure in B.C. if that province continued to block the pipeline.
Canada will pay Kinder Morgan for the money that the company has already spent on the expansion project as well as for the existing Trans Mountain pipeline, which has a capacity of about 300,000 bpd. While we are going to save the vital pipeline and the thousands of jobs that come with it, today's decision highlights how much damage has been done to our worldwide reputation.
The company also faced opposition from environmentalists and aboriginal groups who anxious about the pipeline spilling its tar-like heavy oil. Also, the 26 lenders that Kinder Morgan negotiated with agreed to exempt the pipeline company from penalties on loans if the project was delayed or obstructed because of political problems.
"While accretive options may be surfaced, we do not see a potential transaction as sufficient to offset the potential upside from the Trans Mountain expansion project", the note says. "They may just get frustrated with this and say, 'That's enough, '" he said. "The only (way) in our estimation that that can be done is through exerting our jurisdiction by purchasing the project". "Our court case is against Canada", he said.
Khelsilem said the decision rewards the Texas-based company and transfers the risk to Canadian taxpayers. "They have a form of Crown immunity, which actually limits the degree to which provincial laws would apply to the project".
Kamloops' two MLAs blame Premier John Horgan for what they called "a sad, sad day for this country".
The Calgary-based company's shares closed about one per cent lower at $16.23, continuing the post-deal trend that saw it close almost three per cent lower at $16.10 on Tuesday.
Premier Scott Moe has been a vocal backer of the project. "It polarized us. That is not who we are", Carr told the news conference.
CIBC slashed its 12-month price target to $17 from $22 because of its lower expectations of future growth in revenue and dividends for Kinder Morgan shareholders.
Tom Whalen, CEO of the Petroleum Services Association of Canada, in a statement that PSAC is " deeply concerned that in light of opposition, and in order for the project to move forward, government intervention was required".
"The Trans Mountain Expansion faces even steeper obstacles and will soon become the third, and Trudeau just put the public on the hook for the costs", Hudema said.
On Tuesday, Ottawa repeated its promise to provide indemnification "to protect any prospective new owner from costs associated with political delays". He promised that this project could not go through unless it was done through a vigorous review, which he broke'.