In an extraordinary move aimed at boosting Canada's tar sands industry in the wake of sharp environmental opposition, the Canadian government said Tuesday that it will spend $3.5 billion to buy the Trans Mountain pipeline and triple its capacity.
Morneau presented the options during an early-morning cabinet meeting Tuesday before ministers signed off on the chosen option, which comes just days before the company's self-imposed May 31 deadline and is still subject to the approval of Kinder Morgan shareholders.
Finance Minister Bill Morneau says once the sale is complete, Canada will continue the construction on its own, with a view to eventually selling the whole thing down the road, once market conditions would allow it to get the best price. During or following construction of the expanded pipeline, which is expected to take about 2.5 years to complete, Canada will monitor the markets and seek out future investors interested in taking on the entire project once it is done.
Currently, he said yesterday, Canada is losing US$11.56 billion (C$15 billion) annually because of the pipeline constraint.
The pipeline connects oil sands facilities near Edmonton, Alberta, to tanks in Burnaby, near Vancouver on Canada's west coast.
Under the proposed federal plan, the Trans Mountain pipeline will be placed under the stewardship of a new Crown corporation and Ottawa will divest itself of the project at a later date.
Steel pipe to be used in the oil pipeline construction of Kinder Morgan Canada's Trans Mountain Expansion Project sit on rail cars at a stockpile site in Kamloops, British Columbia, Canada May 29, 2018.
"When we are faced with an exceptional situation that puts jobs at risk, that puts our global reputation on the line, our government is prepared to take action", Morneau told reporters.
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He said his company had agreed to work with the government to try to find a third party to buy the assets by July 22.
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.
"It's not the intention of the government of Canada to be a long-term owner of the project", Morneau said, adding that pension funds and indigenous groups have already expressed an interest in buying stakes in the project.
Many indigenous people see the new pipeline as a threat to their lands, echoing concerns raised by Native Americans about the Keystone XL project in the US. Kinder Morgan had paused non-essential spending on the project over disputes between provincial governments in Alberta and B.C.
Presumably, the cost to the new owners - us - will be about the same. Canada will continue to need major pipeline projects to deliver responsibly-produced Canadian energy to markets around the world while ensuring a fair price for our resources.
Prime Minister Justin Trudeau emphasized those differences in his first public comment since his government's announcement.
Despite his vocal support for the project, Moe said Saskatchewan will not pick up the tab for any construction costs because the project carries Alberta oil.