Risks still hurdle to selling TMX pipeline

OTTAWA The federal government is studying the best options for Indigenous communities to reap economic benefits from the Trans Mountain pipeline, but it is not planning to sell the project while legal and political risks remain.

The Supreme Court of Canada eliminated one of those risks Thursday when it denied British Columbia the right to regulate the contents of the pipeline.

At least two other significant legal challenges continue to hang over the project, also known as TMX, making its future far from certain. They both question the validity of the cabinet endorsement given to the expansion project last June, one citing environmental concerns and the other mistakes made during consultations with Indigenous communities. If either challenge succeeds in overturning cabinet’s approval, it would stop construction for a second time and put the entire project on extremely shaky ground.

Early stages of construction began after the expansion was first approved in 2016, but all of that ground to a halt in August 2018, when the Federal Court of Appeal tore up cabinet’s approval. The court ruled the feds hadn’t properly consulted Indigenous communities or adequately considered the impacts the project would have on marine life off the B.C. coast.

After another round of Indigenous consultations and a second look at marine impacts, cabinet approved the expansion again last June, with construction resuming later that summer.

The first lengths of pipe were put into the ground before Christmas, with plans for more pipe and work on several terminals and pumping stations to be underway over the next six months.

The federal government is now the sole owner and operator of the pipeline, through the Trans Mountain Corporation, a Crown agency. That purchase came after Kinder Morgan Canada got cold feet about proceeding in the midst of multiple court challenges, including B.C.’S attempt to keep heavy oil out of the pipe.

The Supreme Court’s decision Thursday ended the case, reaffirming the pipelines running between provinces are entirely within the jurisdiction of the federal government.

Pierre-olivier Herbert, director of communications for Finance Minister Bill Morneau, said Friday that the feds will remain the sole owner of the pipeline as long as any risk remains to construction of the expansion. “When the political risks made it too difficult for the private sector to move forward, our government acquired the Trans Mountain expansion project and related assets,” Herbert said. “We have been clear however that it is not our intention to be long-term owners of the project.”

There are at least three Indigenous organizations vying to buy the pipeline, or at least a majority stake in it, but the government is not officially accepting offers at this point.