Pipeline ‘makes sense,’ says Morneau
Finance minister says Ottawa working on new review process for resource projects
B.C. and Alberta’s dispute over Kinder Morgan’s Trans Mountain Pipeline Expansion Project “is one of those frustrating things that happens in a democracy,” federal Finance Minister Bill Morneau acknowledged in front of a Vancouver audience Tuesday.
“But we have to deal with it,” said Morneau during a breakfast discussion with the Business Council of B.C. while repeating federal government support for the project. Making sure Canadian resources can fetch world-market prices is the best way of attracting investment in Canadian business, Morneau said, though he also promised new ways of finding public consent for such projects.
“We’ve said clearly, we believe that the Kinder Morgan pipeline makes sense in order to reach that objective,” Morneau said in a later media availability.
The minister was in Vancouver to talk about his 2018 federal budget, with $21 billion in new spending and an $18-billion deficit, which he characterized as continuing investments in Canada’s long-term capabilities while the economy is strong.
The crowd at Vancouver’s Fairmont Pacific Rim hotel, however, was more interested in shorter-term concerns such as American tax changes, a potential trade war with the U.S. and the competitiveness of B.C.’s resource sector.
“Particularly in British Columbia, we are a highly resource-dependent economy, and making sure we have a streamlined approach (to regulation) is critically important,” said session moderator Susan Yurkovich, CEO of the Council of Forest Industries. That means setting effective timelines for environmental reviews before getting to ‘yes’ or ‘no’ decisions, which can give project proponents more certainty.
Morneau said that while some in the audience might be skeptical of the overhaul the government is proposing to give its environmental review process, he is hopeful a new process that aims to deal with conflicts up front will help get to better decisions.
“The frame we’re coming at is that we have to acknowledge there will be interveners in a project,” Morneau said, and that by “acknowledging that up front is the smarter way to get at it.”
If critics are more likely to feel their voices are being heard, industry proponents will get more certainty out of the project, Morneau suggested.
“It doesn’t make sense to continue on the path of what we’ve been doing for the last decade, which wasn’t actually getting us to project certainty,” Morneau said.
Certainty is important to the competitiveness of B.C. industry, said business council CEO Greg D’Avignon. “The competitiveness of Canada and British Columbia is really at risk,” he said in an interview.
B.C.’s economy has benefited from a favourable exchange rate with the U.S. dollar and low interest rates that have given a big boost to the growth in housing and retail sales attached to that. However, if that spending diminishes, “you’ll start to find the foundation of the economy in B.C. and Canada are quite weak,” D’Avignon said.
Morneau was also pressed on why the government didn’t respond in his budget to big U.S. corporate tax cuts that slashed corporate rates to 21 per cent from 35 per cent. Morneau said his department is keeping a close eye on how the U.S. implements those cuts, which upon closer analysis don’t appear to be as steep.