Firms fear gridlock as Ottawa delays decision

CALGARY/OTTAWA – A one-month delay by the federal government to decide on the Trans Mountain pipeline expansion will drive up the costs of the project in a tight labour market and at a time when the Canadian oil industry has lost patience with the federal government, industry executives say.

Natural Resources Minister Amarjeet Sohi announced Thursday the federal government would make its reconsideration decision on the Trans Mountain expansion pipeline project between Alberta and British Columbia on June 18 – roughly a month later than its previous deadline of May 22.

Sohi said that affected First Nations requested more time for consultations on the project’s impacts. “The government has consistently said that a decision would only be made on the project once we are satisfied that the duty to consult has been met,” he said in a release.

In Edmonton, Jason Kenney, the incoming premier, said Trudeau had notified him Wednesday of the impending delay.

“I agreed with the Prime Minister that they need to make sure that they cross every T and dot every I when it comes to the federal government’s duty to consult,” Kenney said. “We certainly don’t want them to have to go back to the drawing board a third time.”

Work stalled on the Trans Mountain project following a Federal Court of Appeal decision overturning approvals last year, but the company, which was bought by Ottawa from Kinder Morgan Ltd. for $4.5 billion, has said it will be prepared once a decision is made.

“While we await that decision, we will continue doing what we can to be poised to re-start the expansion project,” Trans Mountain Corp. president and CEO Ian Anderson said in a release.

Despite these assurances, oil executives are angry at continued delays from the federal government, which also extended its deadline for consultations the first time the project was approved only to have those approvals overturned in court.

But concerns are emerging that the labour market could tighten just as Trans Mountain construction is set to begin.

“When Trans Mountain gets going, there’s going to be a migration of workers away from other projects,” said Matthew Deeprose, president and CEO of Vault Pipelines Ltd.

Deeprose said delays in pipeline construction make it difficult for contractors and subcontractors to retain workers and therefore can cause price estimates to creep up.