The Star’s view
Bold gamble will likely decide Justin Trudeau’s fate with voters,
Make no mistake: Justin Trudeau has bet the farm, or at least the fate of his government, on making sure the Trans Mountain pipeline from Alberta to the coast of British Columbia gets built.
By buying the pipeline outright, the Trudeau government has gone all in on this project. This decision stands to be the defining moment of his time as prime minister. It’s an enormous political and financial risk, and how it turns out may well determine whether his government is considered a success.
To be clear: The new pipeline should be built or, more precisely, expanded.
It’s by far the safest route from the Alberta oilsands to the sea, along the path of an existing, decades-old line. It would provide direct access for Alberta oil to Asia, bringing in higher world prices and additional revenue for governments.
It has already been approved through a rigorous review process by both the federal and B.C. governments (before the current anti-pipeline administration of NDP Premier John Horgan was elected). And Ottawa has put in place stringent new rules to protect against any spills from tankers plying coastal waters.
Expanding the pipeline is also a key part of the national plan on climate change that Ottawa signed with the provinces in 2016. It involves putting a national price on carbon, phasing out coalfired power plants and capping emissions from the oilsands. If the pipeline is killed and Alberta walks away, that deal will evaporate and the “grand bargain” between economic and environmental values that Trudeau has promoted will lay in ruins.
Finally, Trans Mountain is a test of Ottawa’s ability to see through any big resource project. If B.C.’s minority government, dependent on a handful of Green Party legislators, can scuttle Trans Mountain, federal authority and credibility are out the window.
Still, it’s far from self-evident that the path the Trudeau government has chosen to make Trans Mountain work is the best one.
Taxpayers are putting up $4.5 billion to buy the existing pipeline and some related properties from its owner, Kinder Morgan, which is bailing on the entire project. Kinder Morgan itself paid a fraction of that ($550 million) to acquire those assets in 2007. Finance Minister Bill Morneau says the price we’re paying is “fair value,” but how can anyone know that we aren’t being taken?
And that’s just the start. Completing the expansion of the line to triple its capacity will cost an awful lot more — the estimate now is $7.4 billion and costs could well escalate with further delay. That would bring the total pricetag to almost $13 billion.
Morneau insists it’s “an investment in Canada’s future.” But if it makes so much sense at this price, you’d expect the private sector to be sniffing around at the opportunity. It’s vital that the government gets other companies involved as quickly as possible, not just to share the financial risk but to demonstrate that others share its confidence in the long-term future of this project.
Politically, nationalizing Trans Mountain is rife with ironies. Who would have thought that Justin Trudeau — champion of the environment, friend to Indigenous peoples — would roll the dice on his premiership in the cause of building, of all things, an oil pipeline?
And who would have thought that the son of Pierre Trudeau, who so famously thumbed his nose at the west back in the-1980s with his National Energy Program, would use the federal hammer on the side of Alberta — at the risk of alienating much of Liberal-leaning British Columbia?
This is a big moment for both the government and the country. At the very least, Trudeau cannot be accused of settling for half measures. He has taken a bold step and his government will live or die with the consequences.