PM promises shovels in ground by summer

OT TAWA • The federal government has announced it is moving ahead with the Trans Mountain pipeline expansion, ending months of speculation over the dev el opment and offering some relief to the embattled oil and gas sector.

“We have been assured by the company that their plan is to start construction this summer,” Prime Minister Justin Trudeau said of Trans Mountain Tuesday, just after his cabinet re-approved the project. “There is still a number of immediate steps to do in terms of permitting, but the pipeline is to have shovels in the ground this summer.”

The government did not provide an updated timeline on Tuesday, but past estimates suggest the project could be completed around 2022 or 2023. Trans Mountain Corporation, the Crown corporation building the project, still needs to secure a number of regulatory permits before the expansion can be completed.

The Liberal decision could go some way toward restoring investor confidence in Canada, which has waned amid a failure by the oil and gas industry to build major new export pipelines. Years of political and regulatory wrangling have delayed major infrastructure projects, including Trans Mountain, fuelling deep discontent in Western provinces.

Some people “will not be convinced by the arguments we put forward,” Trudeau said on the Liberal government’s balance between the economy and the environment. "We accept that.”

The decision underscores a balancing act by the Trudeau government to both support growth in the fossil fuels industry while also enforcing stricter environmental policies, including an economy-wide carbon tax. On Monday, the House of Commons passed a motion to declare a national climate emergency in Canada, then approved the pipeline a day later.

Conservative leader Andrew Scheer said the announcement “really gets us no closer” to completing the Trans Mountain expansion, and expressed a belief that Ottawa would miss the crucial summer construction season, possibly leading to ballooning construction costs.

Alberta Premier Jason Kenney said the re-approval of Trans Mountain amounted to a positive signal for investors, but warned that the move did not go nearly far enough in addressing concerns in some provinces over the future of the Canadian natural resource sector. He urged Ottawa to immediately move ahead with construction.

“This is a test for whether Canada truly is an economic union,” said Kenney.

In par tic ular, Kenney warned that two controversial Liberal bills, C-69 and C-48, threaten to kneecap the fossil fuels sector, and could undo any goodwill achieved by approving Trans Mountain. Bill C-69 would overhaul the environmental review process and C-48 bans oil tankers from docking along the northern B.C. coast.

Paul de Jong, head of the Progressive Contractors Association of Canada, which represents some of the companies building Trans Mountain, said the Liberal decision on Tuesday still leaves lingering concerns about C-69 and C-48.

“While today’s decision is the right one, it’s far from a ringing endorsement when the government is working so hard to kill major resource projects through legislation and regulations designed to make energy development less likely in the future,” he said.

First Nations communities and some environmental groups have promised to delay the project through any means necessary, including legal challenges.

“No matter who approves it, this pipeline will not be built,” said Will George, a leader of Protect The Inlet and member of the Tsleil-waututh Nation.

Advocacy group Environmental Defence said the move would make it impossible for the Trudeau government to meet its climate change targets.

And Mike Hudema, climate and energy campaigner, Greenpeace Canada, said, “For the Trudeau government to approve this pipeline after declaring a climate emergency makes about as much sense as pouring gasoline on a burning fire.”

Any legal challenge is not expected to stall the project in the near term. The Supreme Court of Canada did not rule on a First Nations-led challenge against Enbridge’s Line 9 pipeline expansion until after oil was already flowing through the line, for example.

Trudeau announced last summer that the federal government would buy the existing assets of the Trans Mountain pipeline for $4.4 billion, after the project’s private-sector owner, Kinder Morgan, threatened to scrap the project. Around the same time, a Federal Court of Appeal judge struck down an earlier approval of the expansion, forcing the government to repeat a portion of its consultations with First Nations communities affected by the pipeline, which carries oil from Alberta to the B.C. coast for export.

Federal officials, under the direction of Minister of Natural Resources Amarjeet Sohi, have conducted months of talks with local communities along the pipeline’s path in an attempt to temper opposition to the project. Sohi met with 65 First Nations communities on Trans Mountain, and government officials remain in talks with some communities.

Later this week, Finance Minister Bill Morneau will send letters to 129 Indigenous communities to begin discussions around offering First Nations a financial stake in the project.

The Trans Mountain expansion would nearly triple the pipeline’s current capacity to 890,000 barrels of oil per day, bringing crude oil and other petroleum products from northern Alberta to a port near Vancouver.