If Finance Minister Bill Morneau was expecting to inspire confidence with his press conference on Wednesday, he failed miserably.
I get that the federal government doesn’t want to negotiate in public, but what are we to make of Morneau’s statement that the federal government will indemnify Kinder Morgan against losses, but also that if the company backs out of the Trans Mountain pipeline project and someone else will step in to complete it, Ottawa will indemnify them too.
WATCH ABOVE: Morneau outlines three steps being taken to promote Trans Mountain
Who, exactly, is going to step in to complete this project? If Kinder Morgan determines there is too much political risk to take it on, what private company is going to stand up and say, “We’ll do it!”
Did Morneau even listen to the testimony of Chris Bloomer from the Canadian Energy Pipeline Association a few weeks ago, when he testified before a parliamentary committee that the regulatory environment was “suffocating” and “toxic” and that it is “preposterous” to think a pipeline proponent will commit billions of dollars to a new project in this environment?
LISTEN: Chris Bloomer from the Canadian Energy Pipeline Association
Maybe that’s the point. Maybe pipelines in Canada will no longer be built by private companies. Maybe they will only be built by government. I have listeners who suggested that the federal government might back a deal with China or some other state-owned foreign enterprise. If so, you have to wonder what kind of concessions would have to be made to make that work.
Maybe it will be the Alberta Government dipping in to the Heritage Savings Trust Fund to build the project. Would Albertans be on board with that? One listener said he would back the province buying it, as long as it was returned to private hands with a sale of shares to the public within five years. Neat idea, but my guess is that’s not a viable solution either.
How, precisely, would it work? The way we have built pipelines in this country historically is the proponent negotiates, owns and buys the right of way — it is not public property. Will the government just expect Kinder Morgan to simply hand over a portion of their right of way so government can build on it? As far as I can tell, Kinder Morgan has no plans to sell its existing pipeline. If it disrupts their current operations, who will compensate them for that? Or will the government just expropriate that pipeline from them, too?
LISTEN: Tim Pickering with Auspice Capital Investors responds to Bill Morneau’s comments on Trans Mountain
If that’s part of the plan, we are getting into Hugo Chavez territory. Who will want to invest private dollars into Canada if we start acting like a banana republic?
To me, this sounds like a federal government desperate to appear to have a solution, when in fact they don’t have a clue what to do.
Premier Rachel Notley has made good on her promise to pass Bill 12 to shut off the taps to B.C. Good for her and good for UCP Leader Jason Kenney for pushing her to do it. Both leaders deserve credit for their tough stances.
Where is the legislation that Prime Minister Justin Trudeau promised a month ago after his hastily arranged meeting with Notley and B.C. Premier John Horgan? Where is the invocation of the federal declaratory power to get this project built in the national interest? Why aren’t they withholding infrastructure transfers to B.C. until they start complying with the law?
Investment analyst Tim Pickering says the biggest problem with the federal government’s strategy is that B.C. bears no consequences for its destructive and unconstitutional grandstanding.
Someone asked me what it would take for me to give the Liberals some credit on how they are handling this file. Well, for starters, they could have said that for every dollar the federal government had to pay to indemnify Kinder Morgan, they would be reducing federal transfers to B.C. by an equivalent amount.
That might have got Horgan’s attention.
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