Here is everything you need to know about Ottawa’s plan to (maybe) buy the Kinder Morgan pipeline
Or, to be more accurate, he announced part of the plan.
An hour later, senior officials tried to clarify the parts of the plan he left unanswered.
Then about an hour after that, political officials tried again.
Morneau told a press conference of assembled journalists in the National Press Theatre that the government will spend $4.5 billion to buy Trans Mountain and core Canadian assets of Kinder Morgan related to the expansion project, including the terminal.
Kinder Morgan will, in exchange, use what Morneau described as a “loan” from Export Development Canada to immediately resume construction on its plan to twin the existing pipeline over the summer.
But what Morneau left out is that the plan to buy the pipeline project from Kinder Morgan is Plan B.
Plan A, senior officials said after his press conference, is for the government of Canada to essentially act as a real estate agent to try to sell the pipeline for Kinder Morgan before the end of this summer.
Only if that plan falls through — or if Kinder Morgan shareholders reject a buyer found by the government — will the federal government own the pipeline, turn it into a Crown corporation, and try to flip it down the road to another private sector company.
Confused? Let’s break it down.
What was announced today?
The press release issued by the government made no mention of a plan to try to find a buyer before the government steps in and buys the project itself.
Instead, the announcement said that the government had reached a “commercial agreement with Kinder Morgan in order to secure the timely completion of the Trans Mountain Expansion Project.”
WATCH BELOW: Morneau outlines three steps being taken to promote Trans Mountain
The agreement, the release said, will see crews return to construction work this summer through a federal loan guarantee.
“In addition, the Government of Canada has reached an agreement with Kinder Morgan to purchase the company’s Trans Mountain Expansion Project and related pipeline and terminal assets for $4.5 billion,” the statement said. “The transaction is expected to close in August 2018.”
The release did note that the government does not intend to be a “long-term owner” of the project.
“At the appropriate time, Canada will work with investors to transfer the project and related assets to a new owner or owners,” the announcement stated.
Morneau, in his press conference, spoke in terms of wills, not ifs.
WATCH BELOW: Canada will look to sell Trans Mountain at a later date, Bill Morneau says
“We are purchasing the assets; we are purchasing the existing assets,” he said.
“We will also take on the people who are integral to the actual completion of the project.”
But when pressed for details, he said little and senior officials speaking on background with reporters quickly provided a different version of what will happen.
What is actually happening?
Plan A, those officials said, was actually for the government to support efforts by Kinder Morgan to sell the project to some other party.
The federal government will help with that, and take on the role of marketing the project to private sector investors.
Kinder Morgan will help with that — but only until roughly July 22.
After that, but possibly as late as September, the federal government will implement Plan B: buy the Trans Mountain pipeline, the Burnaby terminal and related assets (along with the management of the project), from Kinder Morgan and run the project as a Crown corporation.
The loan given to Kinder Morgan will be included in the $4.5-billion purchase price of the project.
Canadian taxpayers will then be on the hook for the construction of additional work on the project, as well as any costs associated with a potential spill.
How much will it cost to build?
One of the big lingering questions is how much nationalizing the project could cost Canadian taxpayers.
The purchase price for the existing pipeline and infrastructure is $4.5 billion — but that does not include the construction costs of the expansion.
Kinder Morgan had pegged the total costs of the project, including construction, at $7.4 billion as recently as December 2017.
WATCH BELOW: Morneau light on details about how to force Trans Mountain through B.C.
Morneau refused, again and again, to say how much Canadians could end up paying if the government has to buy the project, then build the expansion itself, while it tries to find a buyer to take it over.
“We’ve had expressions of interests from multiple investors over the last month,” Morneau said, noting the focus at the moment is on helping Kinder Morgan proceed with the project.
Senior officials said afterwards that the reason the government was not coming out and providing even a rough range of construction costs was because it wants potential investors to come up with what they think the project is worth on their own.
“It really is not in the public interest in the next few months to provide a speculative answer as to what the final costs of construction will be,” the officials said.
If the federal government does end up buying the project and has to begin construction, it would reveal those costs at that time.
Alberta will also contribute anywhere from zero to $2 billion into what the federal government billed as an “emergency fund” for the project, and would get equity or profit sharing in line with whatever contribution they make.
It is not clear whether the federal government will get a cut of any potential sale it helps to coordinate for Kinder Morgan between now and the end of the summer.
However, Kinder Morgan shareholders still have to vote on any potential deal — and they could say no.
That could force the federal government to buy the project, even if it finds interested private sector bidders.
What is the timeline on all this?
When it comes to construction, shovels will be in the ground this summer.
When it comes to actually getting Alberta oil to market, that’s a whole other question.
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Morneau would not commit to a timeline on either when the expansion could actually be operational or how long the government could be stuck owning the project if it can’t find a buyer.
“Our expectation is that this asset can be moved to the private sector in a reasonable time frame,” he said.
Ottawa bought a stake in the then-floundering Hibernia oil field off Newfoundland in 1993.
It still holds that stake today.
What about the opposition?
Among those gathered in the National Press Theatre to hear the announcement was Green Party Leader Elizabeth May, who pleaded guilty on Monday to contempt of court for violating an injunction barring protesters from Kinder Morgan’s Burnaby work site earlier this year.
While May has said she will not violate the injunction again, she said she would continue to fight against the project.
WATCH BELOW: Morneau calls out Premier Horgan’s ‘deliberate attempts to frustrate’ Trans Mountain
Dozens of protesters have also been arrested and just this weekend, hundreds gathered in Montreal to show their continued opposition to the project.
B.C. NDP Premier John Horgan has said little following the news, but federal NDP Leader Jagmeet Singh is scheduled to give a press conference at 1:30 p.m. EST in Ottawa about how the party plans to continue to oppose the pipeline.
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Close to 500 people were arrested between April 2016 and February 2017 as part of efforts the block the construction of the pipeline from traversing ancient burial grounds and water sources.
Police and site workers deployed dogs, water cannons, sound cannons and strip searching against those protesters, and eventually called in the military to clear out the protest camp occupying the site.
Morneau was asked if forcing the project through, despite widespread opposition, could result in a Canadian version of Standing Rock, but he refused to say what steps the government might resort to if protests intensify.
“There will always be challenges to getting things done in a democracy,” he said, noting any buyers of the project would also be indemnified from unnecessary and politically motivated delays.
It remains unclear what equipment or resources could be deployed to push the work forward.