The Liberal government expects to get $500 million a year out of the expanded Trans Mountain pipeline and is promising to spend it all on cleaner sources of energy and projects that pull carbon out of the atmosphere.
Finance Minister Bill Morneau told The Canadian Press in an interview this week that the expanded pipeline is not fodder for negotiating with other parties in the minority government. Rather, he said, it is a crucial piece of the puzzle of financing Canada’s transition to a clean energy economy.
“We purchased it for a reason,” said Morneau. “We now see how it can help us accelerate our clean energy transition by putting any revenues that we get from it into a transition to clean energy. We think that is the best way we can move forward in our current context.”
The Liberal government bought the existing pipeline for $4.5 billion in 2018, in a bid to overcome the opposition of the British Columbia government to the expansion.
Federally, the NDP and Greens — the two parties with the most in common with the Liberals on climate change — think the expansion should be cancelled. NDP Leader Jagmeet Singh underlined that point in a statement Thursday about a phone call the previous day with Alberta NDP Leader Rachel Notley.
“Ms. Notley repeated her support for the Trans Mountain pipeline expansion and I told her that I continue to oppose the pipeline expansion,” Singh said, though he added: “While we disagree on TMX, we share concern for the workers.”
The NDP has enough seats to support the Liberals through any confidence votes. But while the NDP leader has said he wants tougher climate action, Singh has stopped short of using the pipeline as a line in the sand, suggesting that ship has effectively sailed.
Morneau said construction on the pipeline is underway and the decision to go forward has been made, which means there is really no way to use it as a bargaining chip in the minority government.
“My expectation is that we have much common ground between the other parties that have been elected to the next Parliament,” said Morneau.
“We will be seeking consensus on how we can move forward on that common ground. This project we’ve already moved forward on. It’s one that we’ve said that we’re moving forward on, we’ve actually already gone through that process.”
The Liberals were accused Thursday of a “lack of coherence” on the party’s plans to expand the pipeline and fight climate change, with environmental groups urging the government to better protect nature and animal species at risk.
“From our perspective, there’s strong concern with the lack of coherence between moving ahead on a plan to address climate change while investing in fossil-fuel infrastructure,” said Nature Canada campaigns director Gauri Sreenivasan during a press conference on Parliament Hill.
“In these early days, when we’re identifying the first priorities for Canada, let’s focus on an action that has a lot of support from Canadians across the country, that will make big advances for our climate goals.”
Construction on the expansion is supposed to be done by the middle of 2022. The Liberal platform forecasted taking revenues of $125 million from Trans Mountain Canada in 2021-22 and then $500 million in each of the next two years.
Eventually, Morneau said, the plan is to sell it back to the private sector and all of the revenues from the sale will then go to clean energy development and other climate change action projects.
The one specific promise the Liberals made that they connected to pipeline revenues was a $300-million annual fund for natural climate solutions including tree planting, as well as conservation and restoration of forests, grasslands, agricultural lands and coastal areas.
On Thursday, NDP MP Peter Julian questioned Morneau’s assertion an expanded pipeline will generate the promised amount of money, and accused the Liberals of hiding the true costs of the expansion project.
Canada’s auditor general warned earlier this year that completing the expansion by the end of 2021 would cost $9.3 billion, though some analysts have suggested it is now closer to $12 billion.
“For the moment, what we’re demanding from the government is they come clean on the actual construction costs,” said Julian, who represents the B.C. riding of New Westminster-Burnaby. “And we know that once the public is aware of how much this is going to cost us and what the consequences are of pushing through TMX … the less they support it.”
Yet Julian sidestepped questions about whether his party would tie any support for the Liberal minority government to ending the project — or getting answers about its costs.
“This shouldn’t even be a discussion,” he said. “You’ve got a multibillion-dollar project that the government says is good for Canada and the costs are skyrocketing through the roof. It’s just a basic matter of common sense and public-administration honesty to come clean with the costs.”
Construction on the pipeline was halted in September 2018, after the Federal Court of Appeal overturned federal approval citing insufficient environmental and Indigenous consultations.
Cabinet undertook new rounds of both and approved the expansion a second time in June.
Construction on the pipeline then resumed in August, starting with work on the marine terminals in British Columbia and pumping stations in Alberta. The first 50 km of actual pipeline will start being laid in the Edmonton area shortly, a spokesperson for Trans Mountain Canada said Wednesday.
Thus far, more than 2,200 workers have been hired.
The pipeline runs from a terminal east of Edmonton to a marine terminal in Burnaby, B.C. The expansion will see a second pipeline built roughly parallel to the first that can carry almost twice as much crude oil every day.
There is however a new federal court challenge underway from Indigenous communities who argued the secondary consultation process undertaken by the government earlier this year was a sham.
–With reporting from Catherine Levesque and Lee Berthiaume