A Red Deer Conservative MP says the federal government is setting a dangerous precedent by buying the Trans Mountain pipeline.
Red Deer-Lacombe MP Blaine Calkins said Enbridge and TransCanada, companies that had to pull out of the Northern Gateway and Energy East pipeline projects, will be wondering what happened to their compensation.
“Everybody in Alberta wants this pipeline built but if we don’t do it right it could set a dangerous precedent that might make it virtually impossible to get anything done in the future and that’s the risk,” said Calkins from Ottawa.
The federal Liberal government announced it planned to spend $4.5 billion to buy the Trans Mountain pipeline and all of Kinder Morgan Canada’s core assets on Tuesday. In return, Kinder Morgan will continue with its original $7.4-billion plan to twin the pipeline billion this summer while the sale is finalized, which likely won’t happen until August.
Once the sale is complete, Canada will continue the construction on its own, with a view to eventually selling the whole thing down the road, once market conditions would allow it to get the best price.
“Now the taxpayers of Canada are on the hook for $4.5 billion in initial purchase price and if they can’t find anyone to finance the construction, the Government of Canada will have to finance the construction of that pipeline as well at a time that we’re running a $20-billion deficit. This is unplanned spending, and of course Canadians will also have to pay the interest on any borrowed money to build this pipeline,” Calkins said.
Robin Bobocel, Red Deer & District Chamber of Commerce CEO, said it’s too bad the federal government didn’t assert their jurisdiction earlier. Canada is losing $15 billion in revenue a year without this pipeline.
“I hope this works out for all of us. I want this to succeed. (But) I struggle with getting on board with government intervening and thinking that they can build this pipeline efficiently,” Bobocel said.
He said it’s also unclear how the decision will get the pipeline built any quicker. The premier of British Columbia has said he will continue his opposition.
“From what I have heard, I’m not sure how this changes anything other than putting the taxpayers at risk. I could be wrong,” Bobocel said.
Calkins said everybody else wanted the private sector to do its job and allow Alberta energy get to tidewater where all Canadians can benefit from the international price rather than the North American market price.
“Energy pays for a lot of this country of the social services we have,” Calkins said.
Red Deer-Mountain View MP Earl Dreeshen said it’s just so frustrating.
“We do need to get our pipelines built, but having this level of government intervention engaged in it is certainly not the way to go,” Dreeshen said.
“Certainly the shareholders at Kinder Morgan will be happy as they’ve divested themselves of a project and they’ll be able to take that profit and invest it in more stable economic jurisdictions around the world so they can build pipelines.”
And those pipelines will allow other countries to sell their oil to Eastern Canada, Dreeshen said.
Brian Mason, Alberta Transportation Minister, said he’s extremely pleased the pipeline will be built.
“Our government has been working very hard from the beginning of its mandate to make sure that this pipeline was built and that we would thereby obtain greater access to new markets for our oil – something that’s sorely needed,” he said.
This pipeline will have a significant impact on the price Canada is able to get for oil, he said.
“Right now we’re in a position where we just have one customer and a lot of it is travelling by rail. Those things reduce the value that we receive,” said Mason.
“It means employment for thousands of workers, not just in Alberta but in British Columbia as well,” he said.
Mason said the pipeline being a federal project helps because the federal government has more legal powers than the provincial government.
“That will provide much more certainty that all the approves will be attained and the pipeline will actually be constructed according to a schedule. We’re hopeful work will start almost immediately,” he said.
— With files from Canadian Press