Federal government will purchase Trans Mountain pipeline for $4.5B

Quebecers gathered to protest the Kinder Morgan Trans Mountain pipeline in Montreal on Sunday

When the sale is finished, Canada will continue construction on its own, with plans to eventually sell it all in the future once market conditions improve.

Prime Minister Justin Trudeau has spoken with John Horgan about the federal government's plan to purchase the Trans Mountain Pipeline expansion project for $4.5 billion, Trudeau's office confirmed in a statement.

To do so, Canada will pay the pipeline's current owner, Kinder Morgan, $4.5 billion in Canadian dollars - about $3.5 billion in USA currency.

He added Ottawa shouldn't have to nationalize the project just to get it built.

Prime Minister Trudeau has said the Trans Mountain expansion is vitally important for Canada, a project of strategic interest and a major job creator.

But British Columbia's social democratic government recently joined environmental activists' fight against the pipeline, prompting a trade row with neighbor Alberta and leading Kinder Morgan to temporarily halt its construction until the dispute was resolved.

"It will ensure that we are about to safely get Canadian oil resources to world markets, where we can get a fair price for them", Morneau said.

Canada loses $15 billion every year on the sale of oil because the US remains its only export customer, resulting in a lower price, Trudeau argues.

Until now, Trudeau's government has used a soft tone to try to convince British Columbia to abandon its opposition to the pipeline, hoping not to alienate voters in the province before next year's general election.

Morneau faced off against Scheer in question period hours after the minister unveiled the pricey deal to salvage the British Columbia pipeline expansion project.

United Conservative Party leader Jason Kenney tweeted Tuesday morning that the UCP would comment about the announcement later Tuesday.

Morneau pointed out that once the pipeline was built, the owners would receive user fees in the form of tolls from the oil companies transporting their product on TMX.

Many indigenous people see the new pipeline as a threat to their lands, echoing concerns raised by Native Americans about the Keystone XL project in the US.

Clayton Thomas-Muller, a campaigner with 350.org, argued that Trudeau's move demonstrates that he "still hasn't learned two simple lessons: you can't be a climate leader and build massive fossil fuel projects and you can't ignore Indigenous rights and preach reconciliation".

"Today's events do not change the risks of a seven-fold increase in tanker traffic, or the catastrophic effect a diluted bitumen spill would cause to British Columbia's economy and environment". "There's still 10,000 people who will get arrested if need be".

The company also faced opposition from environmentalists and aboriginal groups who anxious about the pipeline spilling its tar-like heavy oil. But the provincial government - elected past year on a pledge to block the project - filed a legal case seeking jurisdiction to impose additional marine protection measures, such as capping future bitumen shipments, that would effectively derail the project.

Will George, a spokesman for the Tsleil-Waututh First Nation, which has led resistance to the project, said the federal takeover guarantees a broader coalition of opposition in the coming months.

Duane Bratt said it's too soon to say whether Trans Mountain will give Notley a bump in the polls, but no deal by Thursday would clearly have been a killer. "Canada will work with investors to transfer the project, and related assets, to a new owner or owners in a way that ensures that the project's construction and operation will proceed in a manner that protects the public interest", he said. Any money put toward construction would be converted into an equity stake in the federal project, she said.

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