Taxpayers will pay for Kinder Morgan project

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  • The Canadian Parliament was in outrage after the federal Liberal cabinet approved a controversial plan to spend $4.5 billion to buy the entire Trans Mountain pipeline project, and take on potentially billions more in construction costs to expand it that will add up to a bill worth $7.4 billion.

    Conservatives blamed Prime Minister Justin Trudeau for nationalizing an oil pipeline because he could not provide international energy investors the certainty they need. The pipeline has been a controversial issue, especially between BC and Alberta, as the NDP government of BC refuses to give way to the building of the potentially environmentally disastrous oil project.

    Trudeau was asked about the risks of his plan to taxpayers or the environment, but he was tight-lipped, saying only that “we’re going to get that pipeline built.” He was not in the House of Commons to face the opposition, leaving Finance Minister Bill Morneau to defend the move just hours after announcing it. Morneau was met with jeers and cheers from the Conservatives, NDP and the Greens for his pronouncements, especially after his initial quip against Conservative leader Andrew Scheer.

    Morneau said in a news conference the federal government will create a Crown corporation to handle Kinder Morgan’s pipeline, which will manage all the rights, assets and the Canadian management team associated with its planned expansion, starting in August. This also came with an “assurance” that, with Kinder Morgan’s help, Ottawa will look for a private sector to build it, but if no buyer is found, Canadian taxpayers will pay the bill to build the pipeline.

    Kinder Morgan has already spent about $1 billion on the pipeline expansion, and in December estimated the project expansion cost at $7.4 billion overall. It is seeking to discharge its costs to a willing Canadian government who took on the costs to pay for the building of the pipeline.

    It is the largest federal government bail out since 2009, when Ottawa joined the Ontario government to advance more than $13.3-billion to help keep Chrysler and General Motors in business, and to ensure the Canadian auto industry survives. It also saved Canadian aviation company Bombardier last year, when it took $1 billion of the taxpayers money to keep the company afloat.

    Trudeau said the hazards of building this pipeline drove away Kinder Morgan. He met with his cabinet members early Tuesday morning two days before the deadline of the decision on the Trans Mountain project.

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