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West Coast reacts: Ottawa’s Trans Mountain deal places unacceptable risk on Canadians

Tuesday, May 29, 2018

VANCOUVER, BC, Coast Salish Territories — West Coast Environmental Law Association is astounded at the Canadian government’s decision to nationalize the Trans Mountain pipeline and tanker project – despite substantial financial risk, strong community opposition and ongoing court challenges that could overturn the project’s approval.

In an announcement today, Finance Minister Bill Morneau stated that the federal government will buy the existing Trans Mountain system as well as infrastructure related to the expansion with an investment of at least $4.5 billion, to enable construction to continue this summer. Morneau would not say how much of the construction costs Canadians would be on the hook for, but Kinder Morgan CEO Steven Kean said it was a good deal for Kinder Morgan shareholders.

“It is shocking that the federal government is investing in a project that even the private sector won’t support, especially given the serious economic, reputational and legal risks involved. It is unfair for Canadian taxpayers to prop up the federal government’s misguided attempts at keeping a dead-end project alive,” said Eugene Kung, Staff Lawyer.

“Kinder Morgan has pulled an ENRON on the federal government, and Canadian taxpayers.” said Kung, referring to Kinder Morgan’s origins from the notorious company that collapsed after an accounting fraud scandal. “It is almost certain that the final bill to Canadians will be much higher than $4.5 billion, more likely in the $9 to 10 billion range.”

The federal government says it plans to work with investors to find a new owner for the project and related assets “at the appropriate time,” but until then it will proceed as a Crown corporation.

“No investors came to the table earlier this month when the government first unveiled its plans to indemnify Trans Mountain. It’s incomprehensible that the federal government is putting so much at stake to build a project that violates Indigenous rights, clashes with our climate commitments and makes no economic sense,” said Jessica Clogg, Executive Director and Senior Counsel.

There are currently 14 legal challenges before the Federal Court of Appeal, alleging that the government failed in its constitutional duty to consult First Nations about the Trans Mountain project, and that the federal review had other regulatory flaws. Success in just one of those challenges could derail the underlying federal approvals.

“This deal does not change the powerful opposition to the project in BC, nor does it address the legal risks that still stand in the way of the project. Instead of investing in a clean and just future, Canada has further entrenched our status as a petro-state with another gigantic subsidy.”

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For more information, please contact:

Eugene Kung | Staff Lawyer, West Coast Environmental Law

604-601-2514, ekung@wcel.org