Morneau says government willing to compensate Kinder Morgan against political delays - Action News
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Morneau says government willing to compensate Kinder Morgan against political delays

Finance Minister Bill Morneau says the Canadian government is willing to compensate Kinder Morgan for any financial loss due to British Columbia's attempts to obstruct the Trans Mountain pipeline expansion.

Finance minister points the finger of blame at B.C. Premier John Horgan

Canada's Finance Minister Bill Morneau listens to a question during a news conference about the state of the Kinder Morgan pipeline expansion in Ottawa, Ontario, Canada, May 16, 2018. (Chris Wattie/Reuters)

Canada is willing to write Kinder Morgan or anyone else who steps up to the plate a cheque to ensure the Trans Mountain pipeline expansion gets built despiteBritish Columbia's opposition,Finance Minister Bill Morneau said Wednesday.

Morneausaid the federal government is willing to compensate the pipeline's backersfor any financial loss due to British Columbia's attempts to obstruct the company's Trans Mountain pipeline expansion.

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"The indemnification would allow Kinder Morgan to finish what they started, what they received federal and B.C. approval to do," he saidWednesdaymorning during a news conference that laid out in broad terms what his government is willing to do to move the project ahead.

Morneau's statement came just hours beforeKinder MorganCanada's stakeholders met in Calgary, and offers the company an incentive to proceed with the project just weeks ahead of its potential drop-dead date.Kinder Morgan has threatened to abandon the project if a clear path forward isn't reached by May 31.

"As a government we need to ensure that the rule of law is respected and that investors have the certainty needed to complete the Trans Mountain expansion project, because it's in the national interest to do so," Morneau said.

Morneau said that if Kinder Morgan bails on the project, the governmentwould reimburseany financial losses related to B.C.'s political opposition incurred by any other investor willing to take the project on as long as reimbursement is "soundand fair and beneficial for Canadians."

Morneauwouldn't say if there's a limit to how much the government is willing to spend to compensate the pipeline's backer.

"This is an exceptional situation," he told reporters.

It's also not yet clear if compensation would require new legislation.

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Finance Minister Bill Morneau places the blame for the delay of the Trans Mountain expansion directly on the shoulders of BC Premier John Horgan, and says the federal government is willing to provide indemnity to ensure the project goes ahead.

"We are still considering all options, both financial and legislative ...It's too early to speculate on the mechanics of any future agreement,"said Morneau's office.

Wednesday'snews conference was the first detailed update on the government's efforts to save the controversial pipeline expansion since Prime Minister Justin Trudeau asked Morneau to work with Kinder Morgan to find a path forward.

Kinder Morgan 'appreciates' comments

Itwas announced late Tuesdaynight asMorneauconsulted with senior officials in the Alberta government.Morneaualso spoke with Kinder Morgan CEO SteveKeanby phone to tell him what he would be saying at the press conference.

After the 16-minute meeting of stakeholders in Calgary,Kean said hewouldn't negotiatein public.

"We appreciate [Morneau's] recognition that a private company cannot resolve differences between governments," read a statement from the company.

Alberta Premier Rachel Notley unveils an ad they will be running in B.C. about the pipeline expansion in Edmonton, Alta., on Thursday, May 10, 2018. (Jason Franson/Canadian Press)
"We remain steadfast in our previously stated principles: clarity on the path forward, particularly with respect to the ability to construct through British Columbia, and ensuring adequate protection of our KML shareholders."

Alberta Premier Rachel Notley praised the government's decision.

"From the beginning, pipeline opponents have sought to exhaust investors into submission by throwing up legal roadblocks. That strategy doesn't work if the project is backed by the Canadian people," she told reporters in Edmonton.

Conservative Leader Andrew Scheer, however, was quick to criticize.

"Only Justin Trudeau could take a project that Canadians support, creates thousands of jobsand helps our economy, and put it on taxpayer-funded life support," he tweeted.

"This is a failure to lead."

'A lot to lose'

Last month, Kinder Morganstopped all non-essential spending on its$7.4 billion project over a months-long standoff between the British Columbia and Alberta governments. B.C. has been working to block the pipeline for environmental reasons, over Alberta's objections.

The expansion wouldadd a second pipeline alongKinder Morgan's existing pipeline routeto carry diluted bitumen from Alberta to the B.C. coast for export on tankers.

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A senior Alberta government official told CBC News late Tuesday that "Kinder Morgan is not making this easy."

The official, who spoke to CBC News on condition of anonymity, said there is "a lot to lose right now."

Shots atHorgan

Morneaulaid most of the blame for the delay at the feet of British Columbia Premier JohnHorgan,calling hisopposition"politicallymotivated."

British Columbia Premier John Horgan has staked much of his government's survival on opposing the pipeline. (Chad Hipolito/The Canadian Press)

"PremierHorgan'sstated intentions are to do whatever it takes to stop the project, which is unconstitutional in its very purpose," Morneau said."These are challenges that frankly put the livelihood of thousands of Canadians and their families at risk."

The Liberal government signed off on the project back in 2016 while promising to rewrite the country's environmental assessment process.

Then-B.C. premier Christy Clark gave her consent to the project after her conditions were met, but her Liberal government was toppled by an alliance between Horgan's NDP and Andrew Weaver'sGreen Party.

Speaking to reporters following an event in Vancouver,Horganfired back atMorneauover hischaracterization of the dispute.

"I think that is rhetoric and hyperbole on his part. There are fundamental challenges to that project that he well knows,"Horgansaid.

"For a Toronto-based finance minister to single out British Columbia as a problem here, he should look at the failure of Energy East, he should look at the failure of Keystone and a whole host of other projects."

Horgansaid his government is actingwithin its rightto defend British Columbia's environment and coast.

B.C. has filed a reference case with the province's top court to determine if it hasjurisdiction to limit expanded shipments of heavy oil through the province.

Meanwhile, B.C.'s Attorney General David Eby wrote to his counterpart in Alberta Wednesday, warning that if Notley's government uses a newly-passed law to restrict the flow of oil in to B.C., his government would take Alberta to court.

'Absolutely, fundamentally incorrect'

FederalNDPLeaderJagmeetSingh made his thoughts on the pipeline known onTwitter, aligning himselfwith B.C.'s NDPgovernment and distancing himself fromtheNDPpremier in Alberta.

"Rigged process, First Nations andlocal communities shut out, oil spill threats, science ignored andnow billions on the line. It's clear this pipeline should not be built," he tweeted.

Notley said Singh's opinions aren't a big considerationin her daily life.

"I think Jagmeet Singh is absolutely, fundamentally ... incorrect in every element of that tweet," she said.

Morneau's update comes as the May 31 deadline draws closer and less than 24 hours after the prime minister gave an evasive answer on the state of projecttalks during a visit to Calgary on Tuesday.

"We continue to work very, very hard, both visibly and behind the scenes," Trudeau said to reporters.

"When we have something to announce, you guys will be the first to know."

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With files from the CBC's David Cochrane and Vassy Kapelos