Federal government plans to sell stake in Trans Mountain pipeline expansion to Indigenous groups

The federal government has taken the next step in its commitment to offering Indigenous groups an opportunity to buy into the Trans Mountain pipeline expansion project.

According to the press secretary for Finance Minister Chrystia Freeland, a letter addressing the opportunity was sent to Indigenous groups last week.

The letter, as first obtained and reported on by Bloomberg, reportedly lays out the plan to sell a stake in the Trans Mountain oil pipeline to eligible communities through a special-purpose vehicle. It also reportedly lays out the financial support the federal government will be giving the groups so "they don't have to risk any of their own money to participate."

WATCH | Trans Mountain expansion could be Canada's last major pipeline project:

Trans Mountain expansion could be Canadas last major pipeline project

1 year ago

Duration 1:44

The long saga over the Trans Mountain pipeline expansion is nearing an end as the project enters its final phase. With oil production growth slowing in western Canada, some industry experts believe this could be Canadas last big oil pipeline project.

The letter reportedly says the federal government will soon start discussions with Indigenous groups along the Trans Mountain expansion route and shipping corridor.

Bloomberg reports the letter was dated Aug. 2.

The government first announced its intention to explore the possibility of the economic participation of 129 Indigenous groups in the Trans Mountain project in March2019.

This commitment was in response to interest from Indigenous groups, said a government of Canada press release. At the time, it said economic participation could include "equity ownership, revenue sharing, and resource 'royalty' agreements."

Indigenous reaction to expansion

The Trans Mountain pipeline expansion project, which will see a "twinning" of the current pipeline along its route from Strathcona County, Alta., to Burnaby, B.C., crosses through many traditionalIndigenous territories and reserves.

While some Indigenous groups are highly opposed to the expansion, citing lack of consultationand environmental concerns, some have seen the pipeline as a business opportunity and expressed an interest in purchasing it.

The federal government bought the Trans Mountain pipeline for $4.5 billion from Kinder Morgan in 2018 and committed to its expansion in 2019.

In March 2023, the cost of the project reached $30.9 billion a 44 per cent increase from the $21.4-billion cost projection from a year priorand more than double an earlier estimate of $12.6 billion.

Indigenous groups set on pursuing ownership of the pipeline have said they are "not going away" even as costs rise.

According to Bloomberg, the Indigenous groups' share of the Trans Mountain expansion through the special-purpose vehicle will allow them to "jointly exercise governing rights," and groups that take part in the special-purpose vehicle will reportedly not be excluded from participating in later offers of equity in the pipeline.