OK, so Ottawa’s going to buy the Trans Mountain pipeline for $4.5 billion and run it as a Crown corporation.
That’s a good start. (Caveats to follow.)
Theoretically, it could ensure transparency and accountability, even responsibility, to a business in which the private sector adamantly refuses to deliver any such thing.
Possibly, if there’s an actual economic case for building a pipeline, it’ll result in some of the line’s profit remaining in Canada to benefit Canadians, for example by helping to develop cleaner alternative energy technologies, instead of being piped directly to the United States to line the pockets of The Richest Man in Houston* and his fellow Texans at Kinder Morgan Inc.
As an aside, this raises the question of whether Ottawa is paying too much. That requires further analysis — I’ll get back to you about it sometime, maybe even before August when the deal is supposed to be done.
In the meantime, though, I’m sure you’ll have the opportunity to read a metric tonne of politically biased claims by supposedly non-partisan right-wing organizations that hate Prime Minister Justin Trudeau and his Liberal federal government, not to mention the Alberta NDP.
Another aside: This won’t make public opposition to the line’s expansion in Coastal British Columbia go away, although it may allow for proper application of the rule of law so the courts can proceed at their necessarily reasoned pace. It may even increase public confidence about the safety of petroleum export activities — surely a good thing if you’re a pipeline advocate from Alberta.
Potentially, federal ownership and operation of Trans Mountain and its expansion could provide Canada with a limited opportunity to manage the economic impact of the decline in the fossil fuel industry as the world tries to get its addiction to the sticky goo under control.
But it won’t be very effective if Ottawa sticks to the market fundamentalist ideological dogma that has dominated Canadian political discourse for decades and insists this is only a temporary measure and the line will be sold to some opaque and potentially environmentally irresponsible corporation as quickly as possible.
It certainly won’t be effective enough without a publicly owned national oil company to provide government influence of the market. Arguably, the creation of Petro-Canada in 1973 was the best NDP idea the Trudeau Liberals ever gave in to — the Pierre Trudeau Liberals, that is. Well, we all know how that ended. But that doesn’t alter the fact a country with a resource-dominated economy can’t have much control over its fate without a government hand in the resource sector.
The fact Petro-Canada was an NDP inspiration, built on an NDP bill reluctantly accepted by Pierre Trudeau’s government, may account for why the corporation was so swiftly abandoned, to Canada’s great disadvantage. After all, as Tommy Douglas famously pointed out to us mice, the difference between Liberals and Conservatives is no more than the difference between black cats and white cats. (This was before the NDP rebranded itself as the party for orange cats.)
According to The Globe and Mail, tut-tutting as if this were a bad thing, “the Liberal government’s move amounts to a nationalization of the critical pipeline project.” (Remember, nobody complains when other essential public infrastructure, like roads, are “nationalized.”)
Regardless, sticking to the talking points in his department’s press release, Finance Bill Morneau insisted yesterday “it is not the intention of the government of Canada to be a long-term owner of this project.” Well, it should be, and while they do own it, there is at least faint hope a wiser course could be charted, if only because no one else wants the thing.
For its part, KM will supposedly help Ottawa find a private buyer for the line, although one imagines its executives’ enthusiasm for that will wane once Ottawa’s cheque clears their bank.
The Alberta government led by NDP Premier Rachel Notley said yesterday it is prepared to finance the deal to the tune of an additional $2 billion. “Alberta’s contribution would range from zero to a maximum of $2 billion, and would be payable only upon completion of the project,” its press release stated. “If Alberta’s backstop is called upon, Alberta will receive equity in the completed project.”
Yesterday’s announcement puts Canada’s “Conservative” opposition — which is not really conservative, but part of a radical market-fundamentalist internationalist ideological movement now apparently headquartered in Munich — in an uncomfortable spot.
They’ve been screaming for months that Justin Trudeau’s government simply must do something to ensure the completion of the $7.4-billion pipeline expansion megaproject. Now it has.
In addition, the federal and Alberta governments have called Alberta Opposition Leader Jason Kenney’s bluff. Less than two months ago he was demanding the same thing. “I would be prepared in principle for the Alberta government to take an equity position in this project in the expansion of Trans Mountain, but if we do so, Ottawa has to be there with us,” the United Conservative Party leader said on April 8.
Of course, when it comes to talking points, modern Conservatives can turn on a dime. They had already done so yesterday before breakfast was cold. The decision is proof the government is driving investors from Canada, the poodles of Thinktankistan and the fields of Astro-Turf were soon yapping along in unison.
“The message that is being sent to the world: that in order to get a big project built in this country, the federal government has to nationalize a huge aspect of it,” said federal Conservative Opposition Leader Andrew Scheer.
In reality, it’s the almighty market worshipped by Scheer’s party that’s driving investors away from petroleum. And the scamsters at KM are doubtless smirking, having profitably executed their exit strategy without a hitch.
Despite what Scheer says, corporations like Kinder Morgan want to do business in Canada because we have the rule of law, not in spite of it. They can hardly complain if they find the delays caused by the rule of law inconvenient. It’s part of the cost of doing business in a democratic federation, and accounting for that is a component of corporate competence. It’s not the rule of law if it just includes the bits that suit your interests!
Still, this may prove to be the best thing for Canada under the circumstances. Even though many Canadians are inclined to think it would not be a bad thing for a company that came up with a scheme like this to be allowed to fail or bear the cost of walking away, that’s too much to hope for in the face of a almost total elite consensus the project must be completed. This is probably true even if you don’t believe, as University of Calgary economist Trevor Tombe opined for the CBC yesterday, that the benefits of the pipeline outweigh the risks.
What would the whiny Scheer do? Declare the country to be a unitary state? Good luck with that!
On that note, let’s give the final word to Philippe Couillard, premier ministre of Quebec. “I hope we’ll no longer hear remarks in the rest of country about aid to Bombardier,” he was quoted saying yesterday.
That, alas, is asking too much of conservative politicians in Alberta.
* Thank you, Tzeporah Berman, for that one!
This post also appears on David Climenhaga’s blog, AlbertaPolitics.ca.
Photo: Adam Scotti/PMO
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