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Report on Business Ottawa sets mid-June deadline to decide on Trans Mountain pipeline expansion

Steel pipes that were to be used in the oil pipeline construction of Kinder Morgan Canada's Trans Mountain Expansion Project at a stockpile site in Kamloops, B.C., Aug. 30, 2018.

Dennis Owen/The Globe and Mail

The federal government intends to decide whether to reapprove the Trans Mountain pipeline expansion before the end of June, raising the prospect for construction to resume this summer after a year’s delay.

In a statement issued Thursday, Natural Resources Minister Amarjeet Sohi said he sent a letter Wednesday to Indigenous communities along the route in which he indicated the government had extended its deadline from May 22 to June 18.

“Our goal is to make a decision at the end of this period,” Mr. Sohi said in the statement.

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The minister has insisted the federal cabinet has not determined yet whether to reapprove the pipeline expansion project, which had its original permit quashed by the Federal Court of Appeal last August.

However, the Liberal government purchased the pipeline for $4.5-billion last May after Kinder Morgan Inc. shut down construction work owing to the political risk that it would be derailed. As part of the purchase deal, Ottawa committed to financing the expansion project.

After considering again the issues raised by the court ruling, the National Energy Board concluded in February that the project is in the national interest. The federal cabinet had 90 days to respond to the NEB ruling, but extended that by roughly a month to complete the consultations with Indigenous communities.

The Trans Mountain project was a major issue in this week’s Alberta election after its delay fuelled anger in the province over the lack of sufficient export capacity for its crude oil and over Ottawa’s inability to get new projects built.

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United Conservative Party premier-designate Jason Kenney vowed on Wednesday to use all the powers available to his government to get the Trans Mountain project moving again, including disrupting oil and gasoline shipments to British Columbia if the NDP government there continues in its effort to block it.

“I think Prime Minister [Justin] Trudeau knows that if we can’t get coastal access for our energy, then this new government will vigorously stand up for Alberta,” Mr. Kenney said Wednesday while speaking at the provincial legislature.

The appeal court quashed the original federal approval of the project issued in November, 2016, ruling Ottawa had not adequately consulted Indigenous communities and that the National Energy Board had failed to properly assess the effects of increased tanker traffic.

Natural Resources Canada continues to consult with Indigenous communities along the route in an effort to accommodate their concerns, although several First Nations communities remain implacably opposed to the expanded oil sands pipeline. Some First Nations leaders threaten to take any reapproval back to court, arguing Ottawa was consulting in bad faith because it has a major financial stake in the project.

Oil industry supporters have slammed the Prime Minister for failing to complete pipelines. At a Bank of Nova Scotia investor conference in Toronto this week, a parade of industry executives said the lack of access to markets is a crippling issue for the industry.

However, environmentalists argue the Liberal government’s purchase of the oil sands pipeline is inconsistent with Canada’s commitment to reduce greenhouse gas emissions that cause climate change. Mr. Trudeau said the government is determined to both fight climate change and ensure Canadian energy producers have access to world markets for their production.

With a report from Justin Giovannetti

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