Good morning! It’s James Keller in Calgary.
The Trans Mountain pipeline expansion started the week off with some good news, when three Federal Court of Appeal judges upheld its approval and rejected legal challenges from several First Nations.
But then another shoe dropped, when the Crown corporation that owns the pipeline confirmed that the projected cost has jumped by 70 per cent. It’s now expected to cost $12.6-billion by the time it’s up and running in 2022.
Trans Mountain’s CEO says the increase was driven by delays, including from an earlier court challenge that derailed construction in 2018, increased costs for materials and changes to the expansion project. A single year’s delay, the corporation said, costs about $1-billion.
Finance Minister Bill Morneau has played down the increase. He said the project remains financially viable and argues the private sector will be happy to take on a pipeline that will come with a cash flow of $1.5-billion a year. He said the pipeline expansion is moving closer to helping oil producers get the best price for exports, with federal revenues going toward a “green transition."
The government plans to sell the pipeline when the risk is removed, though he wouldn’t say when that might be. He also declined to speculate whether he expects to sell it at a loss. Ottawa already spent $4.5-billion to buy it.
Trans Mountain CEO Ian Anderson says he’s confident in the projected cost and the timeline, even if protests, civil disobedience and other hurdles emerge during construction.
The Alberta government has long seen the Trans Mountain expansion as essential to turning around its economy, which has been battered by low oil prices since 2014. A big part of the problem is that constrained pipeline access has sent Canadian crude prices significantly lower than U.S. prices.
Opponents of the pipeline expansion have vowed to do whatever they can to ensure it never happens, and pointed to the updated cost projections to attack it.
Another project has also emerged as critical to Alberta: Teck Resources Ltd.'s Frontier oil sands mine. The massive oil development is awaiting a decision on federal approval, which could happen by the end of the month, unless the government delays an announcement.
The Alberta government has attempted to draw a line on Teck, arguing that if the federal government truly cares about Alberta’s grievances – which have been amplified since last fall’s election – it will approve the project. The province’s environment minister, Jason Nixon, said Alberta has played by the rules and rejecting the mine would send a “devastating signal” to investors in Alberta and elsewhere.
But the federal government will also need to weigh the potential environmental impact, including greenhouse-gas emissions. The government has also said that Alberta’s own climate plan will play a part in the approval decision.
In B.C., a different type of pipeline is sowing conflict.
LNG development in British Columbia was originally touted as a resource project that could sidestep some of the difficulties faced first by the proposed Northern Gateway pipeline and then Trans Mountain. But the past six weeks have demonstrated that that project, too, is beset by questions surrounding Indigenous rights.
After a judge granted Coastal GasLink an expanded injunction to clear protesters from the site of a proposed pipeline needed to feed natural gas to the proposed LNG facility, provincial government officials have been scrambling to de-escalate the situation.
Hereditary chiefs of the Wet’suwet’en Nation oppose the pipeline, though the project has the backing of all other elected band councils along the route. The hereditary chiefs agreed to seven days of talks with the provincial government and the province brought in former NDP MP Nathan Cullen to facilitate discussions.
But they broke down this week. Early Thursday morning, RCMP moved in to enforce the court injunction. Six people were arrested in the dawn hours of Thursday and RCMP continued Friday to clear the obstacles blockading the path for workers to access the construction site for the pipeline.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.
Around the West:
RAIL CRASH: The cleanup and search for causes of a fiery train crash near Guernsey, Sask., began Friday, even as nearby residents were advised to stay away from their homes because of the amount of smoke still billowing from the wreck. Canadian Transport Minister Marc Garneau responded to Thursday’s crash by issuing a 30-day order that cut in half the speed limit for trains carrying 20 or more cars of dangerous goods. The new speed limit in cities is 20 miles an hour and 25 in other areas.
The reeve of Guernsey, where this week’s derailment is the second in less than two months, says it’s time for the federal government to look more seriously at pipelines to move oil. Jack Gibney of the Rural Municipality of Usborne says “oil is going to move one way or another. We have no choice.”
AUTO INSURANCE: British Columbia’s public auto insurer will transition to what’s known as a no-fault insurance model, virtually eliminating litigation as well as pain and suffering payments, while promising lower premiums and better coverage for those injured in a vehicle accident.
PAY CUTS: Alberta is asking about 24,000 government staff, including sheriffs and social workers, to take a pay cut in their next contract – something their union says is being done out of spite.
RIDE SHARE: The mayor of the Metro Vancouver city of Surrey has stood down in his fight against ride-hailing, saying it’s “time to move on” after a judge ordered the city to stop ticketing Uber drivers. Surrey alleged drivers were operating without a business licence, but Uber filed for an injunction in court where it argued drivers held provincial permits and the city had not created a licensing regime. British Columbia Supreme Court Justice Veronica Jackson ruled in favour of Uber on Friday.
The ruling is the second in as many days to side with ride-hailing companies in B.C. On Thursday, Justice Jackson denied the Vancouver Taxi Association’s bid for an injunction to suspend Uber and Lyft’s operations until a judicial review of their licences could be heard.
CANNABIS: U.S.-listed shares of Edmonton-based Aurora Cannabis slumped Friday after the pot producer issued a bleak outlook and said it plans to book up to $1-billion (US$751.15-million) in charges, as it struggles with high costs and a slow roll out of retail stores in Canada. Aurora shares were down about 16 per cent in Toronto at 11 a.m. ET. Aurora joins other major licensed producers including Tilray Inc and Hexo Corp in announcing job cuts, emphasizing a push toward faster profitability amid rising impatience among investors.
PIONEERING SCULPTOR: Meant to be moved, Katie Ohe’s kinetic sculptures are also tremendously moving. They are beautiful and playful feats of imagination and engineering that provoke wonder and contemplation – and often a good laugh. In a long overdue retrospective, Ohe’s sculptures are being shown together with many works from her archive at Calgary’s Esker Foundation.
BC FILM: B.C. has taken a hit in the competition to play host to high-profile film and TV projects, with Apple TV+ moving production of its elaborate show See to Toronto. The first season of the streaming science-fiction series, which reportedly cost about US$15-million for each of its eight episodes, was produced on Vancouver Island in the Campbell River area, at Strathcona Provincial Park and in Vancouver, generating scores of industry jobs. But producers have decided to shoot a second season in Toronto.
PIPELINE CONTRACTS: Enbridge Pipelines Inc. is defending its plan to contract out capacity on its Mainline pipeline network, days after Canadian Natural Resources Ltd. called the proposal an “abuse” of market power. Enbridge’s plan, filed with the Canada Energy Regulator in December, would require oil companies to enter into long-term agreements covering 90 per cent of Mainline’s capacity.
RODENT CONUNDRUM: Twiggy, the trained water skiing squirrel who performs as a star attraction at boat shows across North America, is no longer welcome in Toronto because of a bylaw that bars keeping a squirrel in captivity. But Twiggy will be performing this week at the Vancouver International Boat Show. A spokesman for the City of Vancouver said the city would launch an investigation because it is against municipal regulations for businesses to use rodents in competitions, exhibitions, performances or events.
BUILDING CONTROVERSY: An office tower proposed for a key site on Vancouver’s downtown waterfront is back with an amended plan, with owners hoping for more public support after the original design was roundly criticized for being too large.
SECLUSION ROOMS: Parents who say they found their autistic son stripped naked and covered in his own feces after he was locked in a seclusion room at an Edmonton-area school have lost an appeal in their lawsuit. The three Appeal Court judges ruled unanimously that the ministry did not breach the charter and that nothing in what was the School Act at the time stated the ministry had to ensure practices were properly implemented.
ROLLING STONES: The Rolling Stones’ new tour includes a sole Canadian stop in Vancouver. The band said Thursday that it will kick off a 15-city leg of its No Filter tour in San Diego on May 8, hitting Vancouver’s BC Place on May 12.
COFFEE CUPS: A B.C. recycler of beverage containers has launched a pilot project that hopes to find a way to recycle the millions of coffee cups that end up in landfills every week. Vancouverites are disposing of an estimated 2.6 million cups a week, however, many of those that are thrown into recycling are contaminated with liquids, or have not been separated from their lid or sleeve – which causes problems in the recycling process and results in them being sent to landfill.
Opinion:
Gary Mason on Teck’s oilsands project: “In the short term, Mr. Kenney could help his cause by creating a more robust climate plan for 2030. It’s no longer Alberta’s God-given right to pollute; no one has that right. I don’t know which way the Liberal government is going to go on Teck Frontier, but if the Alberta government does nothing to help its cause, it will only have itself to blame if Ottawa gives the project the thumbs down.”
Adrienne Tanner on Vancouver co-ops: “The city is not seeking to sell off land, displace moderate or low-income members or hike leases so high that no one can afford to stay. It is asking middle-class co-op members who can afford to pay more to pony up – just like everyone else in Vancouver. Money collected from lease payments will be used to build more co-op housing, either on new sites or through the redevelopment of aging low-density co-ops. It’s hard to argue with that.”
Christopher Wall on Meghan and Harry: “Whatever your take on the soap opera that is the British Royal Family, what we are looking at here seems to be a young family trying to find a little bit of sanity. That’s not the kind of picture I am interested in taking.”
Dennis Shinski on western alienation: “When Western Canadians talk about feeling disillusioned and alienated, don’t think of that as just a political talking point around the economics of the oil and gas industry and the need for climate-change solutions. It’s about actual human beings who, in this downturn, may now be feeling completely rudderless. Human beings who, even before this stretch of struggle, have been steeped in a culture of hyper-masculinity, even when times were good. Human beings whose pain goes unseen, until it’s noticed in suicide-rate spikes and we need to see them. Trust me: For many of these men, asking for help feels impossible. The least we can do is lend them our eyes and our hearts.”
Wendy Cox
James Keller