Roundup: Trans Mountain and Phoenix

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The government announced yesterday morning that they were going to acquire the Trans Mountain pipeline and the project to twin it from Kinder Morgan – but that this would be a short-term acquisition if another buyer can’t be found before August. In the meantime, a loan would be extended to Kinder Morgan to begin construction immediately. Rachel Notley cheered and said that it’s time for Albertans to pick up tools and get to work on building it. Morneau, incidentally, won’t say what those construction costs will be, as that’s commercially sensitive information that could undermine the process for finding a buyer for the pipeline. As for who some of those buyers might be, here’s a look at that question. The buyout – if it happens – won’t eliminate opposition, but it changes the legal situation for BC in that federal paramountcy is even more prevalent than it was before. BC premier John Horgan says that his fight will carry on, but he’s suddenly saying that this is all because the federal oceans protection plan isn’t good enough, which is…new, and not terribly convincing. As for Indigenous activists, some say that the announcement is tantamount to a “declaration of war,” but other Indigenous communities are seeing this as an opportunity to buy a stake in the pipeline to benefit their communities.

https://twitter.com/InklessPW/status/1001476415815127041

https://twitter.com/kevinmilligan/status/1001481702470905857

https://twitter.com/kevinmilligan/status/1001486610729394176

The Conservatives immediately stated that this was all because of Liberal incompetence, that Kinder Morgan never said they wanted to sell, that they only wanted “certainty,” and then Andrew Scheer engaged in a bunch of revisionist history that falsely claimed that other pipeline projects never got government financing (it’s like he’s never read about the Trans Canada Pipeline construction in the 1950s, not to mention the development of the Hybernia offshore oilfield, or the development of the oilsands themselves). Oh, and Scheer’s definition of “certainty” that he would provide includes forgoing the current environmental assessment bill (has he talked to environmental lawyers or looked at the kinds of court challenges that the Conservative legislation has generated?) and his insistence that they could somehow “assert” federal jurisdiction by means of a declaration or a bill is ridiculous because they already had jurisdiction. The pipeline crosses a provincial boundary, thereby making it federal. Jurisdiction was never seriously in question. His MPs and other federal and provincial mouthpieces have been trying to spin this as some kind of conspiracy that Trudeau is only buying the pipeline in order to take control of it and shut it down so that they can shut down the entire oil sector. Seriously? You expect people to believe that, after Trudeau has staked an enormous amount of political capital on this very move? Really?

In other reaction, Andrew Coyne sees this as not all bad news (though I’m not sure how much more the Liberals could have done to avoid it), while John Ivison sees irony in the government “getting into the pipeline business” on the same day as the Auditor General blasted them for an inability to manage big projects. Tim Harper sees this as a potential precursor to tougher days ahead for Trudeau, while Jason Markusoff notes that this will make it hard for Albertans to sustain the narrative that Ottawa hates them (though by gods, the Conservatives in Ottawa are really trying). Andrew Leach also gives a very detailed analysis of the purchase in Twitter threads here, here, here, and here.

From the Auditor General’s report:

Auditor General Michael Ferguson released a second scathing report on the Phoenix pay system that ultimately found that it was built on false economy, and that when IBM told them the price tag to build the system that was beyond their budget, the public service cut away at it until it fit said budget – and lo, it didn’t work as a result. Ferguson found that because of the culture of “obedience” in the civil service, no one challenged what was going on, and remained focused on their own timelines and budgets without looking at the overall whole and how it wasn’t coming together, not to mention the fact that any lines of accountability were so blurred as to be meaningless. Part of the finding is that a “culture change” is needed within the civil service to prevent another similar boondoggle in the future, but I say good luck with that, so long as we have a culture that is not only risk-averse, and one that avoids all personal responsibility, but by which wrongdoers are ultimately protected from consequence by unions.

Also from the report was the revelation that the government has used inflated statistics to make it look like more Indigenous kids are graduating high school than actually are, as well as other statistics that don’t accurately reflect the labour situation on those reserves. Other chapters in the report touched on military justice, consular services being too slow to report instances of torture or other rights violations, and that the Champlain Bridge (*drink!*)  had unnecessary cost overruns.

Good reads:

  • In case Trans Mountain wasn’t a big enough economic story, a CP Rail strike hast begun that can grind the economy to a halt in days. Whee!
  • Chrystia Freeland is hinting that there could be retaliation from Canada if Trump tries to go ahead with steel and aluminium tariffs.
  • Ahmed Hussen says that he’s discussing ways to modernise the Safe Third Country agreement with his American counterparts.
  • As mentioned in Senate QP, Canada is considering a WTO challenge to Italian protectionism that is blocking imports of durum wheat from Canada.
  • Facebook whistleblower Christopher Wylie appeared (by video) at Ethics committee yesterday and said that AggregateIQ gave false testimony.
  • Wylie also fended off accusations that he helped the Liberals engage in psychometric targeting. (They know what those election results were, right?)
  • Here’s a look at some of the economic challenges facing investment in this country, exacerbated by the tax cuts south of the border.
  • Several Canadian banks are under investigation for violations of consumer rules, like around sales practices (but we have few details to go by).
  • The Commons Speaker revisited the point of order that sparked Friday’s filibuster meltdown, and explained his reasons for not entertaining the NDP’s point.
  • Murad Hemmadi looks into the myths of ethnic voting blocs in Canadian elections.
  • Susan Delacourt wonders what lessons the federal Conservatives hope to learn from the Ontario PC doom spiral (and she has a more detailed exploration here).
  • Delacourt also talks to pollsters to try and discern what is driving the electorate.
  • My column looks at why a pipeline bill never would have helped the Kinder Morgan Trans Mountain situation, so people should stop waving it around as a “failure.”

Odds and ends:

The government has now passed their motion to begin midnight sittings for the rest of the spring sitting, and the opposition has made their ritual protestations.

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One thought on “Roundup: Trans Mountain and Phoenix”

  1. I’m wondering if this doesn’t go back to the Liberal’s promise to fix the NEB, which they didn’t, and allowed the pipeline approval under very loose guidelines. I think by not having a more rigorous process that allowed more intervenors, and cross examinations, they led Kinder Morgan, Alberta, and BC down the garden path. We now Know, and likely KM did too, that the decision was made well in advance of any review process.They severely underestimated both the degree of opposition to the project, as well as a failing business case for Alberta bitumen at a time when it is becoming far cheaper to transport and refine light sweet crude.
    I think this buyout is meant to avoid a huge NAFTA suit by KM, and it now leaves us on the hook for any difficulties or delays in the construction. KM is now firmly in the driver’s seat, with a gun held to the heads of every taxpayer in Canada. The $4.5 billion is just the tip of the iceberg here, for a pipeline that may never be fully utilized, if it ever gets completed. In other words, the most humongous white elephant in Canadian history.

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