TransCanada Corp. will halt all work on an oil terminal in eastern Quebec in response to concerns the project could hurt a beluga habitat.
The company said Monday it is "standing down" on all work in Cacouna after a report by a federal government wildlife committee concluded that the whale is endangered.
TransCanada wants to build a 4,600-kilometre pipeline to carry 1.1 million barrels per day of oilsands crude from Alberta to refineries in Quebec and New Brunswick.
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The planned Cacouna terminal was supposed to be one of the last stops for the crude oil from the proposed Energy East pipeline before being loaded onto oil tankers and shipped overseas.
TransCanada spokesman Tim Duboyce said in a statement the company will "review all viable options" after the company analyzes the environmental report from the Committee on the Status of Endangered Wildlife in Canada.
The committee announced after its meeting last month that the beluga's numbers have dwindled to 1,000 from a high of 10,000.
"Without protection of its critical habitat, this population is expected to shrink further," it said in a news release. "The St. Lawrence Estuary Beluga was assessed as Endangered."
TransCanada's announcement came just a few hours after federal Finance Minister Joe Oliver warned of serious consequences for Canada's economy if the Energy East pipeline is blocked.
In Quebec City for pre-budgetary meetings, he said he understands Quebec's concerns about the $12-billion pipeline.
He noted the federal energy regulator has the means to determine if the project is environmentally friendly and that the pipeline should go ahead if approved by the National Energy Board.
The premiers of Quebec and Ontario said recently the Energy East pipeline project should proceed only when it is environmentally sustainable and has local support.
Oliver said Monday it is "absolutely essential" for the Canadian economy to transport the country's resources to foreign markets.
"We have to create infrastructure to transport oil and gas to the ocean — that's the reality," he said. "And the consequences to not doing that will be very painful for the economy and for Canadians."