Natural Resources Minister Jim Carr defends decision to buy Trans Mountain pipeline
Jim Carr explains what went into decision to buy the project for $4.5 billion
The Canadian government's announcement to buy the Trans Mountain pipeline from Texas oil giant Kinder Morgan sparked protests, questions and confusion among British Columbians.
Federal Natural Resources Minister Jim Carr sat down with Stephen Quinn, the host of CBC's The Early Edition, to talk about what went into that decision.
RBC values the existing Trans Mountain pipeline at about $2.3 billion and you're now faced with the construction costs of the project. At $4.5 billion, did you overpay for this piece of infrastructure?
I don't think so.
We think that there is a market for the product at a reasonable price.
It will be a good economic decision in many ways because of the revenues that will come and the capacity of the federal government and the government of British Columbia to take the revenues from this project and invest in communities according to their own priorities.
Did the government of Canada show strong business acumen in maximizing its leverage to get the best deal for its citizens in this situation?
I think so. There was a team of experts negotiating with Kinder Morgan for many, many weeks.
That team, before the final decision was made, had a very firm grip on the economics of the sale.
That was done properly and with all of the safeguards that the Canadian people would want.
Would it not have been prudent to allow the deadline to pass and wait for the company to feel some pressure to act and perhaps extract a better deal?
The conclusion was that this was a fair price — a fair price for the Government of Canada and taxpayers and a fair price for the shareholders.
How much did B.C. Premier John Horgan's opposition to the pipeline have to do with the federal government's decision to finally take ownership of it?
It had a significant impact on the investors of Kinder Morgan, that's for sure. The risk tolerance among its investors was threadbare.
We offered them an indemnification of the political risks, and the ultimate way in which it was resolved was the Canadian government has bought the assets and will sell the assets.
We have no interest in being in the pipeline business in the long term and we believe that there will be interested parties because this is a good project.
What about the risks associated with the First Nations challenges?
We can't anticipate what a court might say. We make no speculation about that.
We have confidence though because of the significant additional consultations that the government of Canada followed.
Do you think this decision is going to cost your party votes in the Lower Mainland?
This is up to the fine people of the Lower Mainland.
These are controversial projects. People feel very deeply about them.
We understand that. We respect that, but we think that the Government of Canada has acted in a way that is in the best interest of the country.
This interview aired on The Early Edition on May 30 and has been edited for clarity and structure. To hear the complete interview, click on the audio below.