Kenney announces offloading crude-by-rail contracts to private sector

Alberta Premier Jason Kenney announced Tuesday that his government has made good on a campaign promise to offload the former NDP government’s $3.7-billion crude-by-rail deals, which Kenney has slammed as poor value for taxpayers.

Predecessor Rachel Notley announced plans last February to move up to 120,000 barrels of oil a day

Alberta Premier Jason Kenney announced on Tuesday that his UCP government has offloaded the crude-by-rail contracts signed by his predecessor, Rachel Notley. (Todd Korol/The Canadian Press)

Alberta Premier Jason Kenney announced Tuesday that his government has made good on a campaign promise to offload the former NDP government's $3.7-billion crude-by-rail deals, which he has slammed as poor value for taxpayers.

Rachel Notley's NDP government signed leases for up to 4,400 railcars capable of carrying  up to120,000 barrels of Alberta crude per day and made agreements with Canadian National and Canadian Pacific to transport crude to American and international markets.

During the election campaign, the UCP pledged to reverse the arrangement, saying the government shouldn't be in the business of moving crude by rail.

"Shipping crude by rail is something that the private sector is in the best position to do by itself," Kenney said Tuesday as he announced the scrapping of the NDP's arrangements.

Kenney said cancelling the contracts will cost taxpayers $1.3 billion, but that through tough negotiations his government has reduced the losses for taxpayers by $500 million.

"This is entirely on the NDP. They never should have made that deal," he said.

"We have managed to reduce the damage."

Kenney said details about the new contracts, of which there are roughly two dozen, cannot be released yet for reasons of commercial confidentiality.

Speaking to the media in Calgary about his recent trips east to Montreal and Washington, D.C., Kenney said they were beneficial.

"I think we very effectively got our message across," he said.

In Montreal last week, Kenney announced a new Alberta trade office in that city. He said it is part of a renewed push in the coming months to strengthen ties and find common ground with Quebec.

The Energy East pipeline project, which would have taken Alberta crude through Central Canada to ports and refineries in New Brunswick, was abandoned in 2017. Quebec had opposed the line within its boundaries on environmental grounds.

Alberta's relationship with Quebec has been edgy. Kenney has questioned Quebec's benefiting from billions of dollars in equalization payments that come from oil profits generated in Alberta while simultaneously opposing pipeline projects that help Alberta build that wealth.

His trip out east also took him to Washington, D.C., to meet with business and political leaders.

Kenney held a series of meetings and spoke with U.S. Secretary of the Interior Greg Bernhardt, Energy Secretary Dan Brouillette and U.S. Trade Representative Robert Lighthizer.

He was also part of a Canadian delegation of premiers that included Deputy Prime Minister Chrystia Freeland.

Kenney said he worked to overcome concerns with the Keystone XL pipeline, which now has a presidential permit and would take more Alberta oil to terminals and refineries on the Gulf Coast.

He said Keystone XL is one of a number of pipeline projects facing some resistance, along with the Line 3 replacement project and Line 5 in the U.S. upper Midwest.

Kenney was critical of progressive Democrats who are seeking the presidential nomination — including Bernie Sanders and Elizabeth Warren — for promising to oppose the Keystone XL pipeline expansion.

With files from The Canadian Press