Trans Mountain is a stick right in the eye of the Liberals' own people
Justin Trudeau is going to take hell on all sides for doing what is right and necessary
So, I guess Kinder Morgan wasn't bluffing.
Remember that, only a lifetime and two weeks ago, Finance Minister Bill Morneau seemed downright plummy after announcing his plan to indemnify Kinder Morgan against any losses incurred on the Trans Mountain pipeline.
"We think plenty of investors would be interested in taking on this project, especially knowing that the federal government believes it is in the best interests of Canadians and is willing to provide indemnity to make sure it gets built," he told media at the time.
And then a key word edged its way into the discourse: "bluff."
An anonymous senior government official told Maclean's that the indemnity was a way for Ottawa to avoid being cornered by Kinder Morgan into forking over taxpayer dollars to get the line built.
Volatility and threats
After kiboshing Northern Gateway, and watching silently as Energy East withered, the federal government had spent enormous political capital on Trans Mountain.
Approved by the NEB, Trans Mountain is a mere twinning of an existing line that has operated for decades. This was supposed to be the easy win. Trans Mountain would improve the capacity problems that are forcing Canada to sell its oil at a steep discount to the U.S. — a reality that is costing the country an estimated $15.6 billion a year.
But pipelines, now, are more volatile than the liquids they carry.
They have become a subject of passionate resentment and ecstatic dislike. After B.C. made iffy legal threats in a bid to stall Trans Mountain, Kinder Morgan clearly decided that this kind of religiosity was bad for business. The company announced that it would pull out of the line by May 31 if it could not receive political and legal certainty.
As it turns out, the Liberals were not the brilliant negotiators they imagined themselves to be. Only days ahead of the company deadline, the federal government announced it would buy the existing line outright at a cost of $4.5 billion — with hopes that other investors will step forward to purchase the pipe again once the political and legal heat dies down. The actual cost of constructing the twin is expected to weigh on taxpayers to the tune of $7.4 billion.
Just about everyone will find a reason to hate this solution.
Some blame should be allotted, here, to the previous Conservative government. But I'm dredging my sympathy for the Liberals from a very shallow pond.
It was the Liberals who championed notions of "social licence" for pipeline construction — a term that has no objective meaning, and can provide no legal or regulatory certainty. It was the Liberals who lent credence to the growing paranoia about pipelines by cancelling Northern Gateway. It was the Liberals who helped to undermine public trust in the National Energy Board — the regulatory body that approved these projects. They've since revamped the NEB altogether.
Then the Liberals did nothing for months while a trade war between Alberta and B.C. festered.
It's perfectly commendable for a citizen or a concerned group to protest a pipeline if they disagree with it; it's fair to point out problems at the NEB, or to demand a clear response to marine crises or pipeline leaks. I grew up in B.C. My heart is there, too.
But, at a certain point, these concerns ceased to be reasonable. They became part of a well-organized and very intelligent strategy to choke Alberta's petrochemical industry based on the belief that there is something uniquely pernicious about the oil it's producing.
I have no particular objections to citizens or advocacy groups engaging in these tactics. But for a party to be scoring points with this kind of a game always risks a dramatic reversal. Winning points by undermining faith in democratic institutions — like regulatory agencies — is keeping with the spirit of the age. No institution is perfect, or above reproach or reform, but if you knock down too many pillars, eventually the roof caves in on you, too.
The Liberals now have to rebuild the house. Buying the pipeline was the only play left. It was in the nation's financial interest, but it's also an unapologetic display of federal power and an assertion of confidence in Ottawa's jurisdictional authority. And the Liberals are going to piss off almost everyone by doing it.
A stick in the eye
Nationalizing the pipeline will thwart B.C. and her environmentalists by undermining their stall tactics. This is a stick right in the eye of the Liberals' own people.
Meanwhile, Conservatives will be rightly horrified at the tax dollars put to work to compensate for political failures.
I'm not even sure it's going to win any Albertans over. For generations, this province has defined itself by its opposition to Ottawa generally and the Liberals specifically. It's an ancient human habit to spit into the open palm of an enemy. Nothing engenders resentment more than dependence.
Justin Trudeau is going to take hell on all sides for doing what is right and necessary. He will gain nothing by this for his party. The Liberals will probably lose seats in B.C. that they can never hope to make up in Alberta.
Yet by committing to this pipeline, he's acknowledging Alberta's interests; it is a long-awaited motion of appreciation for the needs of this province and the wealth it brings into a properly functioning Confederation.
This pipeline is going to get built, and that's a victory for Rachel Notley, as well. I am not convinced that this province would have received this kind of support from Ottawa if she hadn't committed to a forward-thinking climate change strategy when she was elected in 2015.
More importantly, Trans Mountain ought to shatter a pattern of enmity by which Albertans have come to define themselves vis a vis the rest of Canada; we are the perpetual suckers of Confederation. Our share of taxes on our high incomes hoovered up and then parcelled out via equalization payments to red ridings in Central Canada. Billions to buddies at Bombardier while the patch suffocated. The National Energy Program ad infinitum.
On Wednesday, Morneau visited Calgary bearing kind words.
"We do want to support the oil and gas sector, and there will be those of you who wonder how much we'll support that sector," he said. "And when you have that question, I want you to think back to yesterday. And that's the example of how strongly we'll support the sector."
Perhaps that, too, was no bluff.
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