Analysis

On Trans Mountain, Trudeau chose the least awful of his political options

The collapse of the Trans Mountain pipeline project would have been a significant setback for one of Canada's foundational industries. Its loss would encourage the promoters of Western resentment and inspire a new round of anguished questions about the federation's ability to function.

The risks are profound. For the prime minister, the alternative was worse.

Prime Minister Justin Trudeau participates in an armchair discussion at a luncheon given by the Economic Club of New York in New York on Thursday, May 17, 2018. (Sean Kilpatrick/THE CANADIAN PRESS)

It could be worse for Justin Trudeau. He could be not buying a pipeline.

The collapse of the Trans Mountain pipeline project — which we assume is what would have happened without a deal this week — would have been a significant setback for one of Canada's most significant industries, a setback that would be measured in dollars and jobs.

The loss would have encouraged the promoters of Western resentment while inspiring a new round of anguished questions about the federation's ability to function. Meanwhile, the Liberals have tied their climate plan to a concurrent commitment to get oil to tidewater.

In 2013, Trudeau went to Calgary and declared that getting Canadian resources to market was a "fundamental role of the government of Canada." The failure of Trans Mountain would have weighed heavily against him — not least because Trudeau was supposed to succeed in building a pipeline where Stephen Harper had failed.

As Harper himself said in 2009 when his government put $7 billion into two auto manufacturers, "the alternative to what we're doing today would be vastly more costly and more risky."

That might have been an easier deal to justify — the Americans were doing it too, the global economy had gone wobbly and oil executives weren't involved. But the same problem confronts Trudeau now that confronted Harper then: the likely alternative is terrible.

'When it's in Canadians' advantage to know them...then of course that's going to be fully transparent,' says Bill Morneau. 8:23

Trudeau's purchase could very well pay off. The Liberals could find a new buyer in relatively short order. Regardless, construction should be able to proceed. Someday, the federal government might be able to flip the pipeline at a profit.

A year from now, Trudeau might be able to say he is getting something done (though the achievement will be tempered by the fact that it took public funds to do so). And voters beyond Alberta might appreciate the economic security.

But buying a pipeline is still only somewhat less painful than not buying it.

'A sad day for taxpayers'

Those environmentalists and Indigenous groups who don't support the project now have new reasons to be upset. Quebec politicians are grumbling about provincial rights. And the funding directed toward this transaction will now be invoked as a point of comparison whenever anyone wants to lament that the government is not spending more in some other area.

In the Commons Tuesday afternoon, the NDP's Nathan Cullen compared the money being spent on the pipeline to the $3.2 billion it would cost to "provide safe drinking water for every kid living on reserve in this country" — as if this was a zero-sum choice between funding one or the other.

Legal challenges remain to be settled. British Columbia's court reference will still be heard. And some people will put themselves in the way of construction and invite the authorities to arrest them.

Consevative Leader Andrew Scheer criticizes the government's decision to buy the Trans Mountain pipeline from Kinder Morgan. 0:53

Barring a quick sale, the federal government must manage a pipeline. Failure on the Trans Mountain expansion now would come at some direct cost to the government. And for as long as the government owns the project, there will be no space between the national interest and what was a private initiative.

"Giving $4.5 billion to a Texas oil company is a failure of leadership that shows that Prime Minister Trudeau has no vision for the future," NDP Leader Jagmeet Singh said Tuesday, tearing into Trudeau for not directing the sum at clean energy sources.

"This is an extremely sad day for Canadian taxpayers," said Conservative Leader Andrew Scheer. He's upset that the money is being spent at all. "The prime minister is forcing them to fix his failure on Canada's energy sector. It didn't have to be this way."

For Trudeau, none of this is ideal — though he seems at least to have rebutted the Conservative claim that he does not genuinely support the oil and gas sector.

Green Party Leader Elizabeth May says the decision to buy the Trans Mountain pipeline will go down in history as one of Canada's greatest epic, economical boondoggles. 1:13

The cost of keeping Trudeau's hope alive

Scheer's argument is that the government could have moved faster to settle the uncertainty created by British Columbia Premier John Horgan's musings about provincial jurisdiction. In that alternate history, the federal government would have asserted its jurisdiction somehow while making a reference to the Supreme Court.

But that still would have invited some risk. It's also not obvious that it would have returned a ruling before Kinder Morgan's May 31 deadline, or that it would have appeased the company (the Senate reference, for example, took 14 months to conclude).

Alternatively, the Conservatives say something should have been done to save the Northern Gateway or Energy East projects — but neither of those projects enjoyed widespread political support either.

But if you're interested in the view from hindsight, you could go back decades to consider the unresolved questions about climate change, Indigenous reconciliation and resource development that have brought us to this point. Perhaps it was inevitable that there was going to be a price to pay someday.

Trudeau's idea was that all those goals could be pursued together, with some general consensus: a price on carbon could be implemented, a pipeline could be built and Canada could begin to repair its relationship with Indigenous peoples. Maybe not everyone would agree with all of it. But maybe enough people could find something in the plan to support.

The alternative might be a government that chooses between pricing carbon and building a pipeline.

But the cost of keeping Trudeau's hope alive can now be measured in billions of dollars. And the Trudeau government's credibility is even more deeply invested in this project now.

The federal government’s decision to buy the Trans Mountain pipeline for $4.5B has sparked fierce debate, but it’s worth pointing out there’s a long tradition of government financial support in the energy sector. No investment will ever be risk-free, but if the past is any indication, it's proven rewarding. 2:06

About the Author

Aaron Wherry

Parliament Hill Bureau

Aaron Wherry has covered Parliament Hill since 2007 and has written for Maclean's, the National Post and the Globe and Mail.

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