Agreement Reached to Create and Protect Jobs, Build Trans Mountain Expansion Project

Speech by the Honourable Bill Morneau, Minister of Finance

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Thank you, for being here this morning.

As you have heard me say before, and as the Prime Minister has also said, the Trans Mountain Expansion Project is of vital interest to Canada, and to Canadians.

Our government's position is clear.  TMX is in the national interest.

Getting the Trans Mountain Expansion Project built will preserve thousands of good, well-paying jobs – the kind of jobs that will strengthen and grow the middle class.

It will ensure that we are able to safely get Canadian oil resources to world markets, where we can get a fair price for them.

And it will reassure investors that Canada is a country that respects the rule of law and that gets big, important things done.

It's important to remember, though, that Canada is also a place where we understand that the environment and the economy go hand-in-hand.

The Trans Mountain Expansion Project is no exception.

Our world-leading Oceans Protection Plan, the extensive and ongoing consultations with Indigenous communities, the strengthened environmental standards, and the rigour of the approvals process… all of these factored into the decision our government is announcing today.

So too did the understanding that division among provinces – such as the dispute that has arisen between Alberta and BC – cannot be allowed to fester.

Especially not when the resulting impasse threatens both the livelihood of thousands of workers and Canada's solid reputation as a good place to invest.

And so, for the last few weeks I have been in intense negotiations with Kinder Morgan, Trans Mountain's owner.

These discussions became necessary when the political uncertainty in British Columbia made it difficult for the company to proceed with construction.

The uncertainty caused unnecessary delays, put thousands of jobs at risk – including up to 9,000 jobs in BC – and is holding back Canada's economic growth.

And this is all happening after the Trans Mountain Expansion Project was approved by both the federal government and the province of British Columbia, following the most rigorous process and environmental assessment in this country's history.

So our message today is simple: when we are faced with an exceptional situation that puts jobs at risk, that puts our international reputation on the line, our government is prepared to take action.

To guarantee the summer construction season for the workers who are counting on it, and to ensure the project is built to completion in a timely fashion, the federal government has reached an agreement with Kinder Morgan to purchase the existing Trans Mountain pipeline, and infrastructure related to the Trans Mountain Expansion Project.

The agreement, which is expected to close this August, was approved by Cabinet this morning and is now subject to approval by Kinder Morgan shareholders.

This $4.5 billion investment represents a fair price for Canadians and for shareholders of the company, and will allow the project to proceed under the ownership of a Crown corporation.

The core assets required to build the Trans Mountain Expansion Project have significant commercial value, and this transaction represents a sound investment opportunity.

That's why we chose not to provide a subsidy to Kinder Morgan, but rather to enter into a commercial agreement that will make the most of the economic potential of this project.

It's an agreement that we believe will deliver a real return on investment – for the benefit of British Columbians, Albertans, and all Canadians.

It is not, however, the intention of the Government of Canada a to be long-term owner of this project.

At the appropriate time, Canada will work with investors to transfer the project and related assets to a new owner or owners, in a way that ensures the project's construction and operation will proceed in a manner that protects the public interest.

For Indigenous groups, we will make sure that existing profit sharing or other agreements established with Kinder Morgan remain in effect.

Many investors have already expressed interest in the project, including Indigenous groups, Canadian pension funds, and others.

To facilitate the transfer of ownership, we will extend the federal indemnity to protect any new owner from costs associated with politically motivated delays. The Province of Alberta will also support the project, providing an emergency fund for any unforeseen costs, if needed. In return, Alberta will receive value commensurate to their contribution.

We believe this is the best way to protect thousands of good, well-paying jobs, and the safest and most effective way get our natural resources to world markets.

Make no mistake: this is an investment in Canada's future.

To investors who are considering Canada as a place to build big, important, transformational projects like the Trans Mountain Expansion – know that you have a partner in Ottawa.

One who not only respects the rule of law, but who understands the challenges you're up against, and who will work with you to find solutions that work for everyone.

That's exactly what we did in this case.

And as a result, the Trans Mountain Expansion Project will be built.

Minister Carr will now say a few words about the next steps, and how we intend to move this project forward.

Thank you.