Agreement Reached to Create and Protect Jobs, Build Trans Mountain Expansion Project
May 29, 2018 – Ottawa, Ontario – Department of Finance Canada
The Government of Canada is committed to making investments that create good, well-paying jobs that help strengthen and grow the middle class; that help get Canada's resources to world markets; and that deliver economic benefits for all Canadians now, and for years to come.
Finance Minister Bill Morneau and Natural Resources Minister Jim Carr today announced that the Government of Canada has reached a commercial agreement with Kinder Morgan in order to secure the timely completion of the Trans Mountain Expansion Project.
The agreement will guarantee the resumption of work for the summer construction season, protecting thousands of jobs in Alberta and British Columbia. Federal loan guarantees will ensure that construction continues through the 2018 season, eliminating the uncertainty for families whose financial security relies on this project going ahead this year.
In addition, the Government of Canada has reached an agreement with Kinder Morgan to purchase the company's Trans Mountain Expansion Project and related pipeline and terminal assets for $4.5 billion. The transaction is expected to close in August 2018.
This 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.
It is not, however, the intention of the Government of Canada to be a 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.
The Government will extend federal indemnity to protect any prospective new owner from costs associated with politically motivated delays. The province of Alberta will also contribute to get the project built. Alberta's contribution would act as an emergency fund and would only come into play if required due to unforeseen circumstances. In return, Alberta will receive value commensurate to their contribution, through equity or profit-sharing.
Taking action now to ensure completion of the Trans Mountain Expansion Project will deliver long-term economic benefits to Canadians – protecting jobs, ensuring that Canada's resources can get to world markets safely and efficiently, and preserving Canada's reputation as a good place to do business.
"Our government believes that the commercial agreement we have reached with Kinder Morgan is the best way to protect thousands of good, well-paying jobs while delivering a solid return on investment for Canadians. This is an investment in Canada's future."
- The Honourable Bill Morneau, Minister of Finance
"Today's agreement will help advance Canada as an energy leader, as a place where good projects get built. This is yet another step in building an energy future with Canadians where the environment and economy go hand-in-hand."
- The Honourable Jim Carr, Minister of Natural Resources
The Trans Mountain Expansion Project involves building a new pipeline along the existing Trans Mountain Pipeline running from Edmonton, Alberta to Burnaby, British Columbia, and expanding the capacity of the terminal in Burnaby.
This expansion will increase daily capacity from 300,000 to 890,000 barrels, while improving market access to the US Pacific Coast and Northeast Asia.
In the course of the federal review of the project, the Government consulted 117 potentially affected Indigenous rights holders for four additional months, marking the deepest federal consultations ever done on a major project.
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Office of the Minister of Finance
Department of Finance Canada
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