The plan is to buy the pipeline and pipeline infrastructure assets from Kinder Morgan with cabinet approval already in place and only now subject to Kinder Morgan shareholder vote.
The Canadian pipeline industry welcomed news Tuesday that the Trans Mountain expansion pipeline is more likely to be built, but expressed grave misgivings over the federal government's decision to buy both the expansion and the existing line in order to achieve that goal.
Calgary-based Kinder Morgan Canada, a unit of the Houston-based parent, was little changed at C$16.59 in Toronto trading Monday, for a market value of C$5.76 billion.
Morneau called the purchase an "exceptional situation" and said the government doesn't intend to be a long-term owner of the pipeline.
The pipeline connects oil sands facilities near Edmonton, Alberta, to tanks in Burnaby, near Vancouver on Canada's west coast.
Notley says there is more certainty around the project than there has ever been and she doesn't plan to use her province's legislation to regulate the flow of oil exports for now.
One institutional investor in NY, who spoke on condition of anonymity, said that if the pipeline is built he expects the federal government to make $2 billion in profit when it eventually sells the asset.
Steve Kean, chairman and chief executive of Kinder Morgan Canada Ltd., said the deal represents the best opportunity to complete the expansion project.
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"We do not believe that this outcome will instil investor confidence in Canada", Canadian Energy Pipeline Association president and CEO Chris Bloomer said in a release, in which he added that he was pleased the project would be built. "It must be built and it will be built", Morneau said.
Back in April, Kean had threatened to cancel the project unless Ottawa could provide assurances the company would be able to construct the pipeline through B.C. He also asked Ottawa to provide financial assurances the company wouldn't lose money building the $7.4 billion expansion to the system given the B.C. NDP government's continued opposition.
He said the pipeline purchase provided the federal jurisdiction needed to overcome British Columbia's opposition, but did not say how it could force the province to allow construction.
"The majority of Canadians support this project".
In British Columbia, Premier John Horgan said, "Tens of thousands of B.C.jobs depend on pristine coastal and inland waters".
Ottawa is pressing ahead, firmly of the opinion there is no doubt about its jurisdiction.
In addition to the initial costs of paying to nationalize a massive energy enterprise, Canada's CBC reports that the government could be obliged to spend billions more to finish the expansion.
This decision makes flawless sense so I'm a little surprised that Justin Trudeau's government is behind it.
Canada loses $15 billion every year on the sale of oil because the US remains its only export customer, resulting in a lower price, Trudeau argues.