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Federal government spending $4.5B to buy Trans Mountain pipeline, BC terminal

Federal government spending $4.5B to buy Trans Mountain pipeline, BC terminal

"We've agreed to a fair price for our shareholders and we've found a way forward for this national interest project", he told a conference call with financial analysts.

According to the agreement, the two parties will work with the board to seek a third party buyer for the system and the expansion through July 22, 2018. Construction will continue through the 2018 season, and the federal government will transfer it to one or more new owners when "appropriate". The deal, which includes the expansion, related pipeline and terminal assets, is expected to close in August.

Finance Minister Bill Morneau and Natural Resources Minister Jim Carr announced the plan Tuesday in Ottawa.

Alberta Federation of Labour president Gil McGowan said he's impressed with the federal government for "taking decisive action".

When the sale is finished, Canada will continue construction on its own, with plans to eventually sell it all in the future once market conditions improve.

Kean did not say why he made a decision to sell rather than absorb the risk of further delays to Trans Mountain.

The government has said it is willing to cover the costs of budget overruns on the pipeline caused by political interference from British Columbia, but the company has not yet indicated if that will be enough to convince it to put shovels in the ground.

More news: Flash flood hits USA state of Maryland

The plan - similar to how Canada financed and managed shares in General Motors and Chrysler in 2009 during the financial crisis - will include a new Crown corporation to manage the project.

The expansion stretches between Edmonton and Burnaby, B.C.

Ottawa has the constitutional authority to build interprovincial projects like pipelines, but B.C. Premier John Horgan has gone to court to get a judge to weigh in on whether B.C.'s jurisdiction for the environment would allow him to regulate what flows through the pipeline. This move comes as the pipeline project faces fierce opposition including the province of British Columbia and environmental groups.

The government was immediately slammed from all sides for its stunning move.

May said Indigenous rights were not being respected in regards to the permits issued to twin the existing pipeline. The company said it would decide on the pipeline project's fate on 31 May.

Buying the pipeline outright had become increasingly likely after Prime Minister Justin Trudeau first pledged only to backstop it.


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