Good morning,
Congratulations: You now own a pipeline. Or at least, you will by August, as the federal government prepares to spend $4.5-billion to buy the Trans Mountain pipeline from Kinder Morgan and take over an expansion project that has been entangled in legal and political opposition.
The decision, announced by Finance Minister Bill Morneau just days before a self-imposed deadline from Kinder Morgan, clears the way for work to begin for the summer construction season and in the meantime, the federal government says it’s looking for a private buyer. But many of the details about the federal ownership, including how much it might ultimately cost or how long it will last, remain unclear, nor is it obvious which private-sector buyers would even be interested in the troubled project.
The move dramatically reshapes the debate about the pipeline expansion and will see Ottawa become not only an investor, but the main target of opponents who have vowed to stop the project at any cost. Environmentalists predict “all hell is about the break loose” in B.C., where protests near Kinder Morgan’s terminal have already resulted in dozens of arrests.
For Kinder Morgan, it likely means more than $1-billion in profit from the sale, but it’s giving up hundreds of millions in future earnings and even more in tariffs.
For more on what Ottawa has proposed, and what the deal could mean, read our explainer.
Campbell Clark (The Globe and Mail) on the only option left: “This was the last chance for years. If there was going to be a pipeline to carry Alberta oil to the ocean in the next decade or so, the only option left was to put public money into Trans Mountain. When it came to it, with bad options and little time, the Liberal government of Justin Trudeau took a big political gamble. It bought the pipeline. And Mr. Trudeau put his government on the line.”
Gary Mason (The Globe and Mail) on Trudeau’s Faustian bargain: “In a move reminiscent of the kind of bold, audacious gambit his father, Pierre Elliott, was once known for, Prime Minister Justin Trudeau just nationalized a pipeline. It represents the biggest gamble of his political life.”
Vicky Mochama (Toronto Star) on Trudeau’s views: “After all, he didn’t go into government to offer to buy a pipeline. But life, as they say, comes at you quick.”
Globe and Mail editorial board on our money and our pipeline: “When Prime Minister Justin Trudeau kept telling Canadians, ‘We are going to get the pipeline built,’ they probably didn’t think that by ‘we’ he meant them. They saw it as more of a royal ‘we’ that referred to his government’s efforts to help Kinder Morgan complete the expansion of the Trans Mountain pipeline on budget. But no.”
Victoria Times-Colonist editorial board on opposition to the pipeline: “ Some First Nations are not suddenly going to change their views on what they see as violations of their traditional territories and rights. Those opposed to the pipeline expansi on will not suddenly feel better about it just because Ottawa is in charge, especially when they consider their tax dollars will now be paying for the project they oppose.”
Konrad Yakabuski (The Globe and Mail) on being all in: “This is not the first time a Liberal government in Ottawa has decided to meddle in the oil patch. But it’s the first time it’s been done in defence of Alberta’s interests and in defiance of its own political base. That tells the world how important it considers the proposed Trans Mountain pipeline to be for Canada.”
Elmira Aliakbari and Ashley Stedman (The Globe and Mail) on making things worse: “Clearly, the federal government has failed to address the real issues facing Canada’s energy sector. To make matters worse, it’s now nationalized the Trans Mountain project, setting a troubling precedent. For these major energy missteps by Ottawa, Canadians will ultimately pay.”
Jeff Rubin (The Globe and Mail) on other options: “As for serving the broader national interest, as the Finance Minister claims, Canada’s strategic interests do not rest with feeding more cheap feedstock to U.S. West Coast refineries and then buying back refined products at a huge price spread. But they may entail building more refinery capacity in either Alberta, where the heavy oil is produced, or B.C., where the fuel is piped. That would mean more Canadian refinery jobs, lower B.C. pump prices and fewer tankers in Vancouver harbour.”
This is the daily Politics Briefing newsletter, written by Chris Hannay in Ottawa, –Toronto and James Keller in Vancouver. If you’re reading this on the web or someone forwarded this email newsletter to you, you can sign up for Politics Briefing and all Globe newsletters here. Have any feedback? Let us know –
CANADIAN HEADLINES
The Auditor-General of Canada says the Phoenix pay system was an “incomprehensible failure” that raises serious questions about the public-service workplace and its ability to get things done without problems. As one example, the auditor points out that a pilot project to test the pay system was scrapped because of serious bugs in the program – but the system was approved for a launch anyway, just without the testing.
Canadian Foreign Minister Chrystia Freeland was in Washington once again, this time to lobby at the eleventh hour for an exemption to the U.S.’s steel and aluminum tariffs. She said that Canada is “very ready” to retaliate if the White House follows through on its threats. The U.S. slapped duties of 25 per cent on steel and 10 per cent on aluminum imported into the U.S. but gave Canada and Mexico exemptions that expire on Friday. The tariffs were imposed due to national security reasons, something Ms. Freeland scoffed at saying “the idea that we could in any way pose a national security threat is, frankly, absurd.”
Social media giants like Facebook and Google should be forced to reveal details of political advertising, whistleblower Christopher Wylie says.
A group of independent senators mostly named by Justin Trudeau say the marijuana legalization bill does not require any more major amendments. It’s set for a vote in the Senate next week.
The B.C. government is considering buying dilapidated single-room hotels in Vancouver’s Downtown Eastside amid repeated complaints that landlords have let buildings fall into disrepair. A Globe and Mail investigation this week found the Sahota family has operated several notorious buildings for decades despite a trail of fines, investigations and, more recently, class-action lawsuits.
Ontario Liberal Leader Kathleen Wynne said she regrets the way her government handled electricity prices. “I probably reacted later than I should have, I probably should have acted more quickly, but we were looking for ways to reduce prices that were responsible. It took some time, it meant that people were pretty angry, and rightly so, about how quickly their electricity prices had gone up,” Ms. Wynne said in a meeting with The Globe and Mail’s editorial board.
Renfrew-Nipissing-Pembroke is as safe a Tory bastion as they get, but residents are uneasy about helping to bring Doug Ford to power – and distrustful of everybody else. What’s a voter to do but stay home or go fishing? The Globe’s Roy MacGregor reports from Apathy Valley on this Ottawa-area riding that’s dreading election day.
Mr. Ford, leader of the Ontario Progressive Conservatives, defended the lack of a full, costed platform. He promises that it will come before election day. Advanced voting has already began in Canada’s most populous province. Election day is June 7.
The strike at York University is officially the longest labour dispute at the institution and the longest at an Anglophone university in Canada. It’s also dividing the Ontario Liberals and NDP as they try to amass support from progressives during an election campaign.
Joshua Boyle, the former hostage of a group with ties to the Taliban, is expected to receive a bail decision on Friday. He was arrested and charged with assault, sexual assault, unlawful confinement and causing someone to take a noxious substance in December.
Karim Baratov, the Canadian hacker who investigators say was involved in the Yahoo security breach, has been sentenced to five years in prison. U.S. investigators say the massive security breach was run by a Russian intelligence agency.
And Lu Shaye, China’s ambassador to Canada, says his country is receiving unfair treatment over concerns about national security. “I hope Canadians can embrace China as simply a different country and not regard China as a threat just because of our differences,” he writes in The Globe.
Help The Globe monitor political ads on Facebook: During an election campaign, you can expect to see a lot of political ads. But Facebook ads, unlike traditional media, can be targeted to specific users and only be seen by certain subsets of users, making the ads almost impossible to track. The Globe and Mail wants to report on how these ads are used, but we need to see the same ads Facebook users are seeing. Here is how you can help.
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