Canada approves Trans Mountain pipeline expansion for second time

The Canadian government has approved the Trans Mountain expansion project for a second time, promising to invest "every dollar" it earns into "Canada's clean energy transition."

Prime Minister Justin Trudeau made the announcement at 4:30 p.m. in Ottawa flanked by several members of his cabinet. He said the government was moving ahead with the pipeline expansion to create jobs, open markets and generate new Indigenous economic prosperity.

The approval is subject to more than 150 conditions that must be met by the proponent, Trans Mountain, a subsidiary of Canada Development and Investment Corporation (CDEV), the Crown corporation that currently owns the pipeline and expansion project.

"Today, I'm announcing that our government has approved the Trans Mountain expansion project going forward," Trudeau said. "The company plans to have shovels in the ground this construction season."

Trudeau said the government has been "listening carefully to Canadians, and hearing about their desire for a cleaner future." That's why, he added, "every dollar the federal government earns from this project will be invested in Canada's clean energy transition."

The prime minister also announced that the government would be "launching a new phase of engagement," seeking input from Indigenous groups "on ways that they could directly share in the benefits of this project."

"When it comes to potential Indigenous buy-in, we're not putting a limit on it. Indigenous ownership in Trans Mountain Corporation could be 25 per cent, 50 per cent, or even 100 per cent," said Trudeau.

The government also released a detailed report outlining its efforts to accommodate affected First Nations, as well as outlining new conditions on top of the 156 conditions that were recommended by the National Energy Board.

Scheer rejects pipeline approval as 'meaningless'

If completed, the Trans Mountain pipeline expansion project would triple the capacity of an existing pipeline system, allowing it to transport up to 890,000 barrels per day of bitumen and other petroleum products from Alberta's oilpatch, to a marine terminal in Burnaby, B.C. This would effectively require construction of a new pipeline along a slightly modified route.

Supporters of the project have said it is key to boosting economic growth while providing the government with revenues that it needs to pursue a transition to a low-carbon economy. Opponents say that the project is too risky since it could lead to spills and will threaten endangered species, while pushing Canada's international climate change goals out of reach.

Canada previously approved the Trans Mountain expansion project in 2016. This approval was later overturned by a court decision, which found that the federal environmental review was flawed and that the Trudeau government had failed to adequately consult First Nations affected by the project, as required under the Constitution.

The government was accused of rigging that review process, to ensure that the project would be approved, regardless of the environmental impacts and concerns of affected First Nations, National Observer reported in April 2018.

The Conservative Opposition said Trudeau's approval was "meaningless." Conservative Leader Andrew Scheer accused the Liberals of having "absolutely no plan for construction."

“Today’s cabinet decision gets us no closer to having this vital, job-creating protect than we were when it was first approved two and a half years ago," said Scheer.

In a statement made prior to the federal government's announcement, Alberta Premier Jason Kenney said there should be multiple pipelines built and approved. "This has never been just about 'one' pipeline," Kenney wrote on Twitter.

"True market access means pipelines in every direction to get Canadians the best prices for our resources."

Following the announcement, Kenney said Alberta "appreciates" the second approval, but added "approval is not construction. So now let’s get it built!"

Officials expect new cost estimate for project

Many Canadian oil and gas companies have been slumping since 2014, when global commodity prices crashed. Canada is home to the world's third-largest reserves of crude oil, after Saudi Arabia and Venezuela, most of the supply being in northern Alberta's oilsands.

But companies must use large amounts of energy and water to separate the heavy tar-like oil from clay and sand beneath the boreal forest.

For this reason, the oil is costly to extract and refine. The industry has been pushing for new pipelines, saying they would make shipping for export cheaper and less risky than other methods like rail and tanker trucks.

The absence of pipeline capacity also led the Alberta government to force companies to cut production, a few months ago, to prevent what it expected would cause bankruptcies and job losses at companies that were struggling to break even.

While the industry's woes have affected employment rates in Alberta, the five largest Canadian oil companies ⁠— Suncor Energy, Canadian Natural Resources Limited, Cenovus, Imperial Oil and Husky ⁠— continue to generate healthy profits, according to a recent 2018 report by the Parkland Institute, a think tank at the University of Alberta, in partnership with the Corporate Mapping Project at the University of Victoria and the Canadian Centre for Policy Alternatives.

These five companies employed 35,788 workers in 2017, and they control about 80 per cent of Canada's production of bitumen, from the oilsands, according to the report. The five companies also had an average profit margin of 13.5 per cent, adding up to combined profits of $47 billion for all of them in 2017, the institute said.

The pipeline expansion means Trans Mountain will need new permits, authorizations and other approvals under various statutes, such as the Fisheries Act, the Species at Risk Act, and the Indian Act. Government officials indicated Tuesday that they expected CDEV to release a new cost estimate for the project after it takes stock of this new regulatory process.

Costs have already escalated for the project. Originally pinned at $4.1 billion in November 2016, the estimate rose to $7.4 billion. Documents in August 2018 showed the cost as high as $9.3 billion through completion of construction.

Squamish Nation expresses 'deep frustration'

Reacting to the announcement, Squamish Nation expressed "deep frustration" with what they said was a "lack of commitment to reconciliation and Indigenous rights" in the government's decision to approve the project a second time.

The pipeline expansion would travel through ​​​​​​Squamish Nation territory in Burrard Inlet and English Bay in the Vancouver area.

"The Squamish Nation met with federal officials as they conducted their court-ordered Phase III consultations with First Nations. What we experienced was a shallow attempt at consultation that resulted in a failure to address our concerns," reads a statement from spokesperson Khelsilem.

"The failure to meaningfully engage with rights holders means this government is either not serious about building this pipeline or not serious about respecting Indigenous rights."

It was a similar message to what Coldwater Indian Band Chief Lee Spahan told CBC News this week: that the Canadian representatives sent to negotiate over the route had "no authority" to answer questions.

Coldwater has been concerned about the risks the pipeline could pose to its drinking water, as well as the Thompson River population of steelhead trout, which spawn in the Coldwater River.

The river runs along the proposed path of the pipeline expansion. The route crosses the river multiple times, and also crosses other rivers where steelhead trout live.

"They said that they would come back and try to have answers for us, and yet in three meetings our questions went unanswered,” Spahan told CBC.

Tsleil-Waututh 'prepared to use all legal tools'

Meanwhile Tsleil-Waututh Nation said several concerns remained unaddressed and the process "again did not result in meaningful consultation."

“Right now Prime Minister Trudeau is approving a project that is a violation of our stewardship rights and our law,” said Chief George-Wilson in a statement.

“Tsleil-Waututh Nation does not consent to this project as it is currently proposed. We do not want to find ourselves back in the same position we were in, in 2017. However, given what is at stake, Tsleil-Waututh is prepared to use all legal tools necessary to ensure that our rights are protected for our future generations.”

In his remarks to reporters, Trudeau acknowledged concerns over potential oil spills and threats to marine life. Asked about legal repercussions about a second approval, he said he accepted that he wouldn't see eye-to-eye with everyone.

“There are people out there for whom no amount of accommodations or conditions or changes to the plan" would have made an approval acceptable, he said. "Those people will not be convinced. ... We accept that."

Former federal justice minister Jody Wilson-Raybould, who defended the Trans Mountain expansion approval while in Trudeau’s cabinet, had also questioned earlier whether the project makes economic sense.

“Apart from what may or may not happen if TMX is approved, for me, and others, it is still an open question whether there is a compelling economic case for the expansion project,” she wrote in a blog post on June 17.

“At the end of the day the economic viability of the project is ultimately tied to the question of how long the transition from fossil fuels to other energy sources will take place globally and until then, where countries will source their oil.”

Editor's note: This story was updated at 6:15 p.m. ET on June 18, 2019 to include additional comments from Trudeau and Kenney as well as reaction from Scheer, and the Squamish and Tsleil-Waututh Nations.