On top of the initial C$4.5-billion price tag, it is estimated that the project will cost an additional C$7.4 billion to complete.
Ottawa will pay Kinder Morgan Can$4.5 billion ($3.5 billion) for the Trans Mountain pipeline, which is to move 890,000 barrels of oil a day from landlocked Alberta to the Pacific coast for export overseas, Finance Minister Bill Morneau told a news conference.
The project has been delayed by legal challenges from the province of British Columbia.
Richard Kinley remembers very well when Prime Minister Justin Trudeau came to the monumental deliberations for the 2015 Paris Agreement. He insists there is no contradiction between fighting for the environment and defending Canada's oil industry and the economic benefits it brings.
With that deadline looming, B.C. business leaders flew to Edmonton last Thursday to show their backing for the project, which would nearly triple the flow of diluted bitumen from the Alberta oilsands and increase tanker traffic sevenfold. Because of pipeline bottlenecks and growth in output, the crude oil transported from northern Alberta has been selling at a substantial discount.
We need to get back to that formula, for the sake of Canadians.
In a tweet, Premier Rachel Notley called the announcement "a major step forward for all Canadians".
Green Party of Canada leader Elizabeth May, who is an MP in BC, tweeted that Kinder Morgan was "laughing all the way to the bank" and accused the government of subsidising fossil fuels.
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.
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But many people have jumped to the conclusion that the bulk of the children are at risk; it remains unclear how many, if any, are. We never thought we would separate the parents and the children , but I warned. a different administration could.
By buying the pipeline outright, the Trudeau government has gone all in on this project.
The federal government's purchase of the Trans Mountain pipeline from Kinder Morgan doesn't seem to have changed many opinions about the project. It's an enormous political and financial risk, and how it turns out may well determine whether his government is considered a success.
"This is a bad day for B.C. because John Horgan has chose to kick the feds in the shins", Liberal Leader Andrew Wilkinson said. The fact the pipeline is about to be owned by a federal Crown corporation doesn't affect the reference case, he added.
Crey wasn't completely surprised either by the bailout decision announced by Liberal government Ministers Bill Morneau and Jim Carr. Manufacturing shut down two weeks ago over uncertainty about the pipeline's future, but now workers are optimistic that the federal government will honour the contract. In return, the province would receive an equity or other stake in the pipeline, depending on the size of its investment.
Canada will also offer federal loan guarantees to ensure construction continues through the 2018 season as part of the deal with the company.
While a deal this massive is rare, Ottawa has bailed out companies before.
There is a long history of state involvement in large Canadian business enterprises.
"It doesn't matter if it's the Canadian government or profit-making organization, we can directly, physically stop it".
Ottawa has the constitutional authority to build interprovincial projects like pipelines, but 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.