Cost of Kinder Morgan taxpayer buy-out is staggering
The needless nationalization of a privately-owned oil pipeline in Canada is a tale for the political ages.
The federal government lead by Prime Minister Justin Trudeau has managed to snatch defeat from the jaws of victory and taxpayers are getting mauled in the melee.
Instead of getting a massive injection of private money, Canadian taxpayers are now paying out $4.5 billion for the existing pipeline, plus at least $7 billion to build the expansion.
Without even dwelling on the arguments for and against the pipeline, it’s important to know what that money could have been used for instead.
If we factor in the cost of building the expansion, which the company Kinder Morgan pegged at $7 billion and change, that would raise the bare minimum cost of the nationalized project to $12 billion.
For $12 billion we could build clean drinking water systems and waste treatment plants for every First Nation in Canada nearly four times over, or we could have rebuilt all of For McMurray after the devastating forest fire and still had billions left to spare. Twelve billion dollars would cover the entire operating budget for the province of Nova Scotia, or it would cover the cost of groceries for an entire year for more than a million Canadian families. And for $12 billion we could build 62 top notch recreation centres complete with swimming pools, theatres, libraries and indoor running tracks across Canada.
Blowing $12 billion on a privately owned and federally approved pipeline was staggeringly unnecessary.
To be clear, up until now, a private international energy company had spent the last five years going through multiple hearings and it had received the green light to expand their existing pipeline.
The company had played by all the rules, and it was begging money into the hands of Canadians to be able to expand their energy operations, providing tens of thousands of good paying jobs in the process.
Asserting federal jurisdiction would have taken Trudeau’s team a day’s worth of work on Parliament Hill. They could have declared paramountcy and upheld the rule of law by vowing to maintain peace, order and good government, while telling the company to proceed with the project that his government had approved. He could have reminded B.C. Premier John Horgan who was the elected captain of Team Canada. Done and done.
Instead, he did nothing.
Truckers, pipefitters, welders, crane operators, steelworkers and oil sands labourers were all counting on this approved pipeline, along with thousands of other workers who support and supply the industry. They were going to work for years from Edmonton to Burnaby. More than 500,000 construction trades workers had signed on to support the project along with more than 40 First Nations who live on the current pipeline route.
This financial failure, this blowing of $12 billion, did not need to happen. We had a well-monied company that was more than willing to invest their own cash in this country, providing jobs to thousands of Canadian workers who are “in the middle class and those working hard to join it.”
Instead, Canadians are going to have to work very hard to pay off the cost of this pipeline and hope doubly that it is finally expanded and then sold at not too large of a loss to taxpayers.
By Kris Sims, BC Director, Canadian Taxpayers Federation