Priming the pump of bad incentives in Canada
The decision to nationalize the Trans Mountain pipeline is not a victory, it’s a failure.
Back in April, Kinder Morgan announced it was halting all “non-essential” operations on its Trans Mountain expansion pipeline project pending an establishment of certainty that the project would continue despite entrenched opposition by the British Columbia government.
In a news release on April 8, Kinder Morgan CEO Steve Kean said, “If we cannot reach an agreement by May 31, it is difficult to conceive of any scenario in which we would proceed with the project.”
On Tuesday, just two days before Kinder Morgan’s drop-dead date for certainty, Finance Minister Bill Morneau announced that the federal government will buy the project outright for $4.5 billion. The government plans to manage the construction of the pipeline through a Crown corporation, with an expectation of selling it or otherwise transferring ownership of the pipeline to the private sector in the future.