In November 2018, Prime Minister Justin Trudeau went to Calgary to speak to the chamber of commerce. A crowd gathered outside the venue and chanted, “Build that pipe.”
Trudeau might have responded that he was trying to do just that — at least in regards to one pipeline. Trudeau’s government had actually purchased the Trans Mountain pipeline six months earlier, with the stated purpose of ensuring its expansion could be completed.
Five and a half years later, Finance Minister Chrystia Freeland used her budget speech to celebrate the fact that the Trans Mountain expansion is nearing completion — an achievement she held out as evidence of what an “activist” federal government can accomplish.
Rising to respond a few minutes later, Conservative Leader Pierre Poilievre begged to differ. The lesson, he said, was the opposite — if the government had just gotten out of the way, a private company would have built the pipeline.
The pipeline is almost complete. The debate, obviously, is far from over.
Freeland’s framing is a stretch. The federal government didn’t set out to buy a pipeline — it was just willing to do so when that seemed to be the last remaining option.
But when Poilievre says the government should have gotten out of the way, he’s aiming at the wrong government. It was the efforts — however futile — of British Columbia’s provincial government to stymie the project that led to Kinder Morgan’s decision to walk away.
And though it was suggested at the time that the federal government should have somehow compelled or cajoled the NDP government in B.C. to get out of the way, it’s worth remembering that the New Democrats were dependent on a confidence-and-supply agreement with Green MLAs that committed the provincial government to using “every tool available” to block the project.
Ultimately, it was federal ownership that rendered all such tools moot.
Why an ‘anti-oil’ prime minister built a pipeline
On the day oil begins to flow through the new pipeline, it will finally answer the doubts raised by Poilievre’s predecessor in 2019 when the Trudeau government gave the project its final approval.
“I don’t believe he actually wants it built,” Andrew Scheer said of the prime minister.
It takes some imagination to believe Trudeau would agree to purchase a pipeline for $4.5 billion in public funds — inviting no end of criticism from progressive rivals and environmentalists — without intending to see the expansion completed.
But you can easily understand the cognitive dissonance some were experiencing at the time. This was, after all, the prime minister described by Conservatives as the most “anti-oil” leader in Canadian history.
(Nine years into Trudeau’s time as prime minister, Canada’s oil production is at record highs.)
To fully understand how the Trudeau government ended up buying a pipeline, it might be necessary to review decades of inaction by countless governments against the threat of climate change and their slight efforts to reconcile meaningfully with Indigenous peoples. By the time Trudeau came to office, pipelines had taken on a symbolic value well beyond the practical.
But when Trudeau went to Calgary’s Petroleum Club in 2013, he embraced two clear positions. A price on carbon emissions needed to be part of a plan to responsibly develop Canada’s resources, he said, but getting Canadian resources to new markets was in the national interest and something for which the federal government should be held responsible.
(He also said that while governments can issue permits, “only communities can grant permission” — a simplistic slogan that did not survive contact with the reality Trudeau faced in 2018.)
There was a straightforward economic argument for building a new pipeline. If more Canadian oil could get to “tidewater,” Canadian producers would be less dependent on the American market and would be able to charge a higher price. And by 2019 — after the government had let Northern Gateway die and Energy East had been abandoned — the Trans Mountain expansion was the only pipeline proposal left standing.
But there may also have been a question of national unity. Albertans and their government might not be big fans of the federal government right now. It’s fair to ask how much more negative the political climate might be if all efforts to build a pipeline out of the province had been thwarted.
The federal government might not recoup all of its investment when it eventually sells the newly expanded pipeline, but it’s hard to put a price on holding a country together.
Politically, the purchase of the pipeline obviously didn’t lead to great Liberal gains in Alberta. It also didn’t save Rachel Notley’s NDP government. And it may have hurt the Liberal Party with progressive voters in other provinces. But the purchase didn’t lead to the sort of electoral wipeout in B.C. that Liberals might have feared at the time.
The pipeline’s nearly done. Now what?
As Freeland noted in her budget speech, the Bank of Canada now expects that the start of operations for the expansion will have a measurable impact on Canada’s national GDP. The Liberal government has estimated the project will generate $500 million in corporate tax revenues. (The government has pledged that all profits will be directed toward clean energy.)
At the same time, the Liberals surely will be criticized if the pipeline is sold at a loss. And they risk taking the heat for any spills or accidents that follow in the years ahead.
While his critics insisted that “climate leaders don’t build pipelines” — another simplistic slogan — Trudeau positioned the project within the larger cause of transitioning to a clean economy.
“To those who want sustainable energy and a cleaner environment, know that I want that too. But in order to bridge the gap between where we are and where we’re going, we need money to pay for it,” he said in 2019. “It is in Canada’s national interest to protect our environment and invest in tomorrow while making sure that people can feed their families today.”
A prominent Alberta-based environmentalist said oil executives told him building the pipeline would better position them financially to make emissions-reducing investments.
In 2021 — the most recent year for which official data is available — Canada’s oil and gas sector accounted for 189 megatonnes of greenhouse gas emissions, 28 per cent of the national total. The sector’s emissions are expected to have risen in 2022. And if, a decade from now, the sector’s emissions continue to rise and Canada has missed its emissions targets, Trans Mountain might be framed, fairly or not, as part of a larger failure.
But since buying Trans Mountain, the Trudeau government has proposed new rules to reduce methane emissions for the industry and a cap on total emissions from the sector. The Liberals have also pledged billions of dollars toward subsidizing the development and use of carbon capture technology.
If nothing else, the flow of oil through the newly expanded pipeline might only strengthen the case for getting on with the work of reducing the oil industry’s emissions.