Construction set to re-start on Trans Mountain Pipeline
August 26, 2019
Last week, the Trans Mountain Pipeline Expansion (TMX) project re-started the construction process. Contractors received their ‘Notice to Proceed’ directives, marking the start of a 30-day mobilization period for equipment and hiring that culminates with the development of detailed construction work plans along the corridor. To get to this point, the project had to clear multiple hurdles along the way.
This frequently discussed project has taken on broader significance as a symbol of Canada’s inability to build major infrastructure projects. To date, project delays have highlighted issues including interprovincial disagreements and trade barriers in Canada, government intervention in the private sector, and uncertainty in Canada’s regulatory processes.
Despite the approval and the purchase of the project in May 2018 by the Government of Canada, aspects of the recommendations report around the applications of the Canadian Environmental Assessment Act and the Species at Risk Act to project-related marine shipping was referred back to the National Energy Board for reconsideration in September. The reconsideration, again, increased the time required to receive approval, increasing uncertainty around project approvals in Canada. The February 2019 report from NEB then came forward with 156 conditions on the project for the proponent, instead of the original 157. The report also introduced 16 new non-binding recommendations for the federal government on matters falling outside the NEB’s regulatory mandate but within the federal government’s jurisdiction. Further, increasing the complexity of the federal project approval process.
This decision started the clock on the 90-day deadline for cabinet’s decision on whether the project should proceed or not. However, on April 18, the Minister of Natural Resources extended this deadline to June 18, 2019 in order to complete Phase III Crown consultations. Although it added to the overall timeline, it was important that the federal government ensured they take took necessary steps to fully consult with impacted Indigenous communities. Following these consultations, the project received the green light from government for the second time.
Uncertainty in getting projects built has had negative effects on jobs and investments across Canada. The sentiment around these uncertainties showed up again as recently as last week. Pembina Pipeline Corp. announced on August 21, 2019 that it would purchase Kinder Morgan Canada Ltd., the owner of TMX prior to the federal government. Despite the benefits of owning the pipeline, Mick Dilger, Pembina Pipeline CEO, was non-committal in placing a bid to purchase the pipeline from the federal government due to the ‘noise’ around the project.
Getting TMX built will be a step in the right direction in terms of demonstrating that Canada offers a business forward regulatory environment. It will also allow our natural resources to reach global markets, and once built, would help alleviate some of the takeaway constraints that producers are currently facing. Reducing regulatory uncertainties and providing certainty around review timelines must be a priority for the federal government going forward if we wish to retain and attract investments in our country.
For a summary of the Chamber’s work and timeline of the project leading up to the reconsideration request click here.