Trudeau welcomes Trump's Keystone XL decision
U.S. president approves $8B pipeline project but says it's still subject to 'renegotiation of terms by us'
Prime Minister Justin Trudeau is strongly in favour of Donald Trump's decision to green-light the Keystone XL pipeline project, a move he says will be a boon for Canadian jobs and government coffers, and help a hobbled Alberta recover from the steep decline in oil prices.
Trudeau said he has spoken to the new U.S. president twice, and on both occasions he pressed upon him Canada's steadfast support for the $8-billion project, which could carry more than 800,000 barrels of Alberta oil a day to refineries in Texas.
"I reiterated my support for the project. I've been on the record for many years supporting [Keystone XL] because it leads to economic growth and good jobs for Albertans," he told reporters assembled in Calgary for the federal cabinet retreat.
"We know we can get our resources to market more safely and responsibly while meeting our climate change goals," he said, adding Premier Rachel Notley's hard cap on oilsands emissions will ensure Canada meets its reduction targets.
Trump issued a presidential memorandum Tuesday, which will allow the proponent, TransCanada, the chance to reapply for a presidential permit for cross-border construction.
However, Trump said the pipeline would still be subject to a "renegotiation of terms by us."
"We are going to renegotiate some of the terms and, if they'd like, we'll see if we can get that pipeline built. A lot of jobs, 28,000 jobs. Great construction jobs," he said, but did not specify what more he would like to extract from the proponent before construction can proceed.
Trump has said he will push a "Buy American" agenda and will demand pipeline companies source steel used during construction from American manufacturers.
Trudeau said those negotiations are out of the federal government's hands, and are the responsibility of TransCanada.
The government had expected Trump to approve the pipeline project early in his term, but sources told CBC News they were not given advance notice by the president's team that the decision would come today.
'I misspoke'
Trudeau also sought to clarify remarks he made at town hall in Peterborough, Ont., last week when he suggested the oilsands will be phased out, much to the chagrin of people who depend on the industry for their livelihood.
"I misspoke. I said something the way I shouldn't have said it," Trudeau said, when pressed by a local Calgary reporter.
"We know our transition off of fossil fuels is going to take a long time. My responsibility now ... is making sure Canadians have good jobs, making sure communities are prospering ... and doing it in a way that understands our responsibility to the environment and future generations."
The prime minister said even if the transportation and energy sectors lessen dependence on fossil fuels, there will still be a demand for oil-based products years into the future.
He said while opponents in the Conservative Party made "political hay" out of his comments, their former party leader also agreed, with other G7 leaders, to complete "decarbonization" by 2100.
'Very good moment'
The Liberal cabinet presented a united front Tuesday, heralding Trump's decision as proof the two, ideologically incompatible governments can work together for the benefit of workers on either side of the border.
"My reaction is that it would be very positive for Canada — 4,500 construction jobs and a deepening of the relationship across the border on the energy file," Natural Resources Minister Jim Carr told reporters, referring to the number of temporary direct and indirect jobs that will be created in Canada.
"This is a very good moment for Alberta."
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"I'm now a Toronto MP but I'm an Albertan," Canada's Foreign Affairs Minister Chrystia Freeland said of the president's memorandum. "As an Albertan, it's a great decision for Canada and Alberta. The province needs jobs."
But Trump's decision was not universally lauded, with outgoing NDP Leader Tom Mulcair calling the project a "massive error" for Canada.
"It's not clear why Justin Trudeau is pushing to revive a pipeline that will export Canadian jobs and has never been properly reviewed," Mulcair said. The pipeline will principally move diluted bitumen, and the NDP has said that the heavy crude should instead be refined in Canada.
Thorn in the side
The project has been a thorn in the side of the Canada-U.S. relationship, and former prime minister Stephen Harper was openly critical of the former Democratic president for delaying construction. Harper predicted the pipeline would be built "with or without Obama," a forecast that was borne out Tuesday.
Calgary's Mayor Naheed Nenshi, who met with the prime minister and his cabinet to discuss the ailing Alberta economy, said he was happy to hear of Trump's approval.
"I fundamentally believe the decision to deny that pipeline was one the biggest domestic policy errors of the previous administration," he said. "It is important for Canadian energy to have access to global markets; it's important for the prosperity of our nation for that to happen."
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If built, the project will be a shot in the arm for Alberta's oilpatch, as the project will carry 830,000 barrels of oil per day into the United States when fully operational. The industry has long said it needs more pipeline capacity to carry its product to market.
Supply from Western Canada will grow to 5.5 million barrels of oil a day by 2030, the Canadian Association of Petroleum Producers has forecasted, while current pipelines can only carry four million barrels.
The Liberal government signed off on Kinder Morgan's Trans Mountain pipeline and Enbridge's Line 3 last November, which, combined, will add capacity to transport 1.3 million more barrels of oil a day.
All told, Canada's oil and gas producers could be flush with pipeline space if all of these projects are constructed, which could spell bad news for another much-delayed TransCanada project, Energy East.
"This is a decision that TransCanada will have to make ... and the proponent's own sense of where the markets are," Carr said. "The job of the government of Canada is to make sure that the regulatory system is credible, and that's why we made fresh appointments to the National Energy Board."
Keystone XL has Canadian approvals
Carr said Tuesday Keystone XL has secured all of its approvals north of the border, and the project will not be subject to the secondary environmental review process the government initiated last January for Trans Mountain and Energy East.
The National Energy Board and the former Harper government approved the project in 2010 but construction has been stalled as the proponent awaited approvals from the president, and states along the route.
TransCanada still has to secure route approval from Nebraska, as it previously withdrew its application for a state permit after Obama rejected the pipeline.
The massive 1,900-kilometre pipeline will connect to TransCanada's existing Keystone pipeline system, and will carry oil from Hardisty, Alta., south of the border to refineries near Houston.
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