Jun 12, 2024

Canada’s federal government is looking to sell a 30 per cent stake in the newly expanded Trans Mountain pipeline system to Indigenous owners, Alberta’s premier said. 

Most debt on the government-owned oil pipeline system can be financed through tolls charged to companies that ship on the line, Premier Danielle Smith said at a press conference in Calgary. The equity the government will need to raise to get the system into private hands was $10 billion (US$7.3 billion) as of “a few months ago,” she said.

“They wanted to get the indigenous partners to own 30 per cent,” with the government possibly offering a loan guarantee to First Nations, she said. “It’s going to be a great source of income for the Indigenous partners.”  

The government sent a letter to First Nations groups last year proposing a special-purpose vehicle that would hold a stake in the pipeline, and individual groups would be able to choose whether to opt in. For those that want a piece of the action, the government intends to provide risk-free access to capital, the letter said, without providing details such as how big of a stake it would sell.

The sales process has since stalled, with Indigenous leaders earlier this year complaining of no further contact from the federal government.

The Trans Mountain system began operation in May, nearly tripling the capacity of Alberta oil producers to export crude off the Pacific Coast. The government — which bought the pipeline in 2018 to save it from cancellation amid fierce opposition in British Columbia — has pledged to sell the line and provide a stake in it to First Nations. But cost overruns that have quadrupled the project’s price tag to $34 billion have posed a challenge to the Trudeau government’s plans.