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RISDON: Expansion critics – Ottawa has chosen West Coast over East Coast

The Energy East project is on hold. What will that mean for Atlantic Canada
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Ottawa is playing favourites by investing billions of dollars into the Trans Mountain pipeline in Western Canada even though it did nothing to help the now-defunct Energy East project here, says Saint John Mayor Don Darling. 

“We’re the poor cousins from the East,” said Mayor Darling in an interview Tuesday. “The federal government wants this Trans Mountain project to go ahead at all costs — even to the point of investing in it — and we couldn’t even get regulatory approvals.”

Tuesday, Kinder Morgan Canada announced a deal in the works to sell its Trans Mountain pipeline and expansion project to the Government of Canada for $4.5 billion. That doesn’t include money that will have to be spent for the proposed twining of that pipeline. 

The deal is expected to close by mid-November. 

Kinder Morgan chief executive officer Steve Kean is happy with the deal, saying it benefits Canadians, Trans Mountain expansion project shippers and this company's shareholders. Finance Minister Bill Morneau told reporters Tuesday the investment is in Canada’s national interest.

But Atlantic Canadian proponents of the Energy East pipeline say the same reasoning used to justify Ottawa’s investment in the Trans Mountain pipeline also applies to Energy East.

That $15.7-billion, proposed TransCanada pipeline project died in October last year. It would have delivered oil to New Brunswick from Saskatchewan and Alberta to be refined at the Irving Oil operation in Saint John. Irving Oil officials were unavailable for comment Tuesday.

Energy East would have been a job-creation bonanza, expected to create almost 3,720 jobs during the construction phase and 97 permanent jobs once the pipeline was built.

In October, a disheartened Mayor Darling described the loss of Energy East as “a devastating blow” for Saint John.

Yesterday, he charged that the federal government has created “an unfair and unlevel playing field” for energy projects in Canada.

Despite his disappointment, the mayor is hoping Ottawa’s investment in Trans Mountain signals a change of heart for the Liberal government. Tuesday, Prime Minister Justin Trudeau reassured reporters the Trans Mountain pipeline project will go ahead. 

Mayor Darling wants Ottawa to apply that same vigour and commitment to reviving the pipeline that would bring Alberta oil to New Brunswick.

“I’m hoping the federal government has had a change of heart (with regards to the need for oil pipelines in Canada),” he said. “I’m calling on them to engage with the proponents of the Energy East pipeline.”

Kinder Morgan Canada, whose stock trades on the Toronto Stock Exchange under the KML ticker, saw its share price spike to $18 Tuesday morning after being halted ahead of the announcement of Canada’s offer to buy the Trans Mountain pipeline and expansion project. 

Although investors clearly felt something needed to be done since Kinder Morgan was threatening to pull out of the project, Ottawa’s move to nationalize these assets left the markets with misgivings. By the closing bell, Kinder Morgan stock was back down to $16.10.

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