Liberals whistling past Canada's infrastructure initiative graveyard

It has been evident in recent weeks and months that the federal government is in a weak position - even though it might proceed - to grant the go-ahead to widen the Trans Mountain pipeline.

The Justin Trudeau government has been talking of the imminent decision in the days ahead on whether to resume the twinning of its pipeline - yes, remember, it owns the pipeline - from Alberta across British Columbia and into tidewater to foreign markets.

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This decision is acutely important politically as it moves toward an election, in ways symbolic and actual. While parts of British Columbia oppose the project, particularly in the Lower Mainland, the larger failings of deferred construction are not only losses of jobs and other benefits but also a larger doubt among international investors that Canada is an infrastructure initiative graveyard.

The pipeline is a litmus test across a range of frontiers for Trudeau and his government. Even if they can deflect the blame, an inability to resume construction as the nation heads to an election would at the very least be an embarrassment.

There remains in B.C. an exceptionally strong list of impediments, and any move toward construction risks a very severe backlash.

Significant among the challenges is the Federal Court of Appeal ruling last year that noted the need for a much stronger duty to consult with First Nations. Work on this has, according to sources, gone much slower than is necessary to appropriately relaunch construction this summer.

One Indigenous lawyer told me that his client's band is only at an early stage of deep consultation - and that this latest round rewound the clock and didn't pick up where it left off, by the way. If there is any hope to surpass a court challenge, more time and talk seem necessary as part of the process.

Two sources indicate that the expanded nature of the project's marine review has identified a new endangered species: steelhead, whose stock is in decline and whose once hereditary fishery would be threatened by a spill.

Another Indigenous representative noted that the federal government has not stepped forward with substantial new economic options to bring wavering bands into the project economically, like Impact Benefits Agreements or equity positions - millions of dollars, instead of tens of millions of dollars, appear to be the gap. There are bands that will never support the pipeline, like Tsleil-Waututh Nation, but there has been precious little enrichment of the benefits for other bands to come aboard.

On the basis of last week, the Trudeau government's decision on Trans Mountain will come at a watershed moment. The release of the disturbing Murdered and Missing Women and Girls final report concluded Canada had committed "genocide" through "state actions and inactions rooted in colonialism and colonial ideologies."

In pledging measures to deal with an array of institutional issues identified in the long-awaited report, and in telling the world it can learn from what Canada has lately done and plans to do in its relationship with Indigenous peoples, Trudeau has increased the political ante in such a way as to have no margin of error in how his dealings can ensue.

Thus, unless the next few days are remarkably efficient, any procession with construction of the pipeline without a more formidable support base of First Nations would create a clear problem for the prime minister.

As for the disposition of the $4.5 billion project, it has been widely reported that Indigenous groups are aiming to buy majority control of the pipeline. But two banking sources indicate that conventional financing will be difficult to obtain in any uncertain environment. While financial institutions believe in the viability of the project, none will lend when there is any legal uncertainty. Nor is there sufficient funds among the Indigenous groups that wish to own. That might require the federal government to somehow backstop any deal.

By the time this column appears in print, these issues might be addressed. But at the end of this week, sources were of the view there would be a deferral.

Kirk LaPointe is editor-in-chief of Business in Vancouver and vice-president, editorial, at Glacier Media.

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