But industry players and analysts caution the $6.8-billion project approved Nov. 29 still has a lot of hurdles to jump before it gets the final green light, reports Don Hauka for Resource Works.
Businesses big and small are applauding the federal government's approval of the Kinder Morgan Trans Mountain Pipeline Expansion Project. But industry players and analysts caution the $6.8-billion project has a ways to go before it gets the final green light.
"Now the hard part begins because there will be significant protests, particularly in the Lower Mainland," said Brian Lee Crowley, Managing Director, Macdonald-Laurier Institute for Public Policy.
"We will soon find out if (Prime Minister Justin) Trudeau and his colleagues have the mettle to see this through."
The announcement was welcome news for Paul de Jong, President of the Progressive Contractors Association of Canada (PCA).
"We're very pleased," said de Jong. "This decision is welcome not just to the group of contractors who support these kinds of projects, but also to Canadians who want to have employment opportunities on these kinds of jobs -- not just during the construction phase but also during the maintenance and operation phases of these kind of projects."
The PCA represents a coalition of companies that employ more than 25,000 skilled construction workers across Canada. Earlier this year, de Jong and the PCA launched the “Let’s Build It” campaign aimed at raising awareness about the importance of getting pipeline projects like Trans Mountain and Line 3 built.
"We're a group of construction firms who say we know how to build things in Canada and we know how to build things safely and respectfully in the communities that we construct it in," he said.
"We respect that there's a political element to project approval, so there's a regulatory component that needs to be recognized and honoured, but those regulatory approvals need to be timely and efficient so that investors in these projects know that there's a clear passage towards a final decision."
De Jong said the decision was "incredibly important" not just to Western Canada, but the country's economy as a whole.
"Canada has some of the richest natural resource reserves and right now we have a problem in that we are restricted in having access to international markets because of a lack of a pipeline infrastructure and having access to tidewater is critical," he said.
"The United States is a key trading partner for us in this area. Having greater access to that market is important as well."
De Jong believes the decision marks the start of a new chapter in Canada's economic growth and sends a positive signal out to the international investment community."
"Canada opening up its opportunities for high-water access and greater American access tells the investor that Canada is more open for business today than it was yesterday," de Jong said.
The project will also have positive economic spin-offs for hard-hit local communities from Alberta to B.C., de Jong said.
"The proponents are aware that when they go through these projects go through different communities there's a recognition that some economic benefit will flow and that there has to be opportunities for local business, for local individuals to have jobs in and around that project, and we believe that's going to be part and parcel of these projects as they go forward," he said.
That's welcome news in the Interior city of Merritt, hard-hit by the recent decision by Tolko Industries to close its Nicola Valley operation effective this December 16.
"It should make up for what we're losing with the Tolko Mill closure," said Grant Klassen, Manager-Partner of Nicola Chainsaw and Equipment Rentals in Merritt. "It's not going to bring us up but it should keep us level."
Klassen, 43, said his company should see more business once construction begins.
"It means more active workers and if they're out there playing on the weekends with our equipment, that's good for us," he said.
That's a sentiment echoed by Kevin Ellefson, Manager of the Knight's Inn in Merritt.
"We're full this winter, but now we're going to absolutely fill up even better," said Ellefson, who recently moved to Merritt from Alberta. "We have 20 rooms and we have a lot of work crews come in."
Ellefson said many other small businesses and operators in the community will get a boost if the project does proceed.
"It's a nice change for the people here who can look forward to some extra business and all that extra money that's going to come flowing into town," he said.
"It's going to benefit a lot of people and it's what this province needs. It's important to Canada and it's important to the energy sector."
Jim Rabbitt, owner of Tibar Construction, says the project will be good for his firm as well as for Merritt in general.
"I think it's very positive," he said. "There will be some spin-off business. We get some trucking business from them occasionally. So we'll benefit whether it's directly or not.
"When construction starts, there will be some spinoffs with crews and accommodations. I think it will be good for Merritt as a whole," Rabbitt said.
Provincially, the government took a cautious approach to the announcement. Environment Minister Mary Polak reiterated that B.C. will still insist the project meet the five conditions for approval it has set out.
"In anticipation of a federal decision, our government has been consistent in fighting for BC with the five conditions for any new or expanded heavy-oil pipeline," Polak said in a statement issued yesterday. "That remains the case today, and we will work to ensure each of our conditions are met."
That line was repeated by Donna Barnett, Minister of State of Rural Development.
“As Minister of State for Rural Economic Development, today's decisions by the federal government will impact rural communities along the proposed pipeline routes," said Barnett. "It's important to remember that B.C.'s five conditions still need to be met as outlined by my colleague Mary Polak."
Former B.C. Premier Dan Miller said the success or failure of the project will depend on the political will to see it get built.
“It’s a big, big country and while there might be some fallout for (Prime Minister Justin) Trudeau politically, I think it will be built,” said Miller, who is a member of the Resource Works advisory council.
“I think that she (Premier Christy Clark) will also support it in the end and did de facto today by reiterating the five conditions.”
Miller said the debate over the pipeline project raises the question of whether Canadians still believe in the foundational deal of Confederation.
“It goes back to Confederation where the deal was you get to ship your goods from east to west or from west to east,” said Miller, 72 and still a card-carrying member of the New Democratic Party. “I don’t think there’s any Canadian Prime Minister who could stand up there and refuse to allow the right of a Canadian resource company to transport their resource that they developed to market. It’s part of the fabric of the country.”
Miller served as Minister of Forests and Minister for Energy and Mines in the NDP administrations that governed the province in the 1990s.
Gary Kroeker said Kinder Morgan has its work cut out for it meeting those conditions because there isn't "any real clarity" of exactly what the government expects.
"The goalposts can move and there's no definite pilings in the ground as it were to say these are the markers that you must meet, period," said Kroeker, formerly an executive with Local 115 of the International Union of Operating Engineers and now retired. He is a Resource Works advisory council member.
"There's no clear delineation of what's expected and I can see the provincial government, with all due respect, not wanting to make too many positive moves towards saying yes to this project until after May and they see what happens in the provincial election."
Having said that, Kroeker sees the announcement as positive.
"I'd put this into the positive news column for anybody that's involved in seeing B.C. prosper and Canada prosper," he said
" I think the typical worker that is in the pipeline industry in British Columbia -- and there's a couple of thousand -- is saying hey, let's move this thing forward, let's get going. And they're no different than the suppliers to the industry because it means jobs and sales of equipment and services all the way down the line that's involved in the building of this project."
But in order to "move this thing forward," the project will have to overcome significant opposition in the Lower Mainland. Kroeker said he hopes B.C. Premier Christy Clark comes to the same conclusions on the project's merits as Prime Minister Trudeau did.
"Trudeau has laid it on the line and said he's prepared to take the political whipping if you want to call it that and I hope Premier Clark sees it the same way," he said.
"If the anti-oil people win the day, then what does the next investor say? 'Oh, gee: maybe investing in a mine or any other natural resource in British Columbia may not sit well because there's going to be a veto by one group or another group that is doesn't make the project economically viable.'"
Oscar Pinto, Director of Business Development, Security and Marine for Valles Steamship Canada Ltd. says at least some of that opposition can be overcome by the industry doing a better job communicating its message to the public, especially around the issue of oil tanker safety.
"I think that the main point in this would be for the industry to put out to the population what due-diligence, what mechanisms are in place to ensure that it's all safe and a minimal impact," said Pinto. "I think there's a gap in the message to the community and that has to be addressed."
Pinto said there is always a risk when shipping commodities from port to port. The smart thing to do, he says, is to manage that risk and minimize it.
"Risk is something that exists in our lives every day and the crucial factor is how you manage the risk and when you manage it professionally and intelligently, it's a win-win situation," he said.
Pinto cited the example of Norway, where government and environmental groups have sat down to develop regulations for shipping to protect it's intricate coastline.
"Norway, whose waters and fjords are equally pristine as our coast, does manage the risk as efficiently if not better," he said.
"The government has partnered with environmental groups to ensure manage this operation so economic needs can be met safely."
De Jong and the PCA know that now Ottawa has given their approval, their association needs to shift its campaign focus to the provincial and local level to continue to build support for the project.
"We need to remain vigilant," de Jong said.
"This is a message that needs to be repeated not only at a national or a federal level but also on a provincial and local level that these projects are good for job opportunities for Canadians but they're also good, frankly, they contribute to the tax base of the local region, the province and the nation. So we'll continue to deliver that message on those different levels and try to make sure that the conversation is directed more towards the opportunities that this project provides rather than some of the negative aspects that some naysayers might state."