The deal was approved by cabinet on Tuesday morning and is now subject to approval by Kinder Morgan stockholders.
Finance Minister Bill Morneau unveiled the government's long-awaited, big-budget strategy on Tuesday to save the plan to expand the oilsands pipeline.
The only studies that say the Trans Mountain pipeline will make money for the Canadian economy are reports paid for by Kinder Morgan.
The Canadian government said that it does not intend to "be a long term owner of this project", noting it plans to work with investors to transfer the project to a new owner. The purchase includes the pipeline, pumping stations, and rights of way along the route. Minister of Natural Resources Jim Carr said that the political polarization over the pipeline's construction was atypical for Canada, and he suggested that the federal government's intervention would restore stability and certainty.
While the $3.5 billion Trans Mountain takeover keeps alive a project seen as critical to expanding markets for Canada's crude and improving the price oil-sands producers get paid, it also reveals how key infrastructure projects can be stymied by local opposition and regulatory hurdles.
Kinder Morgan has agreed to help the Canadian government look for another potential buyer until July 22.
After the government's announcement, the NDP indicated that its position remains the same.
"This is a declaration of war against indigenous people because they're not recognizing our own sovereignty", says Kanahus Manuel, a Secwepemc midwife and mother of four. It spoke to the transportation of diluted bitumen through British Columbia by rail or by pipe.
For those who have soft support for the pipeline but are unimpressed with how Trudeau and Alberta premier Rachel Notley have thrown their weight around to bully B.C. into submission, Horgan appears as a resolute premier standing up for B.C. against the selfish outsiders from Edmonton and Ottawa. The province said it had pledged up to $2 billion for the project if needed, but said it may not need to use any of those funds. "Now that the federal government is the owner of the pipeline, effectively, they can just legislate it past any of these court issues".
The Houston-based company had stopped all non-essential spending on the project last month after facing broad opposition from environmental groups, indigenous communities, and the province of British Columbia.
Given the iron law of megaprojects (overbudget and over schedule over and over again), Allan expects the final construction bill to be more than $9 billion.
Environmental activists and their allies among indigenous groups say the development will increase the risk of oil spills from the pipeline and from oil tankers along British Columbia's coastline.
Because instead of having the private sector do it, Canadian taxpayers are now the owners of the Trans Mountain, for an initial outlay of $4.5 billion, with the final cost likely to be around $7.5 billion. For several years a company called Kinder Morgan has been trying to build a new Trans Mountain Pipeline that would follow the path of the existing pipeline and allow much higher volumes of oil to flow west. While we are going to save the vital pipeline and the thousands of jobs that come with it, today's decision highlights how much damage has been done to our global reputation. And the Opposition Conservatives were livid at the prospect of nationalizing a private-sector asset.