The federal government announced on Sunday that it would provide a financial guarantee to ensure the risky Kinder Morgan tar sands pipeline gets built. The pipeline is estimated to cost $7.5 billion, meaning Canadians could be on the hook for a giant fossil fuel subsidy.

Tell the federal government to stop giving public money to oil, gas and pipeline companies!

Providing government financial support for a dangerous, deeply unpopular, high-carbon project proposed by a Texas-based pipeline company is a horrible idea. It would contradict the federal government’s commitments to climate action, Indigenous rights, and restoring public trust in the energy project review process. And it would leave Canadians on the hook for a piece of fossil fuel infrastructure whose economics are highly questionable.

Kinder Morgan is a bad project

If built, Kinder Morgan’s proposed Trans Mountain Expansion pipeline would triple the volume of tar sands crude flowing from Alberta to the Pacific Coast. It would increase the number of oil tankers plying Vancouver’s busy inner harbour by nearly seven times, jeopardize $9.7 billion in GDP and 98,000 jobs supported by the B.C. coastline from an oil spill, and put the endangered southern resident orca whale population at risk of extinction.

Kinder Morgan was approved using a deeply flawed National Energy Board review process. The approval is now the subject of at least 13 legal challenges. It would lead to an increase in carbon pollution from the tar sands by up to 15 megatonnes per year, making Canada’s climate targets nearly impossible to meet. The pipeline is adamantly opposed by dozens of First Nations, meaning its construction would be a blatant contradiction of Canada’s commitment to Indigenous rights.

In short, Kinder Morgan is a bad project. The regulatory, financial, legal and political obstacles to its completion make it an extremely risky investment.

Kinder Morgan knows this. That’s why it’s asking for a government bailout before the project is even built.

The company has already sunk $1.1 billion into this beleaguered pipeline. Its investors and shareholders know there’s a large and growing risk that they will never see a return on their investment. That’s why Kinder Morgan has manipulated the federal government into accepting an ultimatum: remove risks to the project’s completion or we’ll cancel the project.

Sadly, the Alberta government and the federal government are playing ball. The Alberta government has floated the idea of buying the $7.5 billion pipeline outright to keep it afloat. The federal government is making vague references to providing “financial assurance” to Kinder Morgan to “de-risk” the project.

But whether it’s buying an equity stake in the pipeline, providing loan guarantees, or covering financial risk for Kinder Morgan, it would be a big juicy bailout of a foreign pipeline company. While the federal government is negotiating with Kinder Morgan in secret, analysts say Canadian governments may kick in as much as $3.6 billion to complete the project. A former pipeline company executive recently suggested that the only way Kinder Morgan could proceed is if the federal government offers $10 billion in protections against financial loss for the pipeline. This would be in addition to the billions of dollars in subsidies already handed out to oil and gas companies by the federal government.

Bailing out Kinder Morgan flies in the face of the federal government’s commitments to climate action, Indigenous rights, and restoring public trust in the energy project review process. It also contradicts the longstanding federal commitment to phase out fossil fuel subsidies. And it raises serious doubts about the government’s priorities—why use federal dollars to help a foreign oil company when any number of areas need more public funding, from housing to health care to clean water for First Nations?

Canadians are right to be outraged that the federal government is planning to bail out Kinder Morgan.

If you haven’t already sent a letter calling for the phase-out of fossil fuel subsidies, we need you more than ever: Tell the federal government to stop giving public money to oil, gas and pipeline companies!

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