'Rhetoric and hyperbole': Horgan fires back at finance minister over feds' Trans Mountain backing - Canadanewsmedia
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'Rhetoric and hyperbole': Horgan fires back at finance minister over feds' Trans Mountain backing

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The federal finance minister singled out B.C. Premier John Horgan's efforts to thwart the Trans Mountain pipeline expansion Wednesday, as he outlined measures Ottawa is taking to remove "politically motivated" investment risks.

Speaking in Ottawa, Bill Morneau said his government is willing to compensate Kinder Morgan — or any other company interested in building the pipeline — against any financial loss due to the actions of the B.C. government.

"We're prepared to indemnify the project against any financial loss that derives from Premier Horgan's attempts to delay or obstruct the project," Morneau said.

Finance Minister Bill Morneau announced Wednesday that the Canadian government is willing to compensate Kinder Morgan against any financial loss due to B.C.'s attempts to obstruct the Trans Mountain pipeline expansion. (Chris Wattie/Reuters)

Speaking to reporters following an event in Vancouver, Horgan fired back at Morneau's characterization of the dispute.

"I think that is rhetoric and hyperbole on his part. There are fundamental challenges to that project that he well knows," Horgan said.

"For a Toronto-based finance minister to single out British Columbia as a problem here, he should look at the failure of Energy East, he should look at the failure of Keystone and a whole host of other projects."

Morneau accused the B.C. government of attempting to delay or obstruct the Kinder Morgan project. 0:42

Morneau declined to say how much Ottawa would be willing to spend to back the pipeline expansion.

Notley 'ready and prepared to turn off the taps'

Alberta Premier Rachel Notley responded to the comments from Ottawa by immediately passing her government's Bill 12 Wednesday afternoon.

The Preserving Canada's Economic Prosperity Act gives Alberta's energy minister the power to restrict shipments of oil and gas leaving that province.

Alberta Premier Rachel Notley speaks to reporters at a news conference in Edmonton on Wednesday. (Jason Franson/Canadian Press)

"If the path forward for the pipeline through B.C. is not settled soon, I am ready and prepared to turn off the taps," Notley said

Any restriction in supply could send already high gas prices in B.C. even higher. Notley did not say when Alberta would plan to use the legislation.

The B.C. government was quick to respond saying it considers Alberta's legislation unconstitutional.

Attorney General David Eby said B.C. would immediately go to court if the legislation is used.

"If they attempted to use it, we would be in court seeking an injunction to prevent them from using it and any damages that flowed from that type of action, we would be seeking to recover those," he said.

Eby has also written to Alberta calling for the legislation to be tested in court for constitutionality before Bill 12 is proclaimed.  

But Liberal opposition leader Andrew Wilkinson doubts going to court would do much to ease the potential spike in gas prices, should Alberta use its new legislation.

He instead called on the B.C. government to drop its opposition to the pipeline expansion.

"Are we going to watch the pump prices go through the roof for three years, while it goes through the courts? Going to court is not an answer to solving a problem through gentle Canadian negotiation," he said.

Wilkinson also said the B.C. government should consider providing some relief from gas prices that are already high through a break on the provincial gas tax.

Legal challenges

Kinder Morgan has set a deadline of May 31 to decide whether it will continue with the Trans Mountain project, which has federal approval. 

The pipeline expansion is facing uncertainty due to court action by the B.C. government over environmental concerns.

B.C. has filed a reference case with the province's top court to determine if it has jurisdiction to limit expanded shipments of heavy oil through the province.

Horgan has said clarity is needed to ensure the B.C. government protects its coastline, but critics say the move is a tactic to delay or block the project by creating uncertainty.

Protesters block a transport truck attempting to deliver heavy equipment to a Kinder Morgan site in Burnaby, B.C., in March. (THE CANADIAN PRESS/Darryl Dyck)

Meanwhile, an environmental law group in B.C. is expressing concerns about the federal government's plan to provide financial support for the pipeline expansion.

In focusing on the actions of the B.C. government, Ottawa is ignoring other legal risks the project faces, said Eugene Kung, a staff lawyer at West Coast Environmental Law.

"No matter how much money the government pours into this project, it still faces significant risks," Kung said. "Particularly the legal risks associated with the ongoing court challenges that could derail the project completely."

Seven First Nations are among more than a dozen groups challenging the approval of the pipeline expansion in Federal Appeal Court.

The challenge is based on principles of Aboriginal title and the Crown's constitutional duty to meaningful consultation with First Nations.

Until those issues are resolved in the courts, Ottawa should not be giving assurances the project can proceed, said Chief Judy Wilson, the secretary-treasurer of the Union of British Columbia Indian Chiefs.

"I think a lot of it was grandstanding and a lot of trying to reassure the shareholders and the investors, which was really hollow," she said of Morneau's comments Wednesday.

Shareholders meet in Calgary

Morneau's comments on financial backing for Trans Mountain ​come as Kinder Morgan Canada's stakeholders met in Calgary on Wednesday.

Ottawa says the twinned pipeline would create 15,000 jobs, 9,000 of which would be in B.C.

Discussions with the company on how large a cheque Ottawa may be willing to write to move the project forward continue in Calgary, Morneau said.

In a statement, Kinder Morgan Canada chairman and CEO Steve Kean said Morneau's comments were appreciated and he confirmed that talks are continuing.

"While discussions are ongoing, we are not yet in alignment and will not negotiate in public," he said.

With files from Yvette Brend

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OPEC threatens to turn on the spigots as oil price briefly hits highest point since 2014

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The price of the North American oil benchmark briefly touched $72 US a barrel late Tuesday despite the OPEC oil cartel publicly mulling boosting supply as soon as next month.

The price of West Texas Intermediate, the North American oil benchmark commonly known as WTI, was changing hands as high as $72.83 at one point on Tuesday. Although it slumped slightly lower on Wednesday, that was the highest level since November 2014.

Supply concerns in Venezuela and Iran have been overhanging the market for months, driving prices higher. 

Then late Tuesday the oil-producing cartel known as OPEC suggested it may soon turn on the spigots a little, after curbing its supply for the better part of the past year to boost prices.

The notoriously fractious cartel has been uncharacteristically collaborative of late, as OPEC and Russia had agreed to curb their collective output by about 1.8 million barrels per day until the end of 2018.

Last month, the cartel reported 166 per cent compliance to its own cut targets — meaning it has been pumping even less oil than it had planned to.

But speaking to a Reuters reporter on Tuesday, one unnamed OPEC source said the group is considering lifting those limits sooner than anticipated, in part because of the rising price of oil. 

While WTI was briefly at $72 US, Canadian oil companies have also seen their prices rise. The blend of oil from Alberta's oilsands is known as Western Canada Select and it, too, has risen to a more than three-year high, almost touching $58 U.S. on Tuesday.

Higher oil prices are doubly helpful for Canadian producers, because they are priced in U.S. dollars, while Canadian companies book most of their expenses in Canadian dollars.

In Canadian terms, WTI is currently trading as high as $91 a barrel, Bank of Montreal economist Doug Porter noted on Tuesday.

"That's up 50 per cent  from just eight months ago."

In Canadian dollar terms, the price of WTI is now where it was, on average, during what Porter called the "go-go years for oil prices," between 2007 and 2014.

"The lack of a currency response means that Canadian consumers are feeling the full impact of higher oil prices," he said.

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Comcast prepares to top Disney's $50-billion offer for Fox

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Comcast Corp confirmed for the first time on Wednesday it was preparing a higher, all-cash offer for the businesses that Twenty-First Century Fox has agreed to sell to Walt Disney Co.

While the U.S. cable operator said it was still considering its position, it said it was in advanced stages of readying an offer that would be “superior” and “at a premium” to Disney’s all stock offer.

“While no final decision has been made, at this point the work to finance the all-cash offer and make the key regulatory filings is well advanced,” Comcast said.

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Sources familiar with the deal told Reuters at the start of May that Comcast was preparing bridge financing for a cash offer for the Fox assets, but Wednesday’s statement is the first formal confirmation by the company it is ready to move.

The same sources said Comcast Chief Executive Brian Roberts will only proceed with a bid if a federal judge next month allows AT&T Inc’s planned $85 billion acquisition of Time Warner Inc to proceed.

Disney in December offered stock then worth $52.4 billion to buy Fox’s film, television and international businesses as it bids to beef up its offering against streaming rivals Netflix Inc and Amazon.com Inc.

Disney shares have fallen nearly 3.3 percent since, reducing the value of the offer to just over $50 billion.

“It all depends on the AT&T and Time Warner deal,” said Brian Weiser, analyst at Pivotal Research. “If that goes through it is highly possible there will more than one bid for Fox.”

Fox and Disney were not immediately available for comment.

Comcast, owner of NBC and Universal Pictures, has also made a 22 billion pound ($30 billion) offer to acquire the 61 percent stake in European pay-TV group Sky Plc that Fox does not already own. In doing so, it topped an earlier offer for the entirety of Sky by Fox.

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A regulatory filing in April showed Comcast offered to acquire most of Fox’s assets in an all-stock deal valued at $34.41 per share, or $64 billion last November – just before Disney’s offer was agreed.

After a sale, Fox’s remaining assets will include Fox News, Fox Business Network and sports cable networks.

Comcast shares were down 2 percent at $31.83 while Disney was down 0.7 percent at $103.26 in premarket trading.

“I think Fox, or its controlling shareholder and Board of Directors, has already expressed their preference – Disney, even though Comcast allegedly offered a higher consideration already,” said Jeffrey Logsdon, an analyst with JBL Advisors in California.

“Comcast does seem intent on winning this one (and) rivalry can frequently drive prices to un-economic levels.”

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Comcast v. Disney: a fight for Twenty-First Century Fox

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PHILADELPHIA — Comcast may make an offer for Twenty-First Century Fox, potentially putting it in a head-to-head bidding war with Disney.

Comcast Corp. on Wednesday did not provide specific details on a bid, other than to say that it would be all cash and at a premium to the value of Disney’s current all-stock offer.

The Wall Street Journal and others reported earlier this month that Comcast had $60 billion to challenge Disney.

Disney’s $52.4 billion bid would go a long way in allowing it to better compete with technology companies in the entertainment business. Any tie-up would put in its stable more Marvel superheros, as well as the studios that produced the Avatar movies, “The Simpsons” and “Modern Family.” Disney would control Fox’s cable and international TV businesses as well.

Comcast said Wednesday that it’s in the “advanced stages” of preparing its bid. The Philadelphia company said the structure and terms of its offer would be at least as favourable as Disney’s.

A potential transaction with either Disney or Comcast would not include the Fox News Channel, Fox Business Network, Fox Broadcasting Company and certain other assets.

Comcast’s stock fell 2 per cent in premarket trading, while shares of the Walt Disney Co., based in Burbank, California, dipped slightly.

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