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Trans Mountain pipeline and Canadian capitalism

Jesse McLaren

June 1, 2018

Facing mounting opposition from the Indigenous-led climate justice movement, Justin Trudeau has committed to paying $4.5 billion to Kinder Morgan for its Trans Mountain Pipeline—and at least $7.4 billion more to expand the tar sands pipeline. Liberal Finance Minister Bill Morneau claimed the “project is of vital interest to Canada and Canadians,” and this is partially true. While using the state to support ecocidal industries does not benefit the vast majority of people across Canada, it is the basis on which Canada formed and spread.

From colonial to capitalist rule

The state has always provided legal, economic and military support for capital accumulation—from England who in 1670 granted the Hudson’s Bay Company a fur trade monopoly over Indigenous territory on Turtle Island, to the province of Canada which in 1842 founded the Geological Survey of Canada with the goal of  “developing the resources of the Province” and for the “rapid settlement of the country.” By the 1850s oil wells were spreading across Ontario, and in 1880 the Imperial Oil Company was founded in London, Ontario.

As colonialism shifted from the fur trade to industrial capitalism, the Canadian state emerged to provide legal and military support—from the creation of the North-West Mounted Police (precursor to the RCMP) to displace Indigenous communities from the spreading railways, to the use of the military to put down the North-West resistance of 1885.

A few years later Treaty 8 was signed with First Nations across the north of western provinces, promising to respect their “right to pursue their usual vocations of hunting, trapping and fishing throughout the tract.” But the exploitation of oil to fuel the capitalist economy, supported by the colonial government, violated these Indigenous rights. In the 1920s the Alberta government funded the Alberta Research Council to develop the technology that could extract bitumen from the tar sands, but it remained in the experimental phase.

Oil and imperialism

The gas guzzling World War 2 and ongoing imperial competition during the Cold War was intertwined with the growth of Canada’s oil economy. In 1947 Imperial Oil began the oil boom in Alberta, and in the 1950s pipelines began to spread across the country to deliver the land-locked oil to international markets. In 1950 Enbridge began its pipeline east, and in 1951 Trans Mountain Pipeline Company was created to take oil west.

From the start the Edmonton-based company had support from the Canadian state—from the BC government that demanded that “no time be lost in establishing the pipeline,” to the federal government that incorporated the company through an Act of Parliament. There were no public consultations, no consideration for environmental consequences, and no regard for the sovereignty of the Indigenous nations whose land the pipeline would cross. Instead priority was given to west coast capitalist development and imperial competition during the Korean War. As the Trans Mountain president explained, “its existence is a military asset adding powerfully to the defensive strength of Canada and the United States.” While Canada’s military has been much smaller than the US, it has contributed to the US war machine—selling uranium, weapons and oil—and Canadian corporations have reaped the benefits of US military hegemony.

Tar sands expansion

Oil expansion continued through the 1960s and 1970s with the emergence of the tar sands, encouraged again by provincial and federal government across the spectrum. During the international oil crisis of 1973 Alberta Conservative Premier Peter Lougheed invested $100 million in technology to increase tar sands extraction, and in 1975 Liberal Prime Minister Pierre Trudeau (with support from the NDP) created Petro-Canada as a crown corporation, invested with $1.5 billion. While the Liberals and NDP supported the oil and gas economy and its pipelines as the next “nation building” exercise to follow the railways, there was growing Indigenous opposition—which defeated the MacKenzie Valley pipeline, as part of the Red Power movement of the 1970s.

The broadening of environmental concern led to the Kyoto protocol in the late 1990s, which the Liberal government signed at the same time as they were giving tax breaks to sustain the tar sands. As the Globe and Mail explained: “In the mid-1990s, with oil prices at depressed levels, the Liberal government of Jean Chrétien had to provide tax breaks to rescue the industry, in particular the two major oil sands producers, Suncor and Syncrude Canada Ltd. It wasn’t until international crude prices began to soar in 2003–reflecting war in the Middle East and the rise in China’s demand–that the oil sands sector found firm economic footing and expansion began in earnest.” That’s when Kinder Morgan got involved with the Trans Mountain pipeline, adding a parallel pipeline to increase capacity to 300,000 barrels a day.

From Harper to Crudeau

Harper was elected in 2006 and was a vocal supporter of tar sands expansion for nearly a decade—abandoning the Kyoto protocol, destroying environmental regulation and criminalizing dissent through Bill C-51—but this sparked the climate justice movement to challenge tar sands and their pipelines.

Trudeau was elected on a promise to respect Indigenous nations, and signed the Paris climate accord “to finally fight climate change.” In 2016 Trudeau was forced to reject the planned Northern Gateway pipeline, and in 2017 stood by as the Energy East pipeline proposal collapsed under the weight of Indigenous-led protests across Quebec and Canada. These were major blows to Canadian capitalists, and they don’t want to see a third pipeline proposal fall to defeat.

Kinder Morgan wants to expand the Trans Mountain pipeline, increasing its capacity from 300,000 to 890,000 barrels a day. But the climate justice movement—led by Indigenous nations who have not consented to tar sands expansion—has pushed the NDP in BC to at least partially reflect the majority opposition—and has exposed the Alberta NDP for their concessions to Big Oil. Now the Tories are trying to rebuild themselves on the frustrations of the 1%—from Jason Kenney attacking Rachel Notley in Alberta, to Andrew Sheer attacking Trudeau for having “chased away the investment” and calling on Trudeau to bail out Energy East.

Now Trudeau is risking his political career on the Trans Mountain pipeline—promising $4.5 billion to buy the pipeline and invest at least $7.4 billion more to complete the construction. This corporate giveaway (paying ten times what Kinder Morgan paid when it bought the time pipeline a decade ago), is a desperate reassurance to Bay Street that the Liberals will support pipeline expansion by any means necessary—from Trudeau refusing to repeal C-51, to his Natural Resources Minister threatening to use the army to defend pipelines, to his Finance Minister giving billions in public funds to buy a climate destroying pipeline.

A better world is possible

This is a slap in the face to Indigenous communities who Trudeau promised to respect, but it is in line with the historical role of the Liberals as the twin party of Canadian colonialism and capitalism. While Morneau claimed that “this is the best way to protect thousands of good paying jobs,” the Liberals are not motivated by the concerns of workers either. As NDP leader Jagmeet Singh explained, “$4.5 billion to create what Kinder Morgan has indicated would be fewer than 3,000 jobs. That’s almost $1.8 million per job—jobs that are short-term and won’t be there for the next generation.”

But neither is Trudeau simply a stooge for a Big Oil “deep state” which has captured democratic institutions. From its colonial foundations, the Canadian state has worked hand in hand with its corporations to extract resources without Indigenous consent, including oil that fuels the capitalist economy and imperial competition. From searching for oil deposits to developing the technology to extract bitumen, from incorporating the Trans Mountain pipeline to investing in its expansion, and from rescuing the industry with tax breaks to buying the pipeline outright—the Canadian state has always faithfully served its corporate masters, at all levels of government and across the political spectrum.

But over this time Indigenous communities have defended their land—from the signing of Treaty 8, to the defeat of the Mackenzie Valley pipeline, to the climate justice movement today which has pushed the NDP into partial opposition of tar sands. There is growing support for Indigenous sovereignty and a just transition for workers in extractive industries—and Trudeau has just shown that billions of dollars could be available to build this better world. We can demand that the billions be redirected from toxic tar sands to clean water and proper housing for Indigenous communities, and green jobs for workers—as part of building a movement towards a world beyond the colonial state and its capitalist corporations. 

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