Investors can't shoulder Trans Mountain political risk: McKenna

Canada’s former ambassador to the United States says Kinder Morgan shareholders can’t keep shouldering the political risk over the Trans Mountain expansion project.  

“Shareholders can’t continue to take a risk, which is not a market risk or a construction risk – but really a political risk,” Frank McKenna, deputy chairman at TD Bank, told BNN in an interview Friday.

“At the end of the day, the solution in the case of Kinder Morgan will be, in my view, that the government of Canada and the government of Alberta will probably take off their shoulders the political risk, not necessarily their construction risk. That’s on [Kinder Morgan] and their shareholders. But they shouldn’t be responsible for the political risk,” he added.  

Kinder Morgan Canada set a May 31 deadline to keep the project alive. Since then the federal government has been facing mounting pressure from business leaders across the country who have stressed that Canada’s reputation is at risk if the project doesn’t go through.

The country’s western-most provinces have been battling over whether the project, which is under federal jurisdiction, should be built or not. As tensions continued to escalate, Trudeau scheduled a meeting with Alberta Premier Rachel Notley and B.C. Premier John Horgan for this Sunday.

McKenna says he’s “feeling pretty optimistic” about the project’s future, but warns against high expectations that Sunday’s meeting will result in a resolution.

“[Trudeau] cares about it, he’s been working on it, but he hasn’t been publicly visible,” he said. “This gives him a chance for public visibility and to bring the full weight of the office of the prime minister to a meeting with these two premiers.”

“I don’t think it’ll result in a resolution on the spot of the issue,” he added. “So we should lower expectations.”