TMX: Why Canada Owns a Pipeline Company

In the spring of 2018, a Texas oil company looked at Canada and decided it wasn't worth the the effort and the risk to keep trying to build a pipeline to Canada's Westcoast.

Kinder Morgan had spent $1.1 billion and five years trying to twin an existing pipeline from Alberta to the British Columbia coast. It wasn't trying to build another pipeline route like the Northern Gateway Pipeline, it was adding capacity to an existing line.

It had won its legal challenges. It had federal approval. But on April 8, 2018, They had enough and walked away, suspending all non-essential spending on the Trans Mountain Expansion. The company's chief executive, Steve Kean, explained the decision in one sentence that should be read slowly.

A company cannot resolve differences between governments, he said, and Kinder Morgan would not put its shareholders at risk on the remaining spend.

A private company decided that the political risk of building infrastructure in Canada was greater than the value of the pipeline itself. It would rather write off a billion dollars than keep going.

Seven weeks later, the Government of Canada bought the whole thing for $4.5 billion. Not because it wanted to own a pipeline but because we needed one and no one would build it after 5 years spending money on lawyers in court cases.

Why the pipeline had to exist

For most of the last two decades, Canada has produced far more oil than it could sell and it could only sell it to the United States, at a discount. The economic development of the resource creating high paying jobs, and a strong federal tax base was almost 100% dependent on the whims of the USA.

In 2024, Canada exported 3.93 million barrels of crude oil a day to the U.S., which came to 93% of everything the country shipped out.

When you have only one buyer, that buyer sets the price. For years, Canadian heavy oil sold at a steep discount to the world price, not because the oil was worse, but because it had nowhere else to go. Energy economist Peter Tertzakian describes the condition, "Canada, spent a decade as a hostage to a handful of American refineries, because production kept outrunning the country's ability to ship it anywhere else."

The existing Trans Mountain pipeline, first built in 1953, was the only line running from Alberta to tidewater. It was the only escape hatch Canada had and it the capacity was too low to sell our over capacity to the world at large.

The Trans Mountain Expansion

Kinder Morgan first priced the project at $5.4 billion in 2013. By the time Ottawa bought it in 2018, the estimate had climbed to $7.4 billion. Under federal ownership, the number kept moving. It hit $12.6 billion in 2020, $21.4 billion in 2022, and roughly $34 billion by the time the expanded pipeline finally entered service on May 1, 2024, twelve years after it was first proposed.

The Parliamentary Budget Officer warned in 2022 that Ottawa stood to lose money on the investment, butthat cancelling it outright would mean writing off more than $14 billion in assets.

The pipeline was expensive, it was late, and it was built by the government because there was no other option after the proponents said enough is enough and walked away from investing in Canada.

What are TMX Revenues?

In 2024, the expanded system opened, and the pipeline started doing the one thing it was built to do. Move oil.

Trans Mountain Corporation's total revenue was $522 million in 2023, the last full year before the expansion opened. In 2024, with the expanded system running, revenue jumped to $1,882 million. By 2025, the company posted full-year net income of $556 million, up from $5 million the year before.

That is a turnaround from a net loss in 2023, driven by an $888 million writedown, to more than half a billion dollars in profit two years later.

The number that matters to Canadians is the cash went back to the public coffers. Trans Mountain's 2025 results returned more than $1.7 billion to Canada through interest payments, dividends, and fees.

More than $1.7 billion. In one year. From an asset the government was told it would lose money on.

The pipeline is a Crown corporation running at 86% utilization for the year, and 91% in the final quarter, delivering measurable cash back to the country that had to built it.

The Jobs TMX Created

Before the pipeline moved a single barrel, it moved people into work.

Over the life of the construction project, Trans Mountain and its contractors hired approximately 37,277 people to work on the expansion. An economic analysis by EY estimated total spending on the expansion from 2018 to 2023 at $26 billion, of which $11 billion went directly to wages.

The project paid out $11 Billion in paycheques. Of that a percentage was put back in the coffers by income tax payments.

These were welders, pipefitters, heavy equipment operators, inspectors, truck drivers, and tradespeople, hired by named contractors across seven construction companies from Edmonton to Burnaby. The work went to companies like SA Energy Group, Ledcor, Kiewit, and Midwest Pipelines, to union, non-union, and Indigenous workers along the corridor.

And the relationship with Indigenous communities was not incidental. As of March 2023, the project had signed agreements with 81 Indigenous communities along the route, worth $657 million, and had generated more than $4.8 billion in contracts with Indigenous businesses. Whatever else is debated about this pipeline, that economic participation is real, it is documented, and it belongs in the ledger.

The Trade War Changes Things

When the United States began threatening tariffs and questioning Canada's sovereignty outright, the country's near-total dependence on a single oil customer stopped looking like an economic inconvenience and proved to be a strategic vulnerability. If your only buyer is also the country pressuring you, your oil is not leverage. It is a liability.

The Trans Mountain Expansion is the one thing that changes that math.

Since the expanded system opened in 2024, roughly two-thirds to three-quarters of the crude shipped from Canada's Pacific coast has gone to buyers in Asia, not the United States. Those barrels reach China, South Korea, Japan, and Singapore. The value of Alberta's oil exports to Asia went from essentially zero before the expansion to more than $1.1 billion by October 2025.

And the effect reaches further than the barrels that actually sail west. Jackie Forrest of the ARC Energy Research Institute points to something that happened the moment the expanded pipeline opened. As soon as Trans Mountain started up, she says, the Americans had to pay us a better price for our crude, because we finally had options.

A pipeline to the Pacific does not just sell oil to Asia. It gives Canada the ability to say no to the United States. It means a Canadian producer can choose the buyer instead of taking whatever the only available buyer offers. It means that if an American refinery wants Canadian heavy crude, it now competes for it, rather than dictating the terms.

For the first time in a generation, Canada has somewhere else to go and it gave us leverage over negotiations with the US.

Which brings us back to Kinder Morgan, and to the uncomfortable truth at the centre of this whole story. If this pipeline is such a good investment, where is the company willing to build it?

Why No Company Will Build the Pipeline

The economics are not the problem. Every credible energy economist who has looked at a second west coast pipeline agrees the diversification logic holds. The existing Trans Mountain expansion has already proven it is profit, improving the price Canada can charge the US and Asia. The money is there. The demand is there. The route is there.

What is missing is a private company willing to carry the risk.

Kinder Morgan did not walk away from Trans Mountain because it was unprofitable. It walked away because it was trapped by political forces making it too expensive and difficult.

In May 2017, Kinder Morgan raised $1.75 billion through an initial public offering of its Canadian division, one of the largest IPOs in Canadian history, for the specific purpose of funding this pipeline. The moment it took that money, it took on a legal duty to protect the people who gave it. By the end of 2017, the company had already spent roughly 930 million dollars on the project.

Then the ground shifted underneath it.

Who Took the Government to Court.

In the case Tsleil-Waututh Nation v. Canada, the applicants were five First Nations, two cities, and two conservation groups.

The First Nations were the Tsleil-Waututh Nation, whose reserve sits directly across Burrard Inlet from the pipeline's marine terminus, the Squamish Nation, the Coldwater Indian Band, the Stó:lō Collective, the Upper Nicola Band, and the Stk'emlupsemc te Secwepemc of the Secwepemc Nation.

The two cities were Vancouver and Burnaby, the latter being where the pipeline ends and where the Westridge Marine Terminal loads its tankers.

The two conservation groups were the Raincoast Conservation Foundation and Living Oceans Society, represented by Ecojustice, and their concern was specific: the effect of a sevenfold increase in tanker traffic on the endangered southern resident killer whales.

The Supreme Court of Canada Findings

First, the National Energy Board had drawn the boundaries of its review too narrowly, leaving project-related marine shipping out of the environmental assessment, which meant the impact on the killer whales was never properly weighed under the law.

Second, the Crown, meaning the federal government, had failed to adequately consult the First Nations at the final stage of the process. The court's own description of Canada's consultation was that it fell well short of the mark.

After the Canadian Government went through the process a second time, the same First Nations challenged them in court again. This time they lost and the TMX expansion was going to be built. In Coldwater First Nation v. Canada, decided February 4, 2020, the Federal Court of Appeal found that the second consultation had been adequate, and that the duty to consult, while real, does not amount to an Indigenous veto over a project. The court had drawn a clear line. The government must consult properly but it does not have to obtain consent to move forward with projects.

But these court cases were only one of the issues Kinder Morgan was facing when it came to the TMX expansion, there was a fight between two provincial governments on its way to court. There was nothing any private proponent could do but watch things go from bad to worse, so it decided to get out of Canada.

The Provincial Governments Fight

British Columbia elected a new government in 2017 that had campaigned on using every tool in the toolbox to stop the pipeline. That government referred a constitutional question to the BC Court of Appeal, asking whether it could create a permitting regime restricting the flow of diluted bitumen through the province, a regime that would apply, in practice, to one project and one project only.

Alberta responded by passing Bill 12, the Preserving Canada's Economic Prosperity Act, which gave its energy minister the power to choke off oil and fuel shipments to British Columbia, with fines of up to 10 million dollars a day. Premier Rachel Notley said plainly that if the path forward was not settled soon, she was prepared to turn off the taps. British Columbia, which depends on Alberta for much of its gasoline, called the law unconstitutional and prepared to sue.

Kinder Morgan was stuck between two provinces, one threatening to cut off the other's fuel. The other threatening to block access to tidewater.

On April 8, 2018, the company suspended all non-essential spending, and its chief executive, Steve Kean, said "A company cannot resolve differences between governments." While the company had won every legal challenge, he said, a company cannot litigate its way to an in-service pipeline amidst jurisdictional differences between governments.

Read that carefully, because it is the whole point. Kean was winning in court but it did not matter. The problem was that no company, however deep its pockets, can force two governments to stop fighting each other.

On August 30, 2018, when the Federal Court of Appeal quashed the entire project approval, Kinder Morgan's shareholders voted almost unanimously to sell the pipeline to the Government of Canada.

That is the part that should stay with you as Alberta and Ottawa promise a second pipeline. The reason no private proponent has come forward is not that the oil will not sell. It is that the political risk that broke Kinder Morgan has not gone anywhere. BC and Alberta still have different priorities, Indigenous nations have their agendas, the cities and conservation groups stand in the wings waiting to see what happens next.

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NOTE: Due to the highly political nature of this topic I want to be clear. This article is written from primary non political, non social media sources,

What you should be coming away with after reading this article

The Federal Liberal Government approved both the Northern Gateway and Kinder Morgan expansion - but they messed up a couple of things resulting in the Supreme Court ruling for those opposed to the pipeline

The governments who pushed Kinder Morgan out and made it too risky for companies to invest in building infrastructure in Western Canada were the municipalities of Vancouver and Burnaby, the indigenous governments along the pipelines

The provincial governments of AB and BC going to court was the last straw

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Shannon Peel is a Brand Narrative and Communications Strategist. She builds strategic brand storytelling ecosystems, the systems that help businesses, executives, and thought leaders earn authority, credibility, and citations across the digital landscape. Shannon writes about brand strategy, marketing, the Canadian economy, business resilience, and the evolving gig economy. She is a published author and host of the BrandAPeel Podcast.

Sources: Canada Energy Regulator, Crude Oil Annual Trade Summary (2024) and Overview of Canada-U.S. Energy Trade (2025); Trans Mountain Corporation, year-end 2024 and Q4/full-year 2025 financial results, and project employment, jobs, procurement, and economic benefits materials; BOE Report and Business in Vancouver, timelines of Trans Mountain Expansion milestones; Kinder Morgan Canada Limited press statement, April 8, 2018, and Kinder Morgan Inc. IPO and SEC filings (2017 to 2018); Parliamentary Budget Officer, Trans Mountain financial analysis, June 2022; Resource Works, project figures on Indigenous agreements; Ledcor Group corporate materials; BuildForce Canada, 2025 to 2034 construction labour forecast; Deloitte, Future of Canada Centre, construction workforce analysis (2025); BIMCO analysis reported by Seatrade Maritime (January 2026); Kpler ship-tracking data reported by Reuters (May 2025); Alberta Central, oil differential analysis (August 2025); Asia Pacific Foundation of Canada, Indo-Pacific crude export analysis (January 2026); CBC News, coverage of the July 2026 West Coast pipeline announcement quoting Peter Tertzakian and Jackie Forrest of the ARC Energy Research Institute; Associated Press (July 2026); Global News (May 2019) and CBC News (February 2019) on the British Columbia reference case and Alberta Bill 12; Tsleil-Waututh Nation v. Canada (Attorney General), 2018 FCA 153, and Coldwater First Nation v. Canada (Attorney General), 2020 FCA 34; legal analyses from Stikeman Elliott (September 2018), Regulatory Law Chambers (October 2018), Bennett Jones (February 2020), and ABlawg, University of Calgary Faculty of Law (September 2018); Tsleil-Waututh Nation, Sacred Trust Initiative. Media sources used only for factual reporting and for direct quotes from named sources.