Karl Marx called the fate of the Trans Mountain Pipeline system 170 years ago.
The announcement and details of the nationalization of the Trans Mountain pipeline system and expansion project evokes Karl Marx’s analysis of the capitalist state. In 1848 Marx wrote in the “Communist Manifesto” that “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.”
For Marx, the capitalist state, with all its sweeping powers, was built to guarantee the profits of private industry. Marx’s analysis holds true as capitalist states routinely pay for industrial waste, suppress labour and ensure access to resources across the developing world. The nationalization of this pipeline by this government is a manifestation of Marx’s theory.
The federal government asserted that the expansion of the Trans Mountain pipeline was in the national interest. Ostensibly, an expansion would lead to thousands of permanent jobs — which it won’t — and, more importantly, it would triple the capacity to transport bitumen to the west coast. Without a doubt, it is in the national interest to ensure that the oil companies roosting in the tar sands triple their profits, if the nation is “but a committee […] for the whole bourgeoisie.”
And it is here that the genesis for the nationalization of Trans Mountain begins.
Even before the nationalization process began, the government was already acting as an arm of private enterprise. Kinder Morgan, the owner of the pipeline, announced that the planned expansion of the pipeline would not go ahead if the federal government had not cleared all opposition to the expansion by May 31.
In response, Minister of Finance Bill Morneau announced the government would “indemnify” the expansion of Trans Mountain against any holdups associated with “unnecessary delays that are politically motivated.” This would mean paying Kinder Morgan the theoretical profits they might have made if those unsavoury “politically motivated” Canadians had never interrupted the pipeline business.
Private enterprise has always had a contentious relationship with democracy.
Kinder Morgan, however, was never going to build the expansion pipeline. At least their actions and finances suggested this. By imposing a hard May 31 deadline for assurances by the federal government to have a clear pathway for the expansion to go forward, Kinder Morgan asked the government to do the impossible. Legal challenges from B.C. and First Nations could take months. Moreover, Kinder Morgan is burdened with $37 billion of debt and would have needed $5.5 billion of loans from the government to build the pipeline. Kinder Morgan was in no shape to build the expansion and did not want to.
The federal government, as only a good manager could, did not allow the pipeline expansion to die. The Liberals, after all, have the whole capitalist class to look after.
So, Prime Minister Justin Trudeau’s government bought the 65-year-old pipeline from Kinder Morgan for the sum of $4.5 billion on May 29, which they cannot even sell for a profit since they overpaid for the pipeline by at least $1.2 billion. Additionally, costed projections for the pipeline expansion list the price tag at $7.5 billion more. But, even $7.5 billion is far too conservative when you consider the fact that every inch of new pipeline is going to be met with activism, legal challenges and Indigenous peoples blocking construction on their land.
The Canadian government will build the expansion no matter the societal, environmental and fiscal cost.
What does the Canadian public get for all the cash they will front? This luxury pipeline exudes the same quality as a 65-year-old moth-eaten fur coat. For example, just two days before the announcement to nationalize Trans Mountain, 4,800 litres of oil spilled from the aging pipeline. And that is just a fraction of the 146,400 litres spilled since 2011.
In terms of revenue, according to rates listed by the Association of Oil Pipelines, the Trans Mountain currently generates in excess of $300 million annually. This could potentially be a solid source of revenue for the federal government. It might fund green energies or expand social programs. Alternatively, the government could use the money to solve the water crisis on First Nation reserves that requires $3.2 billion to resolve — just about a quarter of the cost that will be spent on the Trans Mountain pipeline and expansion.
But a good manager of the affairs of the capitalist class would never allow a slice of the oil industry to be nationalized long enough to harness its economic power for social good.
The federal government, since nationalizing the pipeline, has continually reassured the capitalist class that the pipeline will not stay in the public’s hands for long. Rather, the government will steward the expansion into existence, and then unload it. This doesn’t resemble working for the Canadian people.
This is about ramrodding through the expansion as quickly as possible and then selling the pipeline and extension at a probable loss.
Make no bones about it, the nationalization of Trans Mountain is for the oil companies and capitalist class.
Even after 170 years, Marx has something to say about contemporary Canadian politics.