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Corbetta: Prime Minister Kenny will indeed cancel rail contracts on rail

The railway wagons are waiting for the pickup truck in Winnipeg. In February, the NDP government signed a $ 3.7 billion contract with CN and the Canadian Pacific Railways to hire up to 4,200 rail wagons to pull crude oil.


Prime Minister Jason Kenye's new government will cancel $ 3.7 billion in contracts signed by former Prime Minister Rachel Notley from the NDP just a few weeks before the announcement of the CN Rail, CP Rail and some other rail partners, a senior staff member the prime minister confirmed on Friday night.

The source says the government has received legal opinions – both from government and outside lawyers – stating that the government of Alberta may break these recent contracts through legislation, especially as Kenny warned in writing and publicly the chief executive officers of the two most senior lawyers, major railways in Canada that he will not consider his government to be bound by a treaty made by the NDP in an attempt to save his election.

Accomplished Friday night, Kenny's press secretary, Christine Mayat, provided a written email statement confirming the news revealed by the senior official.

"From the outset, it was clear to us that these treaties, which were pushed by a desperate government on the eve of elections, should never have been signed by the government or the railways," Mayat said.

"There was no reason for private companies not to raise rail by rail. This is still our position. If these treaties can not be transferred to the private sector under acceptable conditions, our government will do the utmost to protect taxpayers from Alberta. "

On February 1, Kennie announced the first day that Notley could legitimately declare the elections, which eventually took place on April 16, that if elected, he would consider all the contracts signed by the province to ensure they were best. the interests of the province and its citizens, something he called a "review of the ratio t

On February 19, Notley announced that it had signed Canadian Pacific and Canadian national lease agreements for renting 4,400 rail wagons to move the oil to North America. On the same day, Kenny confirmed his position that if he is elected – and he is 20 points ahead in the election at this point – he will consider the treaties to ensure they are a good deal for the Albanians.

The next day, on Feb. 20, Kenny sent letters to the chief executives of the two companies, warning them to cancel the contracts if it turned out they were not in the public interest.

"If elected, the United Conservative government will do its utmost to cancel the reckless $ 4 billion of NRA's borrowed tax dollars to intervene in the market," Kenny said.

He said oil companies would deliver more rail by rail if it is profitable and pointed out correctly that Alberta can not afford the deal because the NDP has huge annual billions of dollars in deficits that will result in a debt that is expected to reach 96 billion dollars by 2024,

The senior official said that while he could not reveal details in the contract, he could say what was not there. In Notley's fast-paced "attempt to get a" Golden Mother "pass to win an election victory, her current defeated government" has entered into very poorly negotiated contracts. "The contracts, the senior official says, do not seem to contain" types of guarantees "and exit clauses that someone who enters into a billion-dollar bargain would have one that would provide graceful exits from the contract, and this deal really blocks the government without an option , besides the nuclear option, if they want to get away.

"The detailed analysis shows that the government has significantly overpaid for services, but the conditions are confidential," the source said. However, it was revealed that CN and CP came in at $ 2.2 billion. From the $ 3.7 billion plan,

"The parties – especially the KP and the CN – signed cynical and exploitative terms – taking advantage of an outgoing government willing to make a deal for political reasons and under all conditions," the official said. "If (the railway companies) were reasonable, they would have withdrawn because Jason Kenny had made it clear what his intentions were. He did not hide it, they were known on the day of signing the deal and before they started taking steps to fulfill the contract. "

It's never great about investor confidence when a government kills deals made by previous governments. Tim McMillan, president and CEO of the Canadian Oil Manufacturers Association, often said in the past that the abolition of the Northern Portals pipeline by Prime Minister Justin Trudo was the most damaging thing to do for our economy.

Worker, who unilaterally killed the Enbridge Northern Gate in July 2017, after having endured years of rigorous and costly regulatory processes and being admitted to the House of Commons, shook investor confidence that has never recovered, dangerous than ever. -69, the Impact Assessment Act, which, according to critics, is unlikely to make major energy projects and pipeline construction impossible.

But this cancellation varies considerably. The contract holders were duly warned and a little time passed.

Judging by CN spokesman Jonathan Abekasis, it seems that the railway giant does not plan to counteract Kenny's new government.

"The CN firmly supports the Prime Minister's desire to sell Alberta oil and we want to be part of this decision ahead." This is a vague but generous statement.

CP does not return any messages or calls from Postmedia.

The hope of Kenya's government, which will hold its speech on Wednesday's throne, is that if rail transport makes sense, private industry will get stronger and will do that.

Licia Corbella is a journalist from Postmedia. lcorbella@postmedia.com

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