Article content

CALGARY – The Canadian federal government will end up spending much less than the initially reported $4.5-billion price to buy the Trans Mountain pipeline system and expansion project from Kinder Morgan Inc., once the company pays the government capital gains taxes.

Documents filed with the U.S. Securities and Exchange Commission by pipeline giant Kinder Morgan show the company considers the net purchase price for the pipeline to be $4.175 billion because it needs to pay Ottawa $325 million in capital gains taxes.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or How a 'recalcitrant' B.C. government forced Kinder Morgan to sell Trans Mountain to Ottawa Back to video

That’s 7 per cent less than the $4.5 billion price Finance Minister Bill Morneau announced on May 29 to purchase the Trans Mountain pipeline system and the delayed expansion project from the Houston-based company.

At the time, Kinder Morgan CEO Steve Kean said during a conference call that the agreement marked “a great day not only for our company but also for Canada.”

The call offered few details on how the deal between the two sides came together but the company’s SEC filings show a drawn-out negotiation in which Kinder Morgan initially asked for $6.5 billion for the 300,000 barrels per day pipeline and the 590,000-bpd expansion connecting landlocked Alberta to tidewater.