Calgary-based TC Energy is starting construction on the Keystone XL pipeline between Hardisty, Alberta and Steele City, Nebraska, after the Jason Kenney government announced a US$1.1-billion “strategic investment” and put up another $4.2 billion in loan guarantees to underwrite the fiercely-contested project.

With one U.S. dollar selling for C$1.40 on the day of the announcement, Alberta’s gift to the pipeliner formerly known as TransCanada is worth $7.42 billion in Canadian funds, in the same week the province announced layoffs for thousands of teaching assistants, school secretaries, and janitors whose schools were closed by the coronavirus pandemic. Fossil industry newsletter Rigzone styled Kenney’s unparalleled generosity as “an approximately US$8 billion worth of financial support from the Province of Alberta”.

TC Energy CEO Russ Girling said the pipeline “could not have advanced” without the support of both Kenney and Donald Trump.

“Never has there been a more critical moment to support health, workers, and communities,” said Hannah McKinnon, energy transitions and futures director at Oil Change International. “Instead, the Alberta government is diverting limited and desperately needed public money to Big Oil in the latest misplaced attempt to revive the Keystone XL pipeline and prop up a sector that has no role in a more resilient, safer climate future.”

McKinnon added that Keystone XL “was a non-starter a decade ago and it remains one today. With trillions of dollars at play globally in relief and recovery, we have an unprecedented chance to invest in the future, not the past. Unfortunately, the Alberta government is still refusing to see the writing on the wall, a failure that comes at a huge cost to Albertans in this crisis moment.”

“Now is not the time to be further betting on the ongoing expansion of an industry that must become smaller to ensure a climate-safe future,” agreed Julia Levin, program manager, climate and energy at Toronto-based Environmental Defence. “It is the time to be putting in place a recovery program with measures to hasten a just transition for workers in the sector. Furthermore, starting construction during the COVID-19 pandemic is irresponsible, as worker camps and nearby communities are showing signs of being particularly at risk from virus outbreaks, and could place undue strains on rural health systems.”

The massive provincial subsidy means TC Energy will be able to complete the project with just US$2.7 billion of its own investment, Bloomberg says. The company expects the pipeline to begin operations in 2023.

“Once the project is complete and in service, TC Energy expects to acquire the Alberta government’s equity investment under agreed terms and conditions and refinance the US$4.2-billion credit facility in the debt capital markets,” the news agency adds.

“This is good news for our oil and gas industry,” Natural Resources Minister Seamus O’Regan told the Financial Post in an email. “It comes at a time when the industry needs it. It means thousands of good, well-paying jobs for the highly skilled workers in the industry needs now and into the future.”

“This decision provides a critical boost of confidence to the Albertan and Canadian economies,” added Canadian Energy Pipeline Association President and CEO Chris Bloomer. “It is essential that Canada can contribute to attract major investments like Keystone XL, which will result in billions in government taxes and royalties and improved market access for Canadian resources.”

In the U.S., the company said it plans to start construction this month, The Associated Press reports. That prompted a spokesperson for Montana Governor Steve Bullock to raise flags about the estimated 100 workers expected to enter the state to work on the project. “TC Energy holds a tremendous responsibility to appropriately manage or eliminate this risk, and we will continue to monitor the plans for that response,” Marissa Perry said.

Although Girling’s statement referred to the “ongoing backing of landowners, customers, Indigenous groups, and numerous partners in the U.S. and Canada who helped us secure project support,” the Financial Post is more forthright about the history. “The project, first proposed in 2008, had been staunchly opposed by environmental groups and some farmers along the route, and has repeatedly been the subject of lawsuits and regulatory delays,” the paper writes. “Last year, the Nebraska Supreme Court approved the project, removing the last remaining obstacle for the project after a protracted legal battle with a group of opposed landowners in that state.”

In an investor note Tuesday, BMO Capital Market analyst Ben Pham said the  announcement was “somewhat of a surprise” with North American oil prices below US$20 per barrel. But “those are likely transitory impacts, and the Alberta government is effectively bearing the risk of the U.S. election this year.” While Kenney is saying he hasn’t heard that the likely Democratic presidential nominee, Joe Biden, opposes the pipeline, “Biden was vice-president under Obama, when the Keystone XL project was delayed multiple times and ultimately vetoed,” the Post recalls.

With that risk in mind, the announcement actually prompted Moody’s Investors Service to shift TC Energy’s credit outlook from stable to negative.

“The negative outlook reflects the very high level of execution risk related to environmental, social, and governance factors associated with the Keystone XL pipeline project, which TC Energy has decided to move forward on,” Vice-President and Senior Credit Officer Gavin MacFarlane said in a release. “We do not assume that the project will be completed in our current forecasts for the company and will only incorporate cash flow when the project is complete. The decision to move forward is a material credit negative.”

The Globe and Mail says Kenney is acknowledging ongoing risks to the pipeline, including continuing legal action and the possibility of a new U.S. government after elections in early November. And “beyond the Premier’s concerns, the investment doubles down on the province’s economic reliance on its plentiful bitumen reserves at a time when, even pre-COVID-19, the world wasn’t exactly clamouring for more heavy crude from Alberta,” writes reporter Kelly Cryderman.

“But politically, the optics of borrowing money to invest in a pipeline just days after announcing the layoff of thousands of Alberta teaching assistants, school secretaries, and janitors are awful. More than 20,000 jobs in the education system could be affected,” she adds. “It’s money for pipelines but not school workers during one of the worst economic periods the province has faced. And that adds to the narrative from critics that Mr. Kenney and his United Conservative Party government prioritize (male-heavy) oil and gas and finance jobs above all others.”