Bmo* BMO warns on Trans Mountain * Markets at a glance * Canadian dollar down to 78 cents * Facebook earnings in spotlight this week * What else to watch for BMO warns on Trans Mountain Douglas Porter has a short- and long-term view of the cost of killing Kinder Morgan Canada Ltd.'s Trans Mountain pipeline expansion. Bank of Montreal's chief economist recently gave a series of seminars in Alberta and British Columbia, where he was asked to outline the economic consequences of the death of the project, which is in limbo as provincial and federal politicians squabble in the wake of Kinder Morgan's threat to kill the project if a solution to the opposition in B.C. can't be found by the end of May. "In the short term, it would send an unfortunate and high-profile message to investors that it has become much more difficult to develop resources in Canada, and compound the lack of inbound investment into the country," Mr. Porter said in recounting how he answered the question. "Longer-term, it would likely mean that the heavy discount on Canadian oil will remain firmly in place, crimping revenues, tax receipts, investment, production and employment in the sector." To recap, Kinder Morgan has stopped most spending on the project as the Alberta and B.C. governments threaten each other, and Ottawa tries to find a way out of the mess in advance of the company's May 31 deadline. "We believe several options exist for KML after the April 8 suspension of non-essential spending on TMEP, but a May 31 deadline looks challenging on multiple levels," Credit Suisse analyst Andrew Kuske and Mohammad Khan said in a research report, referring to Kinder Morgan Canada by its stock symbol and the Trans Mountain expansion project by its initials. "KML's fortunes revolve around executing TMEP. We have confidence in management, but believe political and legal realities will translate into delays and challenges for the project in a rather fluid situation," they added. This comes, by the way, as the price of Western Canada Select, a blend of heavy crude and oil sands bitumen, is perking up, narrowing the discount to West Texas intermediate, the American benchmark. Pipelines play a role here, as BMO's Mr. Porter noted, and Trans Mountain is hardly alone in being mired in controversy and delay. The Keystone XL pipeline has been delayed for years, though is more likely to proceed now, given President Donald Trump's approval, noted Paul Ashworth, chief North America economist at Capital Economics. But getting it done will take years. "Without added transportation capacity, there is a risk that the discount on Canadian heavy oil could increase again," Mr. Ashworth said. Read more