Quebec has right to review Energy East, but is this BC all over again?

Alberta, Saskatchewan must be wary that Quebec review doesn’t become basis to oppose Energy East in future

Canadian constitutional scholars says Quebec has the legal right to review Energy East, but the politics are starting to look suspiciously like British Columbia’s opposition to West Coast pipeline projects.

Margot Young of the UBC law school says that while the Canadian Constitution gives the federal government exclusive authority to approve and regulate inter-provincial pipelines, both Ottawa and the provinces are responsible for protecting the environment.

“Primary decision-making with respect to the pipeline lies at the federal level,” she said in an interview. “But that doesn’t mean that the pipeline, when it goes through provincial territory, doesn’t also become subject to some of the provincial laws.”

Some provinces, like British Columbia, have folded their environmental review into the federal process in an effort to streamline assessment and reduce duplication. That hasn’t happened in Eastern Canada, though as Quebec demonstrated by recently waiving the review of a $1.1 billion cement plant, La Belle Province is quite happy to do the expedient thing when it suits.

Even the notion that only the federal government exercises authority over inter-provincial pipelines is less rigid than in the past, according to James Coleman, an assistant law professor at the University of Calgary.

Coleman says there are three viewpoints to consider when thinking about this issue:

1. The traditional position, favoured by TransCanada, the Energy East proponent, that the Canadian government has exclusive jurisdiction over inter-provincial pipelines as set out in Sect. 92 of the Constitution Act, 1867. Constitutional scholar Dwight Newman made this argument quite forcefully last year in a Macleans’ op-ed when he argued that provinces and municipalities have no role whatsoever when it comes to pipelines that cross borders.
2. Provinces have a role in reviewing and regulating, but can’t “impair” federal authority. In a practical sense, this means that TransCanada has to abide by provincial environmental regulations as long as they don’t contradict the federal regulator – the National Energy Board – or other Canadian laws. This position implies a more cozy co-existence between the federal and provincial governments.
3. Provinces can impose conditions as long they don’t make the project unviable. BC Premier Christy Clark tried a version of this with her five conditions for the Northern Gateway and Trans Mountain Expansion projects. Conditions serve two purposes. One, they force Ottawa to address specific issues, like First Nation consultation. Second, they provide the province with political leverage, something Clark has done quite brilliantly, to the annoyance of pipeline supporters.

Young warns that Canadian courts are currently interpreting jurisdictional disputes within a framework of “co-operative federalism.” In plain speak, why can’t we all just get along?

“[Co-operative federalism] is where you don’t have a stark division between what the federal government does, what the provincial governments do. Instead, you have a division of powers that recognizes the best scenario is where both levels of government are cooperating,” she said.

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Under a doctrine of co-operative federalism, courts might not hold with the exclusive federal responsibility of the Canadian government over inter-provincial pipelines, Young says.

The uncertainty around how a Quebec review might play out is reflected in TransCanada’s dismay when it received the government injunction seeking to force the Calgary-based company to participate in hearings that start Monday. TransCanada spokesman Tim Duboyce says there were a series of discussions with the Quebec minister’s office in early 2015 and the two sides agreed on a provincial process that would not include a full-fledged environmental impact study.

Quebec Environment Minister David Heurtel clearly held a different view of the discussions because his department announced the review process last June, according to a Canadian Press story.

“At the time we were of the impression the issue raised in the two older letters had thus been resolved, an impression reinforced by the fact we did not receive any other indication there remained an issue until (Tuesday),” said Duboyce.

Young says the legal issues are reasonably straightforward: “The bigger question here is not if Quebec can do this legally, but what are the politics around doing it?” she asks. “I think everyone is saying, this is the East interfering with the West.”

That really is the sixty-four dollar question: Is Quebec traveling the same road as BC, setting out early road blocks to the pipeline it will later use to oppose the project?

Heurtel says Quebec hasn’t taken a position for or against Energy East yet, but Clark said the same thing about Northern Gateway and Trans Mountain Expansion and eventually opposed them.

Saskatchewan Premier Brad Wall was certainly skeptical of Quebec’s motives. He called the decision to review Energy East “divisive” and told reporters at a news conference earlier this week, “Enough is enough. Saskatchewan and Western Canada also has to protect it’s own interest and send some strong messages if that’s what the province of Quebec is doing.”

Alberta Premier Rachel Notley took a different approach. She said that after discussions with Quebec and federal officials it appears Quebec wants to do a review similar to one Ontario did last fall.

“I am going to leave the gun in the holster until we are actually at the gunfight, and we are not there right now,” Notley said.

But the bigger issue is how Quebec might use review results to support political opposition to Energy East in the future if the project runs into the kind of eco-activist led opposition we’ve seen in BC over the past five years.

Alberta and Saskatchewan will be watching Quebec’s Energy East review very closely for signs of a process biased against Energy East.