If BC stops pipeline, it’s political war with Canada, Alberta

If Premier Horgan uses provincial powers to deny authorizations to Kinder Morgan, Prime Minister Trudeau must respond with full power of Canadian government

Green Party leader Andrew Weaver says opposition to the Trans Mountain Expansion pipeline was “critical” to both he and John Horgan, who needs the former climate scientist’s support to become premier. If a BC NDP government uses provincial authorities to try to stop construction, slated to begin this Sept., then Prime Minister Justin Trudeau must not only enforce the authority of the Canadian government to support the project, but punish British Columbia in the process.

As regular readers know, my experts say the federal government has sole jurisdiction over inter-provincial pipeline approval and regulation. This authority it set out in Sect. 92 of the Canadian Constitution and was first affirmed by legal precedent over 70 years ago.

Contrary to the belief of many BC New Democrats, the Province never had – and likely never will unless the Supreme Court of Canada radically re-interprets Sect. 92 – the right to say “no.”

Rescinding the agreement with Canada and reasserting the right to conduct provincial environmental assessments won’t magically give BC powers it never had.

Nor should it have those powers.

The Trans Mountain Expansion pipeline is in the national interest, for two reasons.

One, access to new markets is critical to the expansion of the Alberta oil sands, which is in turn critical to the Alberta economy.

The Conference Board of Canada reports estimate the direct and indirect benefits to Alberta from 2012 to 2036 at 441,232 person years of employment, $120 billion to the provincial GDP, and $19.4 billion to the provincial treasury.

Those are material, significant benefits to Alberta taxpayers, businesses, and workers. No province should be able to hold for ransom the economy of its neighbour.

Two, the authority of the Canadian government is in question on a number of fronts.

Kinder Morgan’s project passed the the National Energy Board review. Accusations that the process is broken are nonsense. Eco-activist and First Nation opponents engaged in the equivalent of an internet server “denial of service” attack, overwhelming the public review process with intervenor requests, then claiming the system was inadequate.

“If you looked at the last five years, all the criticism directed at the NEB process is not specific to any error the board made in its judgement or in its procedural choices,” said former NEB chair Gaetan Caron, now a fellow of the School of Public Policy in Calgary, said in an interview.

“The fundamental criticism directed at the NEB is a direct criticism of the policy choices under the terms of Mr. Harper’s government approach to climate change.”

Caron argues that pipelines became proxies for climate change and were accordingly targeted by eco-activists, forcing the NEB to try to accommodate public input it was never designed to accommodate.

But that argument ignores the very real concerns of many British Columbians about a significant pipeline spill along the right of way or from an oil tanker in the waters off the West Coast. These are legitimate concerns and should not be dismissed by Alberta or Ottawa.

Nor were they.

Whatever one may think of the public input process, Caron and other observers say the technical review of Trans Mountain Expansion was exceptional. Just because pipeline opponents don’t like the NEB’s approval doesn’t make the review illegitimate. The authority of the Canadian government stands behind that review and a new BC government doesn’t get to flout that authority with impunity.

Trudeau has his own dog in this fight.

His government is forecast to run budget deficits of $113 billion over four years. The only ready source of tax revenue is an expanding oil sands. The Conference Board of Canada estimates Ottawa would enjoy $46.7 billion fiscal benefits from Trans Mountain Expansion alone, and the Canadian Energy Research Institute calculates the total Canadian tax take from the Alberta oil sands over the next 20 years at greater than $400 billion.

No prime minister in his right mind is going to forego that sort of tax revenue.

And if Trudeau allows his government to be bullied by soon-to-be Premier Horgan over Trans Mountain Expansion, then he can say goodbye to the 1.1 million b/d Energy East project – the 4,600 pipeline from Alberta to the Maritimes –  currently beginning its NEB review.

Can you imagine Quebec supporting a pipeline after British Columbia was allowed to reject one?

And what of Trudeau’s prized climate policies, sold to Canadians as part of the plan to build legitimacy for energy infrastructure projects? An idea over 80 per cent of Canadians agree with, by the way, according to Abacus Data polling.

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The national carbon tax, methane emission reduction regulations, and future climate policies would be thrown into chaos. Where would be the incentive for Alberta and Saskatchewan to support them?

No, if Horgan and Weaver throw the weight of the BC government against Kinder Morgan – denying permits and access, hiking rates, obstructing at every turn, the only options they have – then Trudeau must return fire.

And much heavier fire.

Trudeau must demonstrate to the provinces that he is prepared to defend the integrity of federal institutions and approvals, willing to back up industries that have every legal and moral right to operate in this country.

That’s right, Alberta has a moral right to ship oil sands crude to Asian markets from the West Coast without interference from British Columbia.

Under NDP Premier Rachel Notley, the Alberta government has built a solid working relationship with oil sands producers, who helped drafted the controversial 100 megatonnes emissions cap and the “output-based allocations” regulations to implement it.

Already oil sands producers are preparing to implement new technologies to replace natural-gas generated steam with solvent, potentially lowering the carbon-intensity of oil sands crude to that of any other average crude oil.

And Alberta is studying – and should implement – the idea of subsidizing the construction of partial upgraders that would turn the gooey bitumen into medium to heavy crude that would not require 30 per cent diluent to flow in the Trans Mountain Expansion pipeline, thereby doing away with dilbit, which is one of the chief complaints of Kinder Morgan opponents.

For all these reasons, Horgan and Weaver should keep their powder dry. But if it’s war they choose, then it’s war they should get.

Political scientist Keith Brownsey of Mount Royal University says Trudeau has too much riding on this looming battle to fail. And he has plenty of weapons to pressure Horgan.

“The Prime Minister can call up the Premier and be negative, maybe cancel federal projects in British Columbia. Or maybe cheques to the Province get lost in the mail,” he said in an interview.

For fiscal year 2017/18, Canada is scheduled to transfer $6.66 billion to BC for health and social spending. Prime Minister Trudeau should tuck that cheque back in his desk until Horgan and Weaver come to their senses.

The other $1.7 billion pencilled in for BC? Same fate as the other cheque.

Federal support for highway construction, infrastructure improvement, etc.? Nope.

And if Horgan and Weaver persist, then British Columbians should recall the threat by Jim Carr, natural resources minister, to call in the RCMP – and the army if necessary – to ensure that Trans Mountain Expansion gets built.

British Columbians, in the persons of their political leaders, should yield gracefully on the Kinder Morgan pipeline, knowing its critical importance to Canada and Alberta.

But if they do not, then they should suffer the consequences. And I say that as a resident of British Columbia.