Regulations must be drafted before Bill 12 can be implemented, BC says it will challenge constitutionality in Alberta court

The Alberta premier really is ready to turn off the taps. Not tomorrow, there’s still plenty of work to do fleshing out Bill 12 regulations and setting out the process for turning off the taps, but with the passing of the legislation Wednesday Rachel Notley’s NDP government has given itself the authority to starve British Columbia of crude oil from the Trans Mountain pipeline.

Notley has used the pipeline fight with Horgan to bolster her own political standing, including rallies in Edmonton and Calgary which are critical to her 2019 re-election hopes.

The irony of this move, of course, is that the target of her ire, BC NDP Premier John Horgan, is an old buddy from their days working in the Glen Clark government during the 1990s.

But the NDP tribes in the two provinces could not be more different, at least on energy policy and issues.

Notley has taken a centrist approach that supports industry growth and jobs while also introducing a province-wide carbon tax and measures (the Carbon Competitiveness Incentives) designed to lower Alberta greenhouse gas emissions. In fact, as I’ll argue in my upcoming book, if one considers upstream (production), midstream (pipelines), and downstream (petrochemicals, bitumen partial upgrading), electricity generation (phasing out coal, phasing in 30% renewables), and energy efficiency,  in just three short years Notley has created the most ambitious and aggressive energy policy model in North America.

Supporting growth in the oil sands (increase in output by 1.3 million b/d by 2030) automatically meant the former labour lawyer would become a pipeline champion.

That decision put her on a collision course with Horgan, who aggressive campaigned against Trans Mountain Expansion pipeline and whose minority government relies upon Andrew Weaver and the BC Green Party to stay in power.

Andrew Weaver, leader, BC Green Party.

Horgan’s decisions to greenlight the Site C hydro power project – over vociferous opposition from many NDP voters – and revise liquefied natural gas development criteria in an effort to greenlight the $40 billion LNG Canada project essentially eviscerated any wiggle room he might have had to compromise on the pipeline.

The bitter dispute over the $7.4 billion 590,000 b/d Kinder Morgan project has now become a political death match.

And Notley is playing to win.

“At its root, that’s what our fight as well to build the Trans Mountain pipeline is all about, getting top dollar for our resources so we can invest in a better Albertan. With pipeline capacity stretched to the limit, Albertans have the right to choose how our energy is shipped so that Alberta gets the best return possible,” she said during yesterday’s press conference. 

“Bill 12 gives us that power.”

Bill 12 may give Alberta that power assuming it’s constitutional. At first blush, the legislation appears to do the very thing Alberta is objecting to: Horgan’s desire to restrict shipments of diluted bitumen through his province.

Nigel Bankes, professor and chair of natural resources law in the faculty of law at the University of Calgary, says the Canadian Constitution likely supports Notley’s plan.

Prof. Nigel Bankes.

“[Sect.] 92A clearly gives the province an authority which it would not otherwise have. That is, the authority to limit exports of primary production,” he said in an interview. 

I’d say that limited exports of crude oil from Alberta is valid because it’s justified by that particular language in 92A.”

Albertans with long memories will remember Sect. 92a as then Premier Peter Lougheed’s attempt to prevent the Canadian government from enacting another National Energy Program.

The section gives provinces the “exclusive” power to make laws concerning “non-renewable natural resources,” including “laws in relation to the export from the province to another part of Canada of the primary production from non-renewable natural resources” like crude oil.

But as lawyer Alistair Lucas explained in a 2012 post to the AbLawg, “subsequent scholarship strongly suggests that the theory works only in the absence of conflicting (and otherwise valid) federal legislation.”

Bankes suggests if Bill 12 founders, it will be on the question of a possible conflict with Canadian laws.

“If we can show that there was a conflict between the terms of the federal approval for Trans Mountain and this provision, then I think we might say that [inter-jurisdictional immunity and] federal paramountcy trumps,” he said.

Inter-jurisdictional immunity means provincial laws cannot “frustrate or impair” federal authority. If they do, then the principle of paramountcy says that the Canadian legislation takes precedent.

BC quickly promised to challenge Bill 12 in court.

BC Environment Minister George Heyman, forefront, Attorney General David Eby.

“In the absence of such a commitment, I intend to instruct counsel to bring an action challenging its constitutional validity in the courts of Alberta,” said BC Attorney General David Eby, according to the Canadian Press.

Will BC succeed? The “devil is in the details,” of the forthcoming regulations, says Bankes.

Notley is proceeding as if it will.

“At the end of the day today, Alberta will be equipped with new tools to assert our rights to control the flow of our resources to BC. Albertans, British Columbians, and all Canadians should understand that if the path forward for the pipeline through BC is not settled soon, I’m ready and prepared to turn off the taps,” she said.