Alberta Premier Rachel Notley during Ottawa press conference. Photo: CTV News

British Columbia insists it wants courts to define division of power over pipelines between provincial, federal govts

Sunday morning’s pipeline summit in Ottawa between Prime Minister Justin Trudeau and premiers Rachel Notley, and John Horgan has wrapped up with several commitments from Alberta and Canada that show promise of advancing the Kinder Morgan pipeline to the West Coast, but also continued determination from BC that it will ask the courts to determine how much regulatory authority it wields over the $7.4 billion project.

That is the fundamental issue between the three governments.

British Columbia argues that its constitutional responsibilities to protect the environment allow it to place restrictions on the pipeline, the most contentious one being the right to reduce or stop the shipment of diluted bitumen.

The federal government, supported by Alberta, argues that Sect. 91.10(a) of the Canadian Constitution gives it pre-eminent authority, which is supported up by legal precedents stretching back to the early 1950s and exercised through the National Energy Board Act from 1959.

Four things we learned from today’s meeting.

One, Horgan is not giving an inch.

“Despite all of the commonality between the three of us, we continue to disagree on the question of moving diluted bitumen from Alberta to the port of Vancouver,” Horgan told reporters after the meeting, as reported by CBC.

“We had a discussion about options the federal government laid out their plan over the next number of days, I’ll leave that to the prime minister and the minister of finance to tell you about.”

The BC NDP government is preparing a reference case, spearheaded by Vancouver lawyer Joseph Arvad, for the Federal Court of Appeal on the dilbit shipment issue and expects to have it ready in one or two weeks.

According to Horgan, Trudeau repeated his position that the Canada would not be joining BC in the reference case.

Two, the governments of Canada and Alberta have committed to invest in the pipeline project in order to reduce the uncertainty that led to the company suspending “non-essential spending” a week ago and setting a deadline of May 31 for a resolution of the jurisdictional and permitting issues that have already delayed construction in BC for months.

“Today in the meeting, one of the things that we discussed was that the federal government along with the government of Alberta has commenced discussions with Kinder Morgan to establish a financial relationship that will eliminate investor risk,” Notley said.

“I am quite confident, that should these discussions end successfully that the pipeline will be built. And that is good because the project is in the national interest.”

Three, the Trudeau government is preparing new legislation to assert federal control over Trans Mountain Expansion and, presumably, future pipeline projects.

No details are available just yet, but Energi News has suggested in past columns that the most likely option is changes to the NEB Act that allow the federal government to provide more direction to the arms length agency.

The federal government has already tabled Bill C69 that will significantly change how large energy projects are reviewed, approved, and regulated. The bill has received second reading in the House of Commons and is currently being reviewed by the Standing Committee on Environment and Sustainable Development.

Four, Trudeau promised that BC would not be “punished” by the federal government for disagreeing on Trans Mountain Expansion.

A new wrinkle in the controversy is Quebec’s support for BC and provincial rights over federal, not surprising given the province’s history.

But Quebec has gone one step further than BC, claiming the Canadian government is asserting exclusive authority.

“The recent assertions of federal representatives regarding the Trans Mountain pipeline, which refer to an exclusive application of federal rules, are detrimental to a proper resolution of this issue and raise concerns for the future,” Jean-Marc Fournier, the Quebec minister responsible for Canadian relations, wrote in an open letter published with CBC.

Fourneir is misrepresenting Canada’s position.

The Constitution gives both levels of government environmental protection responsibilities, but the provincial exercise of its authority cannot “frustrate” or “impair” the jurisdiction of the federal government.

If Horgan wants to restrict or stop the shipment of dilbit through the existing federally regulated Trans Mountain pipeline, constitutional experts interviewed by Energi News believe that is unconstitutional.

If, in addition, Horgan appoints a scientific advisory committee to study research on the behaviour of dilbit in a marine environment and spill response strategies, which would likely take months or even years to report and would cause Kinder Morgan to cancel the project, then that is unconstitutional.

Where do we go from here?

It appears that Trudeau and Notley are now serious about investing in Trans Mountain Expansion, but it remains to be seen if the Texas-based pipeline company is interested. Those discussions will likely take place in short order.

The Prime Minister will no doubt be introducing his amendment to the House of Commons over the next week or two.

And BC said this week that its reference case will be ready in a few weeks, though there is no guarantee the Federal Court of Appeal will hear the case after it already dismissed a BC and City of Burnaby request to appeal the Dec. 6 NEB ruling.

Lurking in the wings is the judicial review, also being undertaken by the Federal Court of Appeal, of the Canadian government’s decision to approve Trans Mountain Expansion in 2016. The lead applicants are BC First Nations.

For now, the various governments have their homework to complete.

But Canadians can expect the fiery political rhetoric on both sides of this issue to escalate. If BC and First Nations legal maneuvers fail, there is still the prospect of massive protests – which have already begun on a small scale around the company’s Burnaby operations – against the project.