Bill Morneau, finance minister (left) with Prime Minister Justin Trudeau
Trudeau, Morneau fiddling while integrity of Canadian regulatory system burns to the ground
Watching Justin Trudeau and Bill Morneau fumble the Trans Mountain Expansion file is disheartening. The Liberals started well after their 2015 election, approved two pipelines in 2016, have said all the right things in public (“This pipeline will be built!”), but since John Horgan and the NDP formed government in British Columbia last summer, it’s been one faux pas after another. Here is the latest: Why in the world is Morneau talking about the Canadian Pension Plan investing in the project when the Trudeau government hasn’t passed the promised legislation to clarify the constitutional dispute with BC?
Where is it? How long does it take the Canadian government to draft legislation, especially in the midst of a fast unraveling political and constitutional controversy?
Anyone with eyes can see what Horgan and George Heyman, his environment minister, are up to.
Heyman explained in detail during a BC legislature committee meeting that the NDP were advised in no uncertain terms when they formed government that the Province could not stop a federally approved pipeline.
Energi News experts have been saying this for months, much to the consternation of TMX opponents, including a few legal experts who argued that “co-operative federalism” (provincial and federal governments share jurisdiction, agree to get along for the sake of the nation) would trump “classical federalism” (Canada has jurisdiction thanks to Sect.10(a) of the Constitution and BC cannot pass any laws that “impair” or “frustrate” that essential power).
The Federal Court of Appeal punctured that line of reasoning when it refused to hear an appeal from BC and the City of Burnaby of a Dec. 6 ruling by the NEB that asserted exclusive federal power over Trans Mountain Expansion.
So, Horgan and Heyman shifted to Plan B: expanding the constitutional jurisdiction the Province does have over environmental protections.
On Jan. 30, BC proposed five new regulations, four of which were intended to safeguard against spills of diluted bitumen. Natural Resources Minister Jim Carr said BC was welcome to pass all the protections it liked as long as they didn’t step on federal toes.
Which brings us to the now infamous fifth regulation: “Restrictions on the increase of diluted bitumen (“dilbit”) transportation until the behaviour of spilled bitumen can be better understood and there is certainty regarding the ability to adequately mitigate spills.”
Notley blew her stack and for a few weeks banned BC wine from Alberta.
Horgan sort of backed down, announcing the issue would be referred to a provincial court as a reference question, which his government did in late April.
“We have been clear from the outset that the appropriate way to resolve disagreements over jurisdiction is through the courts, not through threats or unlawful measures to target citizens of another province,” said David Eby, attorney general.
After threatening to turn off the oil and gasoline taps to the West Coast, Notley’s Bill 12 to give her the power to do just that received royal assent late this week.
Kinder Morgan watched all this to-ing and fro-ing and correctly concluded that BC is involved in a game of whack-a-mole: if the courts rule in the favour of Canada and Alberta on Point 5, there will soon be another regulation introduced to exert provincial control over some other aspect of Trans Mountain Expansion.
Then another and another and another. Just like the Terminator will never stop pursuing John Connor, Horgan will never stop hounding and harassing this pipeline project.
Indemnifying Kinder Morgan for financial losses caused by the Horgan government, announced by Finance Minister Morneau on Wednesday, isn’t going to get the job done.
Morneau mused about another pipeline company taking over Trans Mountain Expansion if the Texas-based Kinder Morgan cut its losses and backed out, but which private corporation will consider such an action if the federal government hasn’t yet resolved the legal and constitutional questions?
Why would the Canadian Pension Plan consider investing in the project – as Morneau suggested it might on Friday – under these conditions?
Given where we stand today, Trans Mountain Expansion is too risky, just as Kinder Morgan claims.
The Horgan government has undermined and eroded the authority of a Canadian government approval of a federally regulated project.
That issue must be resolved. There is no other issue more pressing at the moment. As Natural Resources Minister Jim Carr frequently claims, there is $500 billion of capital investment in Canadian natural resource projects expected over the next 10 years and the integrity of the Canadian system must be upheld and confidence restored.
Morneau must stop musing about investment options in the media. His comments are distracting and only fomenting more opposition in British Columbia, where West Coasters are rightly wondering what sort of gibbering idiots they helped elect to run the country.
Trudeau must introduce the necessary legislation to Parliament, keep Kinder Morgan on board until it can be debated and passed, then assert the full power of the Canadian government to restore the legitimacy of the Canadian regulatory regime.
Anything less will be an admission that the Prime Minister and his finance minister are not fit for their offices.