So, you thought the Trans Mountain pipeline expansion farce could not get any more ludicrous? Think again. This week, we are about to see just how crazy that crazy can get.
In a pique of petty irrationality, Alberta premier Rachel Notley has tweeted that she will be boycotting the western premiers conference—ostensibly because she can’t walk and chew gum at the same time.
Apparently, for Notley’s New Democrats the prospect of a national pharmacare program that the party has long fought for across Canada is not a sufficient cause to travel up North and temporarily set aside their vindictive pipeline war against B.C.
Alberta’s latest idiotic attempt to punish B.C. for its resistance to the TMX is about to take an unexpected turn.
One that is funnier than a Jason Kenney laughing bag and guaranteed to drive his divisive United Conservatives, Notley’s deep-oil socialist state, and Kinder Morgan’s shareholders all certifiably nuts.
Today, in Alberta’s Court of Queen’s Bench, British Columbia attorney general David Eby filed his statement of claim to challenge the Notley government’s hilariously titled new Preserving Canada’s Economic Prosperity Act.
He might also apply for an injunction, to prevent Alberta from using that deeply cracked legal hammer to turn off the oil taps on B.C., in hope of sending British Columbians’ gas prices skyrocketing.
And guess who will soon be obliged to stand shoulder-to-shoulder in support of B.C. in that fight to have Alberta’s new law declared unconstitutional?
No, not Kinder Morgan, whose shareholders are probably already apoplectic about Alberta’s clumsy ploy to hurt B.C. with a regime that would also instantly cripple the value of the existing Trans Mountain pipeline. A regime that would fundamentally redefine who decides what goes in that pipeline and that would immediately destroy investor confidence in Canada’s utility company regulatory mechanisms, as it also throws every oil shipper’s contracts out the window.
No, it will not be Alberta’s oil producers and shareholders who will be forced to go court to stand with B.C., even if they will all be inevitably obliged to sue Alberta for relief from that law that stands to cost them all a bundle.
Alberta is in for a whole world of hurt that not many people are yet talking about, as it actually tries to use its new law to preclude its own oil producers from exporting their products to their contracted or would-be customers in B.C., Washington, California, or elsewhere.
It won’t be the five Washington refineries that depend on the Albertan crude shipped through B.C. for a good chunk of their feedstock that will be obliged to challenge Alberta’s new law in court.
Although you can bet that if Bill 12 was ever acted upon, all of those companies would have instant grounds to sue both Alberta and the federal government for breaches of trade laws and contracts that could cost taxpayers billions.
It wouldn’t be long before Donald Trump got in on the act, threatening to punish Canada in the NAFTA negotiations for launching an unprovoked energy embargo on U.S. customers that stupidly figured they could trust their next-door neighbour to honour its export commitments.
So, then, who could it be that B.C. premier John Horgan has cleverly positioned as his unwilling ally-in-waiting in his fight against Alberta’s Putinesque attempt to terrorize its cofounder in the suddenly ludicrous New West Partnership?
Why, it will be none other than the Trudeau government that will soon stand with B.C. as an intervenor in trying to strike down Alberta’s new trade terrorism act, that’s who.
For largely the same reasons as it is already planning to oppose B.C.’s proposed law to regulate the increased transportation of diluted bitumen, via the reference case now before the B.C. Court of Appeal. Which Trudeau refused to expedite by accepting B.C.’s offer to take it straight to the Supreme Court of Canada.
Because there is simply no way that Ottawa can sit by and allow either Alberta or B.C. to effectively supersede its exclusive constitutional authority for regulating interprovincial oil or other exports.
Because there is no way that the Trudeau government could ever tacitly allow Alberta to legally weaponize its oil exports against one province, any more than it can allow B.C. to restrict the shipments of that filthy goop through its territory under the guise of a similar provincial permitting regime over oil imports.
To turn a blind eye to Alberta’s gamesmanship in this instance would be to accept a precedent that could be equally applied at some future date to hold central Canada hostage to an oil embargo.
All provinces have a stake in preventing that from happening, with the possible exception of the dim-witted Saskatchewan government that hopes to afford itself that same legal power.
It would be the height of irresponsibility for Trudeau to sit on his hands and hope for the best from the many provinces that are likely to join with B.C. in beating back Alberta’s Bill 12.
Because if Alberta’s tactic did somehow miraculously prevail in court, it would be deployed by others, just as B.C.’s proposed regulatory scheme would be, to newly frustrate so many federal objectives on trade issues that they have until now been virtually helpless to impact.
Such a delicious irony.
Pierre Trudeau ensured no discriminatory treatment on exports
It was Justin Trudeau’s much smarter father who so many decades ago stupidly created Canada’s first oil-trade crisis, by dint of his government’s ill-conceived National Energy Program.
As we all know, Alberta’s then-premier Peter Lougheed responded with an oil embargo that targeted Ontario and Quebec, and brought Trudeau to heel.
Yet that kerfuffle ultimately served to strengthen federal authority, not weaken it.
It resulted in a new section being added to the Canadian constitution that expressly says any such laws regulating provincial exports of its nonrenewable resources and electricity “may not authorize or provide for discrimination in prices or in supplies exported to another part of Canada”.
And further, it says that where any such provincial export-law conflicts with the federal government’s exclusive constitutional authority in that respect, the “law of Parliament prevails to the extent of the conflict”.
As I have previously written, Alberta’s Bill 12 clearly violates section 92(a) of the constitution, a fact that Canada’s current prime minister can ill afford to ignore when the legal fight starts for real in court this week.
Ottawa will have no choice but to defend its jurisdiction and all of Canada from Alberta’s flagrant contempt for that constitutional provision in its partisan political war against British Columbia.
If Trudeau and Notley are tentative frenemies now, just watch how those friends fall out when Trudeau dons the black hat in the provincial stampede to throw Alberta off its game.
While federal finance minister Bill Morneau huddles with Kinder Morgan, trying to out-bluff that company he hopes to subsidize with his open cheque book—not to mention with his empty threats to sell its pipeline to some other nonexistent bidder—Eby will be forcing Trudeau’s legal hand.
In the end, Ottawa will be forced to intervene on behalf of B.C.’s selective support for unfettered trade that respects the constitution and the federal government’s exclusive authority over interprovincial pipelines, railways, and exports.
It is not a welcome prospect for a federal government that has been working so hard at painting B.C. as the scapegoat for killing a pipeline project that is destined to die a well-deserved political and economic death. Mostly, because of Trudeau’s inept and duplicitous leadership on the issue.
As Alberta’s insufferable United Conservative leader and puffed-up premier-in-waiting, Jason Kenney, recently said, Trudeau “doesn’t have a clue what he’s doing. This guy is an empty trust-fund millionaire who has the political depth of a finger bowl … He can’t read a briefing note longer than a cocktail napkin, O.K.”
True or not as that damning assessment of Trudeau might be, his lawyers and legal advisers will not allow him to sit this case out, or for that matter, lose in court.
Obviously, I am certainly not a constitutional expert or a lawyer; but you don’t have to be either to pretty much know how this thing is going to pan out for B.C. and Alberta in pressing their cases.
Both are going to lose, but in doing so, only B.C. will win, for its victory is assured in simply trying.
Indigenous challenges should succeed
To be clear, I am not talking about the consolidated legal challenges to the NEB process now before the Federal Court of Appeal. Nor am I referring to the other constitutional challenges that have been or might yet be filed by aggrieved parties in fighting the TMX per se, First Nations especially.
Indeed, I expect that Ottawa will be in for a very rude awakening when those courts rule on the key questions relating to Aboriginal rights and title, specifically in regards to the legitimacy and adequacy of the federal government’s consultation and accommodation efforts. The Trudeau government will go down hard on that account, if there’s any justice in this world.
It is those legal challenges and the hard realities of changing economics that really most seriously threaten to rock Trudeau’s world on TMX. He can never fully indemnify Kinder Morgan from this uncertainty that he created—or from the political protests that are actually impeding construction and creating tangible project delays and investor uncertainty.
In any case, it seems impossible to quantify the political uncertainty and delay that Trudeau, Morneau, and Kinder Morgan have laid at Horgan’s feet, least of all when his B.C. government has done absolutely nothing to frustrate or delay the project’s permit approvals, about half of which the company has not even yet sought.
Count me among those who predict that B.C. will easily lose its constitutional reference case, just as it will succeed in killing Alberta’s clearly unconstitutional new oil-export-permitting regime.
The critical difference is that the Horgan government is asking the courts for legal direction before it passes its proposed legislation to assert its provincial jurisdiction in regulating the transportation of one hazardous substance—heavy oil—to protect its coast from diluted bitumen spills.
Whereas the Notley government went ahead and passed a law to essentially empower it to willfully violate section 92 (a) of the constitution by regulating oil exports, which it has said it intends to use to expressly hurt one province. But if that bill is allowed to stand, it will be Ottawa that suffers the most brutal collateral damage, designed as it also is as a frontal assault on federal authority, ironically, because Ottawa has been too chicken to exert its full powers. Thank God.
In typical Alberta fashion, it shot first without aiming, and clearly hit itself in the foot, whereas B.C. only asked permission from the courts to legislate as constitutionally permissible in relation to its real target.
For B.C., unlike Alberta, it is the legal testing of its intent that is itself guaranteed to hit its mark, win or lose at the bar. Because as in Hamlet, the play’s the thing wherein Horgan will catch the ire, if not the conscience, of the king whose name is Big Oil.
And so, the federal government will soon find itself fighting both provinces in court—in effect, arguing against its own vilification of B.C. in opposing Alberta’s Bill 12—to achieve essentially the same legal ends in both instances.
It will succeed in proving that in “pith and substance”, the real intent of both jurisdictions’ enacted or proposed regulatory regimes is to override federal constitutional authority, albeit for opposite purposes.
Despite its protestations to the contrary, the point of B.C.’s proposed law to restrict and regulate the incremental flow of heavy oil transported within its borders is at least as much to frustrate and ultimately stop the TMX as it is to protect B.C. from heavy oil spills.
Any hope of convincing the court otherwise was severely undermined by the proposed law’s singular focus on diluted bitumen as the only hazardous substance that it would regulate. And only then, for incremental shipments of that product.
The draft law would have been more convincing in its legitimacy of purpose if it had also captured other hazardous substances and if it had been extended to regulate the flow of all heavy oil, not just increased volumes that are mostly related to the TMX project.
It would have been much more effective if it had deliberately sought to transcend the issues of interjurisdictional immunity that are invited by its limited focus. The bill should have been crafted to also explicitly serve the purpose of fostering reconciliation and newly honouring the Crown’s constitutional, fiduciary obligations to protect Aboriginal rights and title, with a new co-management regime that would have been very tough for Ottawa to assail.
Underlying that reference is the NDP’s election commitment to “use every tool in its toolbox” to stop the Kinder Morgan project. That is the inescapable political context within which that proposed regime has been crafted, as the courts will surely find in their own sweet time, to deal a fatal blow to B.C.’s proposed regime.
And that is sufficient to serve B.C.’s purpose.
Meanwhile, Alberta aims to push that pipeline project forward by creating political pressure through the threat or reality of an oil embargo executed against one province, under a new permitting regime that it purports to have authorized under Bill 12.
Its true intent is not to frustrate the federal government’s purpose on the TMX, but rather, to annihilate its exclusive jurisdiction over interprovincial trade and exports.
Both jurisdictions are hoping to exert their authority to essentially trump federal authority in ways that will clearly conflict with numerous federal statutes. Which, in any case, will be explicitly retrumped by the Trudeau government’s forthcoming law to assert its paramountcy, leaving no wiggle room for the courts to reward either province with new constitutional authority.
Liberals refuse to legislate—so far
For the purposes of this article, I’ll spare the long legal analysis, quoting chapter and verse from the countless constitutional cases that have already so clearly spelled out the provinces’ losing hand in respect of the doctrines of pith and substance, interjurisdictional immunity, and paramountcy that will be central to both cases.
Suffice it to say, the legal deck is supremely stacked in Ottawa’s favour, a reality that Trudeau can even more clearly consolidate, if and when he gets around to effectively outlawing both B.C.’s and Alberta’s imagined new powers, by a simple act of Parliament.
Why has Trudeau waited so long to table his promised legislation to render B.C. wholly impotent in its weakly positioned regulatory proposal to effectively have its way in delaying the TMX to death through its legal manoeuvres?
Why has he not yet already introduced and passed that new federal law, which Alberta’s tarsands hawks so desperately want to force B.C. to stand down?
Could it be it is because that act will also necessarily put the Trudeau government in direct conflict with Alberta’s threatened measures to make B.C. surrender to Kinder Morgan, which until last week, were not codified in law?
Could it be that it hoped to also pressure B.C. by effectively backstopping Alberta’s threat, never whispering a word against that unconstitutional action, or stopping to question the economic effect of the incalculable damage its threatened law would wish upon Canada, if it were ever passed and proclaimed?
Or could it be that the feds have just been too scared to do what they have threatened, knowing that it will be sure to enrage Quebec and other provinces, all the while secretly hoping that Kinder Morgan would indeed call it quits, with all and sundry blaming B.C.?
The delicious irony is this: if and when Kinder Morgan walks away from its misguided project, as it probably will, Alberta’s law has now been passed and can’t be ignored.
With or without TMX, Bill 12 will have to be challenged to strike it dead.
And with or without TMX, B.C. will be aided in that endeavour by the guy whose government effectively brought Bill 12 to life.
It was the Trudeau government—not the Horgan administration—that inadvertently gave birth to that bill through its mind-boggling blundering, shortsighted boosterism, and potentially illegal actions in approving that pipeline as it did.
A pipeline project, it must be noted, that likely cannot be simply “transferred” with Trudeau’s taxpayer-backed indemnity to any new owner, even if there was one stupid enough to risk wanting to undertake that tarred white elephant.
Indigenous peoples would have much to say about that eventuality as well in court, if it should ever come to pass, arguing as they will that any change in ownership will necessarily trigger new obligations in respect of Aboriginal consultation and accommodation.
In any case, however those two provincial court challenges evolve over the weeks, months, and maybe even years ahead, the TMX debacle is bound to exact a much worse political toll on Justin Trudeau and Rachel Notley than it will on John Horgan.
See you in court, they’ll all say. But only Trudeau will be fighting the provincial partner he brought to his climate dance, much to Jason Kenney’s glee.
And only Horgan stands to win by losing his own case, as his attorney general also destroys his “old friend” in court, in forever outlawing Alberta’s legal capacity to blackmail other provinces’ by weaponizing its oil exports as Lougheed did and as Notley hopes to do.More