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B.C. prepares court challenge as Alberta threatens to cut off oil shipments

A new law allowing Alberta to choke off the supply of fossil fuels to British Columbia will be challenged in the courts by next week, B.C. Attorney General David Eby said Thursday.

Mr. Eby said the legislation, which is designed to inflict economic pain on B.C. over the Kinder Morgan pipeline dispute, is unconstitutional. The bill passed in Alberta’s legislature Wednesday evening.

“We are disappointed that the government of Alberta has rejected our proposal to refer their legislation to the courts,” he said. “We will now move forward and challenge the constitutional validity of Bill 12 in the Court of Queen’s Bench of Alberta by next week.”

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B.C. is already fighting the expansion of the Trans Mountain oil pipeline in the federal Court of Appeal and in B.C. Supreme Court. As well, it has referred its own proposed legislation to cap oil shipments across the province to the B.C. Court of Appeal for a constitutional reference.

Earlier this week, B.C. proposed that Alberta refer its Preserving Canada’s Economic Prosperity Act to the courts to determine if it respects jurisdictional powers under the Canadian constitution.

The law gives Alberta’s Energy Minister Margaret McCuaig-Boyd the power to require that companies exporting energy products from Alberta get a licence – including for products such as crude oil and refined fuels such as gasoline, diesel and jet fuel − that previously was not needed. Those licences could then be restricted to reduce the amount of fuel being exported.

Kathleen Ganley, Alberta’s Minister of Justice, told Mr. Eby in a letter Thursday that she sees no need to seek the courts’ blessing for this latest measure in the trade war between the provinces.

“Our legislation has been carefully considered and we do not need to refer it to our courts,” she wrote.

“Given B.C.’s transparent attempt to sow legal confusion by claiming constitutional authority it does not have in order to harass the pipeline investors into abandoning the project, the government of Alberta has a responsibility to its citizens to protect the interests of its citizens.”

She went on to argue that Alberta’s new law and the B.C. government’s proposed legislation now before the courts are entirely different – even though both aim to control the flow of oil across the B.C.-Alberta boundary.

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“Banning imports is a fundamentally different action than controlling the export of our own resources and thus falls under two different constitutional authorities.”

Mr. Eby agreed the intent of each province is different. However, he characterized B.C.’s proposed law as one that aims to regulate hazardous substances through the province – something he argues is well within the province’s jurisdiction. But he said Alberta’s law is clearly billed as a device to restrict resources to B.C. with the intent of causing harm. It is expected that the price of gas at the pump will soar if Alberta throttles back on the supply of fuel to B.C.

“I am confident that the Constitution of Canada prevents any province from attempting to resolve a legal dispute by inflicting economic harm through trade sanctions,” he wrote in his letter to Ms. Ganley this week.

According to industry statistics, up to 100,000 barrels per day of refined products including gasoline, diesel and jet fuel flow from Alberta to B.C. every day – by pipeline, rail and truck – making up 50 to 60 per cent of B.C.’s total refined fuel consumption.

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