Ottawa is preparing to counter British Columbia’s bid to control the flow of oil through the province with legislation that will enhance federal power to push through the Trans Mountain pipeline. The move comes as Kinder Morgan says the fight has caused “unquantifiable risk” to its project.
“We think that federal jurisdiction is clear; we’re looking at legislation to see how we can enhance that,” federal Natural Resources Minister Jim Carr said in an interview on Wednesday.
The provincial NDP government will ask the B.C. Court of Appeal by the end of the month to determine whether it has the authority to regulate the movement of diluted bitumen through its territory.
The case is expected to drag on well beyond the May 31 deadline Kinder Morgan has set for deciding whether to proceed with the pipeline expansion, which the Trudeau government has ruled to be in the national interest.
Kinder Morgan stated on Wednesday that the Trans Mountain project “is now facing unquantifiable risk” because of B.C.’s position, and court challenges that have not yet been concluded.
In an effort to blunt the impact of B.C.’s reference to the courts, Ottawa is preparing legislation that would not only declare federal jurisdiction over the project, but give it added clout to enforce it. Mr. Carr said the government has not yet decided the exact nature of the legislation.
“We assert the federal jurisdiction that has been asserted by us before and it also has been commented upon by courts in Canada including the Supreme Court,” Mr. Carr said.
B.C. Premier John Horgan told reporters he will await details of the federal bill before responding, but warned that Ottawa is not picking a fight solely with his government.
“I know other provinces, particularly Quebec, will be acutely interested in the federal government trampling on provincial rights − while we are trying to establish those rights,” Mr. Horgan said in Victoria.
University of Saskatchewan law professor Dwight Newman said Ottawa has several options, but the strongest case would be to declare “paramountcy” over the project, which would allow it to override any provincial legislation that is inconsistent with Ottawa’s approval of it.
“If the federal government said they were going to completely regulate how this pipeline works, then if there is a conflict between the provincial and the federal law, the federal law has paramountcy.”
Bruce Ryder, a law professor at York University’s Osgoode Hall, said Ottawa can use the law to signal that it will not allow provinces or municipalities to frustrate the pipeline construction.
Mr. Ryder said B.C. could challenge the legislation in court, creating more uncertainty. He added, however, that solid case law backs federal authority.
“It won’t be popular in Quebec,” Mr. Ryder said. “It’s a rather heavy-handed assertion of the primacy of federal jurisdiction because it cuts against the idea of co-operative federalism and frustrates the expression of democracy at the provincial and municipal level.”
Environment Minister George Heyman said B.C.’s constitutional reference case will be filed by April 30, and his government will pursue it regardless of the ruling in a Federal Court of Appeal lawsuit expected in the coming weeks.
Mr. Heyman said the province wants to know whether it can regulate the flow of oil whatever Kinder Morgan decides to do.
“This process is about B.C.’s right under the constitution to regulate against the deleterious impacts on the environment, on the economy, on provincial interests of a project, whether it is an interprovincial project, or a provincial project,” he told reporters on Wednesday.
The case will head to B.C.’s Court of Appeal, the highest option available to a provincial government. A ruling could be challenged at the Supreme Court of Canada. Ottawa can file such a case directly to the Supreme Court.
Mr. Heyman declined to reveal details of what the government will ask the court.
B.C. Attorney-General David Eby would not speculate on how long the reference case will take. The province will notify Ottawa to give the federal government and other provinces the opportunity to apply for standing in the case. First Nations, industry and others may also intervene. Then court will set dates for hearings. “It’s up to the court when the matter is heard and how long it takes them to determine the question,” Mr. Eby said.
Alberta Energy Minister Margaret McCuaig-Boyd said she’s not surprised the British Columbia government continues to “play political games” and erode investor confidence in Canada.
“We are prepared to pull the rug out from under them,” she told reporters in Edmonton on Wednesday.
In explanation, Ms. McCuaig-Boyd said if Alberta and Ottawa decide to invest in the pipeline expansion project, they will be much more “determined and relentless” investors than Kinder Morgan is.
On Monday, Alberta introduced legislation that would give the province new powers to restrict fossil-fuel shipments outside the province, which could cause fuel prices to spike for B.C. consumers.
Prime Minister Justin Trudeau, who maintains the pipeline will be built, attempted to mediate the dispute on Sunday with Mr. Horgan and Alberta Premier Rachel Notley. But the meeting had no effect on either side’s position.
The reference case will be the latest court case involving the pipeline.
Last spring, more than a dozen cases challenging the federal government’s approval of the pipeline filed by First Nations, environmental groups and local governments were combined, with a trial in the Federal Court of Appeal held in October. B.C. and Alberta both joined as intervenors.