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A worker uses heavy equipment to move a wood platform as work continues at Kinder Morgan's facility in preparation for the expansion of the Trans Mountain Pipeline, in Burnaby, B.C., on April 9, 2018.DARRYL DYCK/The Canadian Press

The B.C. NDP government, already in the crosshairs of the federal and Alberta governments over its fight against the Trans Mountain pipeline expansion, saw the end of its honeymoon with the business community on Monday.

Business leaders, who have been carefully muted about the new government since Premier John Horgan took power last July, launched a string of sharp attacks over the decision by Kinder Morgan Inc. to suspend “non-essential” spending on the project due to opposition from the British Columbia government.

Both Ottawa and Alberta immediately turned up the heat, calling on Mr. Horgan to abandon his commitment to oppose the project, and promising to respond with financial, legal and regulatory retaliation.

The Horgan government has sought to insulate the province’s investment climate by forging ahead with construction of the Site C dam, and by embracing efforts of the previous government to court investment in the liquefied natural gas sector.

“This is one project in a sea of investment. We’ve had robust growth,” Mr. Horgan said Monday.

His government has maintained the province’s triple-A credit rating and landed some positive investment news such as the promise last November that the tech giant Amazon will open a corporate office in Vancouver.

But Kinder Morgan’s threat to abandon its $7.4-billion Trans Mountain pipeline expansion project if the B.C. government won’t stand down by the end of May has undone much of that goodwill.

“There is a real crisis in confidence in B.C. − and in Canada,” warned Greg D’Avignon, president and CEO of the Business Council of B.C., in an interview Monday.

“This is a national issue. We can’t rely on the regulatory process, the rule of law, with any degree of confidence. I think the federation is at risk and it’s corrosive.”

Alberta Premier Rachel Notley’s government made clear Monday it wants British Columbia to feel economic pressure − and even economic pain − for its stance on the pipeline expansion project. In Question Period, Ms. Notley disclosed she has asked Ottawa to withhold funding that would flow to B.C. under the Pan-Canadian Framework on Clean Growth and Climate Change.

“We’ve already made that request to the federal government, and I believe that it is under consideration,” Ms. Notley said, under needling from Alberta United Conservative Party Leader Jason Kenney.

Mr. Kenney has repeatedly argued that if the federal government plans to withhold money from a $1.4-billion clean energy fund from Saskatchewan (for its non-participation in the national carbon pricing plan) it can just as easily withhold that money from B.C. He pointed out Monday that Ottawa recently pledged $4.1-billion to British Columbia for transit, green infrastructure and other projects, and said the federal government should suspend the transfers “unless and until B.C. actually respects the rule of law and our Constitution.”

Alberta’s NDP government will also give notice this week to introduce a bill that will outline the legal powers needed to throttle back its energy shipments to B.C. Ms. Notley said the legislation will only be used if necessary.

“If the national interest is given over to the extremes on the left and right, and if the voices of the moderate majority of Canadians are forgotten,” Ms. Notley said, “the reverberations of that will tear at the fabric of Confederation for many, many years to come.”

Mr. Horgan told the B.C. Legislature on Monday that Canada’s confederation is not threatened by his government’s bid to challenge the project in court. “The federation is strong,” he said during Question Period.

The B.C. Premier said his government has continued to issue permits for the project without undue delays, and has been up front since the last election that it would use whatever legal tools available to stop the expansion. He reiterated B.C.’s position that the courts are the appropriate venue to address the province’s concerns that the project poses unacceptable risks to the environment.

But the BC Chamber of Commerce’s Val Litwin said the Horgan government is giving Canada a black eye by seeking to block the pipeline project. “Make no mistake, if this pipeline can’t move forward, it will have broad implications for resource development in B.C. and Canada,” he said in a statement.

The Greater Vancouver Board of Trade called on the B.C. government to immediately end its tactics “to endanger, delay or block the project.” The board’s president and CEO, Iain Black, said the B.C. government has created an impasse that “is now challenging − in the full view of the international investment community the very ability of our country to govern itself.”

Justin Trudeau says the federal government remains “determined” to see the Trans Mountain pipeline expansion built after Kinder Morgan hit pause on the project, but the Prime Minister wouldn’t say what Ottawa’s next steps would be.

The Canadian Press