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politics

In Canada, pipeline politics make for strange alliances

Alberta's rebuke of stall tactics by fellow NDPers in B.C. finds an empathetic ear from conservatives in Saskatchewan

Alberta Premier Rachel Notley is pictured in Edmonton in December, 2017.

Alberta's left-leaning government has a new ally: Saskatchewan's right-leaning government.

And the partnership is growing warmer thanks to the public detonation of the relationship between the NDP governments of Alberta and British Columbia.

The sharp shift in Western Canadian politics played out this week after B.C. proposed environmental regulations that would effectively block Kinder Morgan Canada Ltd.'s Trans Mountain oil pipeline expansion project to the West Coast. Premier Rachel Notley's tone with B.C. hardened.

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In the past, Ms. Notley has talked about how Trans Mountain negotiations must be "thoughtful and constructive conversations" and recognize "mutual benefits."

On Wednesday, she threatened a trade war. On Thursday, she pulled out of negotiations with B.C. over purchasing electricity. Saskatchewan, which has been hostile to Ms. Notley, publicly supported her government.

Ms. Notley's sharp rebuke of B.C. Premier John Horgan reflects a practical reality: Her economic blueprint – and by extension, her hopes for re-election – bank heavily on tapping new markets for the province's landlocked oil. Her political realignment has consequences for the federal government. Ms. Notley demanded that Prime Minister Justin Trudeau – who has supported Alberta's push for Trans Mountain as she aligned herself with his environmental policies – assert more power over British Columbia. Ms. Notley said she told Mr. Trudeau the fight over Trans Mountain is not one between B.C. and Alberta, but between B.C. and Canada.

Ms. Notley was counting on the Trans Mountain pipeline to help Alberta’s economy, but B.C. Premier John Horgan has thrown a wrench into those plans.

B.C. proposed this week to halt any increase to diluted bitumen transport while a scientific panel studies whether the heavy oil can be effectively cleaned up after spills into water bodies. But Ms. Notley interprets B.C.'s proposal as an attempt to regulate what type of crude can go into a pipeline and, as a result, Canada's westernmost province has crossed a legal line. Mr. Trudeau must more forcefully intervene, she said.

"It is the equivalent of B.C. driving into the middle of a federal cabinet meeting and asserting its right to amend the Criminal Code," Ms. Notley told reporters at a press conference in Edmonton on Thursday. "There is a real law – it is called the Constitution – and that is something that governs a real country that is Canada."

She said she spoke with Mr. Trudeau on the phone for half an hour Thursday. He was in Edmonton that day and told a local radio station the pipeline would be built.

Greg Poelzer, a professor at the University of Saskatchewan's school of environment and sustainability, said Ms. Notley had no choice but to change her tactics.

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"Her approach, generally, tends to [be that] a teaspoon of honey will get you further than a gallon of vinegar," Dr. Poelzer said. "But when the other side won't take the honey, she's not afraid to use the vinegar. And that's what we're seeing."

As the relationship between the New Democrats in B.C. and Alberta soured, the ties between Ms. Notley and the Saskatchewan government immediately improved. Scott Moe won the Saskatchewan Party's leadership race last week, and the province's new Premier is publicly backing Ms. Notley.

Ms. Notley gives opening remarks at an emergency cabinet meeting in Edmonton on Jan. 31., 2018.

"The B.C. NDP are playing politics at the risk of thousands of Canadian jobs, future infrastructure projects as well as investor confidence in our energy industry," Mr. Moe said in a statement on Facebook. "We will support the government of Alberta in any actions against this political decision."

Mr. Moe's response breaks with his predecessor's habit of bashing Ms. Notley and questioning the Alberta government's commitment to the energy industry.

"[Mr. Moe] is a very conciliatory fellow by nature," Dr. Poelzer said. "His first instinct is to understand, to listen, and find common ground."

The pair will still clash, but Saskatchewan may be more willing to stand in solidarity with Alberta when their economic interests align, Dr. Poelzer said.

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"It has the potential to get better integration of our national policy on energy, because the two most important provinces in terms of energy production are Alberta and Saskatchewan," he said. "This is probably a very positive development over all for those two provinces and for Canada."

Alberta's finances still depend on the energy industry despite the provincial government's attempt to diversify the economy. This week's political complexities will likely further delay the $7.4-billion project and further dampen Ms. Notley's electoral fortunes. Alberta's NDP expects to run a deficit that exceeds $10-billion this fiscal year. The government, when it released its 2017-18 budget last March, said it would balance the books by 2023-2024. That calculation depended on Trans Mountain's expansion project operating by 2021, but the pipeline is now a year behind schedule – and that does not account for how B.C.'s latest environmental proposal may affect the timeline. (Alberta's budget also counted on Enbridge Inc.'s Line 3 replacement operating by 2020. That, too, is now delayed).

Mr. Horgan is seen at a news conference in Victoria in December, 2017.

B.C. has a history of trying to block energy infrastructure. Former Liberal premier Christy Clark signed off on Trans Mountain only after the company met five provincial conditions and agreed to pay $1-billion over 20 years to the province. Under this week's draft proposal, increased shipments of diluted bitumen would be prohibited until a newly appointed advisory panel reports on whether the extra-thick crude can be effectively cleaned up after a spill in water. B.C.'s NDP minority government is supported by the Green Party.

B.C. Environment Minister George Heyman said the province would be guided by the panel's work. B.C., he said, is acting under the auspices of its Environmental Management Act and that any changes could take more than a year to implement after consultations with First Nations and other stakeholders. But the regulation would be vulnerable to court challenges, said Alan Ross, regional managing partner at Borden Ladner Gervais LLP.

"I think it will be hard for this to stop the project," he said in an interview. "If these rules are put in to effect and applied, we will see some applications in court on a jurisdictional and constitutional basis."

And that circles back to the dynamic between the Prime Minister and the first ministers in Western Canada. Mr. Trudeau's Liberal Party will suffer in B.C. if he forces Trans Mountain forward, but Ms. Notley's support for his environmental policies should translate into political capital. Canada cannot fulfill its international climate agreements unless Alberta is onside, Melanee Thomas, a professor in the department of political science at the University of Calgary, said.

"Alberta can say [to the federal government]: 'We're doing our part … It is a big part. You need us to do this part. So, what are you going to do to back us now?'" Dr. Thomas said. "This is an instance of a federal government that would be more willing to stick out its neck for Alberta precisely because it needs Alberta."

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