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northern gateway

British Columbia Premier Christy Clark during a news conference in Vancouver September 24, 2012 following the resignation of her chief of staff.John Lehmann/The Globe and Mail

Any move by Ottawa to green-light the Northern Gateway pipeline over British Columbia's objections would ignite a national political crisis, says Premier Christy Clark.

Putting its foot down on a provincial matter would fan the flames on both sides of the debate and run afoul of political reality: the pipeline will only get built if it has the "social licence" to proceed, Ms. Clark said.

She made the comments in a wide-ranging interview with The Globe and Mail, in which she softened some of her recent anti-pipeline rhetoric while signalling a willingness to abandon efforts to get any share of Alberta's royalties from the project.

She invited Alberta Premier Alison Redford and Prime Minister Stephen Harper to get together to address B.C.'s concerns, notably the need to derive greater economic benefits from Gateway.

With just less than seven months to go before the next provincial election, Ms. Clark is desperate to latch on to an issue that will help reverse her party's dismal standing in the polls. The Liberal Leader undoubtedly hopes that the firm stand she has taken on Gateway recently will resonate with a B.C. public that has reservations about the project.

The Premier said that if Ottawa wants to play hardball, it could use the federal power of disallowance to override provincial opposition. In theory, disallowance gives the federal government the power to unilaterally revoke provincial statutes. However, it has not been used since 1943.

"Ted Morton [former Alberta energy minister] has talked about this," Ms. Clark said. "The reason [disallowance] is so rarely used is because citizens and provinces will no longer tolerate that kind of intrusion into provincial decisions. The thing is, this project can only go ahead if it has the social licence to do so.

"It can only get the social licence from the citizens of British Columbia. And that's what I'm representing as Premier."

The federal government has indicated a need for Canada to diversivy its energy customer base and that Asia represents a lucrative opportunity to do just that. Ms. Clark said even if the federal government believes the pipeline to be in the national interest, she can't see Ottawa using its powers to push it through.

"I don't see any appetite for it," the Premier said. "Heaven forbid, it would be a national political crisis. Whether or not people supported the pipeline, they would band together to fight the federal government if they decided to intrude into British Columbia without our consent."

The Premier's stand on the project has increasingly put her at odds with Ottawa and Ms. Redford. The B.C. government has laid out five conditions that must be met in order for the pipeline to go ahead. Those demands include provisions around the environment, first nations involvement and money.

Contrary to most of her recent public statements, which have highlighted the project's risks and downside for B.C., Ms. Clark said she believes heavy oil can be transported to the West Coast securely if proper safeguards are in place.

"There's a small amount of heavy oil that moves through the province now and out of Vancouver harbour," the Premier said. "So this is happening now. We do it safely now. If we expand the volume dramatically of this very difficult product, we have to have the proper safeguards in place.

"I'm not taking the position that it can never happen because it's happening now. I believe it's possible it can happen safely if we can figure out a way to make sure it happens safely and that means beefing up our Coast Guard response in a very big way."

The Premier also said she accepts Alberta will never share its oil royalties and that's okay – as long as B.C. receives a greater share of the project's economic potential from somewhere.

"I think our position has been mischaracterized," the Premier said. "There's a whole lot of revenue on the table. We need to talk about how it will be split up. I'm not saying that's royalties – I'm not."

The B.C. and Alberta premiers recently held an unproductive 15-minute meeting in Calgary on the pipeline that both later characterized as "frosty." When it was over, Premier Redford indicated that Ms. Clark had not taken royalties off the table. The B.C. Premier said while it may be true, she indicated to the Alberta Premier they don't have to be in play as long as alternatives sources of revenue can be identified.

In Alberta, Ms. Clark indicated that it was up to Ms. Redford and Enbridge to come up with solutions to solve the impasse. However, she said during the Globe interview that she's willing to sit down with the Alberta Premier and the Prime Minister to begin exploring answers.

"Let's negotiate," the Premier said. "Let's look at the range of benefits that are there and talk about it. If it doesn't come out of royalties, we're perfectly comfortable with that."

Prime Minister Harper has indicated he has no interest in involving himself in the pipeline dispute until after the federal environmental review process is complete. That's expected to be sometime in the new year.

Ms. Clark said that the reason she has not articulated what she considers to be a "fair share" of any benefits is because no one is yet certain what they are. Various reports have set out different scenarios, she said. That is why it is important for Ottawa, B.C. and Alberta to agree on what the total benefits will be and how B.C. can derive more of them.

"People have mentioned that we might be able to institute an export tax that would be levied at the port," Ms. Clark said. "But some people say it wouldn't be legal given our international trade obligations. So there are different suggestions out there. We as governments need to sit down and figure out which ones are going to work."

The Premier said some of the economic calculations that have been made public don't make any sense to her. For instance, she said Enbridge's own analysis indicates B.C. would receive about 8 per cent of the benefits from the pipeline, while Saskatchewan would get about half of that.

"Really? So Saskatchewan would get about half of the benefits B.C. would get for taking zero risk and B.C. would get 8 per cent of the benefits for taking 100 per cent of the risk. Really?" Ms. Clark said.

The Premier dismissed suggestions that her hard line on Gateway has significantly damaged relations between B.C. and Alberta. Ms. Clark said she and Ms. Redford have a "friendly relationship" but have "one big thing we disagree on and we really disagree on it."

The B.C. Premier called it a "bump in the road" and said it is not unusual for provinces to disagree on matters.

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