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Alberta Premier Alison Redford makes her way to her seat before the Speech from the Throne at the Alberta Legislature in Edmonton on Feb. 7, 2012.

Jason Franson/The Canadian Press

The Alberta government is looking to clear a path for the oil sands through British Columbia by upping the economic benefits for its western neighbour – including the option of paying to modernize and expand West Coast ports.

Premier Alison Redford's government stressed Tuesday there were no formal discussions, much less a formal proposal, but some in the Alberta government acknowledge that British Columbians need to see a tangible benefit if they are to bear the risks of an oil pipeline and associated West Coast tanker traffic headed to Asia.

However, there is friction within Ms. Redford's government about how far it should go to address B.C.'s concerns, and political worries about any move that could be perceived as handing over a share of Alberta's energy royalties.

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Under one proposal being discussed, Alberta could team up with Ottawa to support a broader western industrial corridor project. Money devoted to that project could go to building up West Coast port infrastructure, or to support northern British Columbia communities along the way. Such an industrial corridor would do more than transport energy – it would also be used for moving other products, such as potash.

In a January meeting, B.C. Premier Christy Clark bluntly told Ms. Redford that public opinion is against the pipeline in British Columbia – Alberta gets the benefits while B.C. carries the risks of environmental disaster, according to senior officials in B.C.

Alberta Energy Minister Ted Morton brought the debate into the open when he told The Globe and Mail editorial board on Monday that, to get British Columbians to support the proposed pipeline, there will have to be clearer benefits to that province.

Sources in the Redford government said Tuesday there is little appetite to provide support tied to any specific project, such as Enbridge's Northern Gateway pipeline. But in internal discussions, the province has looked at ways it could compensate British Columbia for the perceived risk from a new pipeline and tanker traffic.

Ms. Clark is seeking to brand her province as Canada's gateway to Asia, but she has refused to take a stand on the Gateway project, which would nevertheless be a major development in her "Canada Starts Here" initiative.

The B.C. Premier is caught between widespread environmental and first nations opposition, and her desire to court federal Conservatives. With the B.C. election slated for May, 2013 – just months before a federal environmental panel is expected to deliver a decision on the pipeline – Ms. Clark faces a tough campaign where she could be vulnerable on both sides of the debate.

Ms. Redford, too, faces opposition to any deal to share in her province's energy wealth, with her chief opponent, Wildrose Party Leader Danielle Smith, saying Alberta should not be "held at ransom."

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Ms. Redford said Tuesday more needs to be done to show British Columbians how they will benefit from the pipeline, but stopped short of any specifics. "I've been a really strong proponent of a Canadian energy strategy, and what that means to me is we need to talk about what the benefits are to provinces across the country – with respect to Gateway, with respect to oil-sands development, and with respect to other energy projects."

Alberta Finance Minister Ron Liepert said in an interview Tuesday that the cabinet is still debating the matter. "Is there some way that British Columbia could benefit more than other provinces in Canada because of the impact [the pipeline development]has on that province?" He added: "We're looking at all of the strategies, and the barriers to attaining full potential for Alberta."

Senior B.C. government officials said Tuesday that the Clark government has no desire to launch into negotiations. "If we get to a point where there is a viable project, absolutely the Premier will want to maximize benefits for the province." But first the pipeline hearings have to address the "legitimate" concerns about the environment.

A federal source said Ottawa is aware of Alberta's desire for federal participation in any efforts to provide benefits to B.C., but there has been no discussion internally of participating with the oil-rich province.

"It's early days in the Gateway process yet," he noted. The regulatory hearings began last month, and the panel is not due to report until the middle of 2013.



With a report from Shawn McCarthy in Ottawa and Carrie Tait in Calgary

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