As Canada's premiers gather in Halifax, the quarrel between two Western leaders over the proposed Northern Gateway pipeline has reached a boiling point.
British Columbia Premier Christy Clark is threatening to block the controversial $6-billion project unless her province gets an unspecified "fair share" of the windfall, a cash call Alberta Premier Alison Redford is flatly rejecting.
The effect of the standoff, Ms. Clark said Tuesday in an interview, is straightforward: No money means no pipeline.
"If Alberta is not willing to even sit down and talk, then it stops here," she vowed.
The dispute casts a shadow over the Council of the Federation meetings in Halifax, where premiers are gathering to discuss health care, energy, immigration and other provincial issues. But energy, specifically the fissure between the two Western premiers over the Northern Gateway pipeline, is already overshadowing the other substantive issues on the agenda.
Other premiers were cautious about stepping into the fray.
In interviews on Tuesday, Saskatchewan Premier Brad Wall backed Ms. Redford, saying he too worries about the precedent, while Manitoba's Greg Selinger said the issue was never a major focus of this week's talks.
Ontario's Dalton McGuinty steered clear altogether. "I'm not getting in between. I'll tell you that right now," he said.
Ms. Clark's cabinet colleagues have threatened to drown the controversial Enbridge project in red tape, by refusing permits and not providing electricity, rather than assume environmental risk for little reward. "This project is good for Canada. It's great for Alberta and at the moment it's not very good for British Columbia," Ms. Clark said.
Ms. Redford will use the premiers' meeting to renew her pitch for a Canadian Energy Strategy, which she hopes would streamline major projects, such as the Northern Gateway pipeline, and avoid future dust-ups between provinces.
She views the matter as one of jurisdiction, saying provinces typically don't receive special considerations, such as a cut of royalties, for allowing a pipeline through. They usually see little more than a hiring spree during construction and a handful of jobs once it's built. Instead, provinces are meant to reap indirect benefits from a strong national economy, Ms. Redford argues.
"When we start looking at each particular commercial project from the perspective of what the economic benefit might be to the province, that means that every single time you have an economic project or commercial project, there has to be a renegotiation of the balance sheet. It's not how Canada has worked. It's not how Canada has succeeded. And I'm disappointed to hear that," Ms. Redford said Tuesday.
Underpinning the dispute is a ticking electoral clock in B.C., where voters will go to ballot boxes next year. Polls show NDP Leader Adrian Dix, who flatly opposes Northern Gateway, on track to oust Ms. Clark's Liberals and become premier. Ms. Redford, meanwhile, won an election this year but has nonetheless faced heat at home to become a more vocal champion of Alberta's oil patch.
The issue between the two erupted last Thursday, when Ms. Clark visited both Mr. Wall and Ms. Redford, a meeting Ms. Clark called "difficult." Mr. Wall says they discussed Northern Gateway; Ms. Redford says they focused on other subjects. Ms. Clark also called the Prime Minister. A day later, Alberta announced a pipeline review and Enbridge announced an additional $500-million in environmental spending on the project. Both those were used to fire back at Ms. Clark on Monday, with the premiers hitting the airwaves a day later.
Ms. Clark's staff cautioned late Tuesday that they never asked specifically for a cut of royalties – just generally more cash – while Ms. Redford has suggested they should explore local options to raise extra money. "If they decide to increase export taxes or something, that's up to them," she said.
Ottawa backs the project, which is currently under review by the National Energy Board, but avoided weighing into the premiers' dispute. Michelle Rempel, a Calgary MP who is the Parliamentary Secretary for the Minister of Environment, said only that Gateway strikes a good balance between economic growth and environmental responsibility and that the government would wait for an NEB decision.
She repeatedly avoided commenting on the premiers, but seemed to reject Ms. Clark's belief that B.C. isn't getting enough out of the deal. "The entire country benefits from our energy sector, that's abundantly clear," the Alberta MP said.
Enbridge considers the request for a "fair share" of revenue a "government-to-government issue," and says it's eager to discuss environmental plans and first nations engagement with Ms. Clark's government.
Ms. Clark, meanwhile, says she's looking out for her province, which is assuming much of the environmental risk and, according to one report it commissioned, receiving just 8 per cent of the tax revenue.
"I get it that this is a very easy calculation for Alberta. They get the vast majority of the benefits and take almost none of the risk. I get that," she said. "But it's a very different calculation in British Columbia where we're taking the vast majority of the risk and getting almost no benefits from it."
With a report from Karen Howlett in Toronto