British Columbia blinked.
It is the only way to interpret Thursday's news that the government is backpedalling on its earlier pronouncement it would regulate the flow of any additional bitumen going through pipelines in the province – a provocation that touched off a trade war with Alberta.
Now it will ask the courts to decide whether it has the jurisdictional authority to carry through on its edict – a question the courts will almost certainly answer with an emphatic no.
B.C. Premier John Horgan would not disclose the specifics of the question the government will ask the courts to answer. He said a team of lawyers will assemble to hammer out the precise language. Alberta is fine with this as long as the question is a straightforward one that focuses on dominion and whether B.C. can exert control over what goes through pipelines that traverse the province. That's because Premier Rachel Notley is confident of which way the courts will land on that matter, given that pipelines are constitutionally recognized as federal jurisdiction.
If the reference question is more nebulous and an obvious attempt to drag this process out further in the hopes Kinder Morgan simply gives up and abandons its plans, then Alberta will not be happy and almost certainly bring back a boycott of B.C. products. It dropped its embargo on B.C. wine in response to Mr. Horgan's announcement on Thursday.
But that boycott did enough damage on its own to wake Mr. Horgan up to the fact that his friend Ms. Notley was not fooling around on this file. And, unless he dropped his "needless threat," she would exact more pain on the B.C. economy. And for B.C., it wasn't worth it.
We don't know what pressures Ottawa was putting on the province to drop the demand, or make it go away by sending it to the courts. But we do know those pressures were real, and likely carried significant economic ramifications for the province. We also know the federal government wanted no part of the constitutional reference B.C. is seeking.
The entire issue had become a lose-lose for B.C., and this reality was beginning to dawn on the government. Increasingly, Mr. Horgan looked like the proverbial cat in a tree that's unsure how to get down. In this case, he and his environment minister created this imbroglio. Their dilemma became how to retreat without completely losing face.
Of course, the B.C. government will not agree with that assessment. Mr. Horgan refused to concede this was a retreat of any kind even though his government's pledge to restrict bitumen flows is now off the table until the courts rule on the matter.
"Not at all," the Premier said. "This is intended to have cooler heads prevail."
For her part, Ms. Notley declared victory, suggesting at a news conference that her B.C. counterpart backed down in the face of her economic retaliation. And she has every right to boast here. She caught Mr. Horgan completely off guard. The B.C. Premier did not see the wine boycott coming or anticipate the damage it would inflict on the industry. He didn't want to see these sanctions spread to other businesses.
She won this battle in almost every way.
"Today's decision by B.C. is an important step forward – one victory in a larger battle to break the landlock and get full value for one of Canada's most important products," Ms. Notley told reporters. "B.C. is stepping back from the brink and abiding by the law."
But she did issue a warning: "If it becomes clear that this action is part of a deliberate strategy to harass the pipeline and its investors with frivolous and unconstitutional legal challenges, we will act immediately to retaliate."
Ms. Notley understands that this, by no means, ends the roadblocks in the way of the Trans Mountain expansion getting built. There are still myriad court challenges that need to be ruled on. And then there are the inevitable protest actions that will test Kinder Morgan's stomach for this project.
But this troubled endeavour has also been about the accumulation of small victories. This is another of them. Ms. Notley has every right to smile triumphantly in its wake. But she knows this will not be the last test of her will.