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Politics Politics Briefing: Alberta drops support for climate plan following court defeat for Trans Mountain

Good morning,

Alberta is cancelling its planned increases to the provincial carbon tax, a key requirement of the federal climate plan, and demanding an emergency session of Parliament following a Federal Court of Appeal ruling that has imperilled the Trans Mountain pipeline expansion.

Premier Rachel Notley announced her province’s reaction in a televised address last night, as politicians and the industry reacted to a stunning blow to the Trans Mountain pipeline just as the federal government finalizes its purchase of the project.

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Ms. Notley’s announcement means Alberta won’t increase the province’s current carbon tax of $30 per tonne to $40 per tonne in 2021, or to $50 per tonne in 2022, as required by the federal climate plan schedule. Although the planned increase is still three years away, her announcement deals a major blow to Prime Minister Justin Trudeau’s push for national consensus on climate policy. Saskatchewan and Ontario already oppose the plan. The decision will also overshadow next year’s Alberta election, in which former federal cabinet minister Jason Kenney’s United Conservative Party will pose a major threat to Ms. Notley’s NDP government.

The court ruling represents another major setback for Alberta’s oil sector, which has already suffered through years of low prices. The ruling all but ensures a planned 2021 start date won’t be met for the expansion.

It also shows the federal government has yet to fully come to terms with repeated warnings from the courts that Indigenous people must be adequately consulted before approving major resource projects.

Coincidentally, the court issued its ruling the same day Kinder Morgan shareholders overwhelmingly approved the $4.5-billion sale of the Trans Mountain pipeline to the federal government, which will now face an even greater challenge finding a new buyer.

This is the daily Politics Briefing newsletter, written by Chris Hannay in Ottawa and James Keller in Vancouver. If you’re reading this on the web or someone forwarded this e-mail newsletter to you, you can sign up for Politics Briefing and all Globe newsletters here. Have any feedback? Let us know what you think.

TODAY’S HEADLINES

Negotiations for the North American free-trade agreement are supposed to wrap up today, but sources tell The Globe that last night’s talks did not go well. A source said Canada was willing to give concessions on access to the dairy market and intellectual property rules, but that the U.S. was firm on getting rid of Chapter 19, the dispute resolution process.

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Irwin Cotler, a well-respected human-rights lawyer and former Liberal cabinet minister, told Prime Minister Justin Trudeau that he should give Saudi political prisoner Raif Badawi permanent residency in Canada.

And the leaders of eight prominent art galleries have written to the Liberal government to ask them to do something about a recent court ruling that upended what art is eligible for a major tax credit when donated to museums. “The future of every museum in the country is now at stake,” the letter says.

Gary Mason (The Globe and Mail) on what Trans Mountain’s defeat means for Notley: “There is no one more hurt by this decision than Alberta Premier Rachel Notley. Courts and tribunals had rendered decisions in 17 consecutive cases before this one, with each one a victory for project proponents. But those didn’t matter. This was always going to be the one that was most important.”

Graham Thomson (Edmonton Journal) on Notley’s political future: “Without a pipeline project, you might as well bury the NDP’s chances in one of the trenches that was supposed to house Trans Mountain’s steel pipe. Not that there are any trenches being dug, come to think of it.”

The Globe and Mail Editorial Board on how to save the pipeline: “But it would be a mistake to conclude that Ottawa cannot salvage this snake-bitten project. With the proper response, Canada could end up with both a much-needed pipeline expansion and a clearer set of rules for approving projects of this kind.”

Don Braid (Calgary Herald) on the decision: “The Federal Court of Appeal panel of three judges rejected the project thunderously but also said the problems can be rectified fairly quickly. Are they joking? It took them nearly a year to reach a decision with dire consequences for the Canadian economy and even national unity.”

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Andrew Willis (The Globe and Mail) on Ottawa’s purchase of Trans Mountain: “The likes of TransCanada Corp., Enbridge Inc. and the Canadian Pension Plan Investment Board opted to pass on this investment because they had exactly the same concerns – they couldn’t see a way to overcome the political and social opposition to the project. Only the federal government was willing to shoulder the risks that come with Trans Mountain, because Mr. Trudeau rightly believes this project is as important to this generation of Canadians as a railway was in 1867.”

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