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Report On Business Quebec move to seek Energy East injunction provokes regional tensions

TransCanada President and CEO Russ Girling, second from left, announces the new Energy East Pipeline during a news conference in Calgary, August 1, 2013 file photo.

TODD KOROL/REUTERS

The Quebec government has raised the regional tensions ahead of Prime Minister Justin Trudeau's climate summit set to begin Wednesday by requesting an injunction against the controversial Energy East pipeline.

Quebec is asking the court to force TransCanada Corp. to comply with provincial law and submit the Energy East project for a provincial environmental assessment. Provincial Environment Minister David Heurtel said the government is not signalling its intention to block the pipeline, but merely insisting that TransCanada follow provincial law.

But Saskatchewan Premier Brad Wall and conservative opposition leaders in Alberta slammed the move, saying it appears to be another Eastern Canadian attack on the western oil industry. Montreal Mayor Denis Coderre and his local counterparts recently stirred up a hornets' nest of regional hostility when they announced their opposition to Energy East, which would carry 1.1 million barrels of crude to eastern refineries and an export terminal in Saint John, N.B.

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However, Alberta Premier Rachel Notley said she received assurances from Quebec that the provincial government is not erecting new barriers to the pipeline project, and that it will respect National Energy Board jurisdiction.

"I was getting quite ready to come in here with guns blazing" on the Quebec action, Ms. Notley said during a news conference Tuesday in Edmonton. But, she said, she is ready to accept Quebec's explanation that the provincial review is similar to one conducted by the Ontario Energy Board last year.

"We would be very concerned if this was about a new, competing, parallel process" that would require interprovincial pipelines to meet a series of provincial approvals across the country, she added. "If we ultimately determine that this is what this is intended to turn into, we will vigorously oppose it and you will hear a lot more from me on it."

The flare-up in regional tensions comes at an inopportune time for the Prime Minister.

He meets his provincial and territorial counterparts on Wednesday and Thursday in Vancouver to discuss a national climate strategy. The Liberal government wants to see a national effort that would include a minimum carbon price across all provinces, as well as tougher energy efficiency standards, investments in green infrastructure and clean technology, and support to reduce greenhouse gas emissions in the country's oil and gas industry.

At an event in Vancouver on Tuesday, Mr. Trudeau said some regional disagreements are to be expected and the country's diversity is a source of strength rather than weakness. He added that it is "understandable" that provincial governments want to ensure resource projects garner social licence, and that his government is requiring companies and regulators to consult more with Canadians to win that support.

"One of the fundamental responsibilities of any prime minister of Canada … is to get our resources to market," he said. "And in the 21st century, getting our resources to market means doing them in a responsible and environmentally sustainably way. In order to get projects built, we need a level of public confidence, of public trust that hasn't been necessary in the past."

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Mr. Trudeau and Ms. Notley argue that one way to build support for resource projects is to have a credible pan-Canadian climate strategy that, in Alberta's case, includes carbon pricing and an eventual cap on emissions from the oil sands.

"Canada must step up to a new and better role as one of the world's most environmentally progressive economies, and one of the world's most environmentally progressive energy producers," the Alberta Premier said.

But Saskatchewan's Mr. Wall said it appears Alberta's approach is failing to win support for pipelines or the oil industry more broadly in other provinces. Quebec's request for an injunction will create problems for national leaders, he said Tuesday.

"I've asked our trade minister and our trade officials to look at what options we have to say, you know, enough is enough," Mr. Wall said. "Saskatchewan – and western Canada also – has to protect its own interest and send some strong messages if that's what the province of Quebec is doing."

Quebec's Environment Minister David Heurtel insisted his province is merely requiring TransCanada is follow provincial law. Failure to do so could leave the company and the province subject to legal challenges down the road, he said, noting a court decision in British Columbia that will require that province to do its own environmental review of the Northern Gateway pipeline.

"This is not jurisdictional issue; it's not east versus west; it's not about Quebec trying to block Alberta or Saskatchewan," Mr. Heurtel said in an interview. "We are neither for nor against the project."

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With a file from reporter Justin Giovannetti in Edmonton.

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