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Minister of Natural Resources Joe Oliver announces new rules for pipelines and financial penalties for individuals and companies that violate environmental laws during a news conference in Vancouver.DARRYL DYCK/The Canadian Press

Ottawa faces a big challenge in winning the support of Canadians – especially aboriginal people – for development of energy pipelines to the west coast, Natural Resources Minister Joe Oliver said on the eve of the National Energy Board's report on Enbridge Inc.'s controversial Northern Gateway Project.

In an interview Wednesday, Mr. Oliver said the Harper government has taken significant steps to improve pipeline and tanker safety, but needs to improve its capacity to respond in the event of an offshore accident, and to build trust with First Nations people.

"Absolutely, there's work to be done," Mr. Oliver said.

"Generally, there are people who are critical, but there are also people who are hopeful and want to go ahead, but they're not going to compromise on the environmental safety."

The minister would not comment on the Northern Gateway report to be issued Thursday by a National Energy Board panel. The NEB can recommend the project not proceed due to environmental concerns or that it be allowed to proceed, a path that would likely be accompanied by a series of conditions.

The federal cabinet will then have six months to decide whether to accept the NEB recommendation or overrule it.

At stake is a key piece of the Canadian energy industry's effort to expand its access to foreign markets. Northern Gateway promises a new route for Alberta oil producers to ship oil abroad and capture stronger global prices at a time when Canadian crude suffers price discounts due to transportation constraints.

The federal government received two major reports in recent weeks that pointed to serious challenges with its aggressively promoted policy of building oil and natural gas pipelines through British Columbia to access Asian markets. One blue-ribbon panel said the industry and government are not prepared to respond to a major oil spill off the west coast, while another report concluded there is a deep lack of trust between aboriginal Canadians and government and that their support will only come when that chasm is bridged and they are assured they will benefit from development.

The natural resources minister said his colleague, Transport Minister Lisa Raitt, will respond to the tanker-safety report with new measures to enhance preparedness. Enbridge said Wednesday that it will improve its own pipeline safety regime by launching a joint research project with rival TransCanada Corp. into advanced leak detection.

Mr. Oliver has met with more than 20 aboriginal chiefs and elders in western Canada this year and said he remains convinced many of them will support energy pipelines and development if they are properly consulted; are treated as full partners, and would derive long-term benefits from projects.

"There is more constructive dialogue than there might appear to be," he said. "Which is not to say this isn't a real challenge. I'm finding overwhelmingly but not universally that there is a real desire to move forward generally and in some cases on specific projects – people don't want to miss an opportunity." However, he added, First Nations leaders cannot expect to solve all their grievances and economic problems by negotiating benefits from natural resources projects.

While Mr. Oliver expressed broad optimism over the potential for aboriginal support of energy development, several First Nations leaders categorically oppose Enbridge's Northern Gateway Project, saying both the pipeline and the tanker traffic pose unacceptable risks. And they threaten to launch court challenges if the federal cabinet approves the project, which would deliver 500,000 barrels a day of oil sands bitumen to an export terminal at Kitimat, B.C.

In a news conference in Ottawa, New Democratic Party Leader Thomas Mulcair said the Harper government has no credibility on environmental safety after overhauling the review process to impose tighter deadlines and limiting the participation of critics. He said allowing the crude tankers into the Douglas Channel would be "madness."

"In the absence of an environmental impact assessment process that is credible, complete and transparent, the public is not going to have pipeline projects rammed down its throat across Canada," he said.

With a file from reporter Gloria Galloway in Ottawa.

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