Is just talking about restricting diluted bitumen in pipelines an unconstitutional impediment to trade?

Posted on February 14, 2018, 2:35 am
7 mins

PHOTOS: Some of the Fathers of Confederation looking, well, fatherly. Below: Steely eyed Alberta Premier Rachel Notley, B.C. Premier John Horgan, and would-be premier Jason Kenney.

In case you missed it, a new constitutional doctrine seems to be developing in Alberta. To wit: the idea that creating business uncertainty violates Section 121 of the Constitution Act, 1867, which governs interprovincial trade.

Section 121 of what was known until 1982 as the British North America Act is pretty unequivocal on the topic of interprovincial trade. It says: “All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

This is why B.C.’s argument it can regulate the flow of bitumen through that province appears on its face to be a weak one – if the fight ever gets to a point it can actually be tested in a court of law, that is.

Mind you, in 1867 the environment wasn’t really on the front burner among the fellows we used to call the Fathers of Confederation – every one of them having at least one of the necessary qualifications for fatherhood. So the B.C. case may not be quite as weak as it is being unanimously made to seem in Alberta these days.

At any rate, arguments now being advanced with one voice by Alberta’s NDP Government, its Conservative Opposition, and its mainstream media chorus seem to go well beyond mere unimpeded admission from one province to another of articles of growth, produce or manufacture – a definition that unquestionably includes Alberta’s diluted bitumen.

Premier Notley in her newly revealed tougher-than-Peter-Lougheed, way-tougher-than-Jason-Kenney, mode certainly seems to be making this argument about B.C. NDP Premier John Horgan’s talk of restricting the amount of diluted bitumen that can pass through his province. Repeatedly calling B.C. opposition to Kinder Morgan Inc.’s Trans Mountain Pipeline expansion project unconstitutional, she argued recently “this kind of uncertainty is bad for investors. Enough is enough. We need to get these things built.”

This is being used to justify the official Alberta boycott of B.C. wine, and to argue for other, more punishing, trade sanctions against British Columbia.

It seems to me, though, that pipeline proponents including Ms. Notley are now starting to connect these dots in a way that comes close to arguing that creating uncertainty itself is therefore an unconstitutional restraint of interprovincial trade.

Indeed, beyond Ms. Notley’s stream of Tweets and comments to this effect, there seems to be an elite consensus about this in Alberta, if not quite a complete consensus.

The problem with this argument, of course, is that beyond a general statement of intentions, Mr. Horgan doesn’t seem to have actually put forward any actual policy to call unconstitutional. Indeed, in yesterday’s B.C. Speech from the Throne, there was little indication of what Mr. Horgan’s government intended to do beyond an anodyne statement it “is considering new protections that would improve our ability to prepare for, and respond to, bitumen spills.”

Um That was it. Could this indicate Premier Horgan doesn’t really have a plan? Or does it just mean he’s being cagey, hoping to create enough uncertainty for the Texas-based corporation to reconsider its pipeline plans, which it has threatened to do.

Either way, yes, uncertainty has been created. Calls for protests to stop the pipeline by environmental activists in B.C. have the same effect. But so what? Isn’t the wonderful capitalist market supposed to be by its nature uncertain?

Does this mean a B.C. citizen exercising her right to advocate a halt to pipeline projects is unconstitutionally violating Section 121?

And if so, what’s next? A prohibition on free expression for the greater good, as defined in the corporate boardrooms of Calgary? Or is free speech OK, as long as it can be guaranteed it won’t have any actual impact on the corporate sector’s wishes?

The whole business confidence argument, by the way, is well understood among economists to be mainly a tool for intimidating governments and opponents of corporate projects. The “Zombie Confidence Fairy,” as Nobel Prize winning economist Paul Krugman termed the notion that business confidence is undermined by uncertainty is so widely repeated it has taken on the air of unassailable truth. Just the same, as Dr. Krugman says, “it’s actually a highly dubious, mathematically implausible argument that receives no support at all from the data.”

Or maybe, as some environmentalists claim, the fossil fuel industry really is so fragile that it just needs to be stalled a while to be stopped forever.

If so, that’s not very good news for Alberta, with its one-note fossil fuel economy, is it?

On the political front, though, Premier Notley seems to be having a great week with this strategy. As Calgary Herald political columnist Don Braid observed in a rant about Mr. Horgan, Ms. Notley “has reshaped her image radically in the past 10 days. She’s gone from patient conciliator to fiery defender of Alberta, in the winning tradition of premiers stretching back to Social Credit and the Progressive Conservatives.”

This happened just as Opposition Leader Jason Kenney was apparently trying to recast himself in the mould of former Saskatchewan premier Brad Wall as the Mr. Congeniality of Alberta politics, which is ironic considering his history.

Well, he seems to have a plan now. At Preston Manning’s conservative bun-fest in Ottawa last weekend, the UCP Leader promised to “restore investor confidence” and take on abortion rights and gender-neutral toilets. It wasn’t clear from the article on a right-wing website whether he sees the two activities as connected.

Happy Valentine’s Day.

23 Comments to: Is just talking about restricting diluted bitumen in pipelines an unconstitutional impediment to trade?

  1. Sam Gunsch

    February 14th, 2018

    Hey Climenhaga… watch out that you don’t get accused of going all communist on us… excerpt: ‘Isn’t the wonderful capitalist market supposed to be by its nature uncertain?’

    You’ll be consigned to the anti- crowd… the anti-ethical oil leftist/foreign-funded/eco-terrorist/anti-oilsands dirty stinking hippies crowd, if you’re not careful.

    Reply
    • Sam Gunsch

      February 15th, 2018

      At least one or two eye-winking emojiis needed to be added to my comment above, btw. Meant as total-tongue-in-cheek comment.

      Reply
  2. February 14th, 2018

    Goods may enter, but nothing is said about letting goods out . Trans-shippment is not specified.

    Reply
    • David Climenhaga

      February 14th, 2018

      I wondered about this too. Not being a lawyer, I don’t know if there is any case law on this. Be that as it may, this doesn’t sound like much of a solution from B.C.’s perspective, since all they could do to enforce it is prevent trans-shipment from a federally regulated port. See JerryMacGP’s comment above as well. DJC

      Reply
    • Northern Loon

      February 15th, 2018

      There is a song about never leaving, but there are a lot of other similarities to the BC – Alberta situation https://youtu.be/EqPtz5qN7HM

      Reply
    • David Climenhaga

      February 14th, 2018

      One would think it’s Alberta that is in violation of TILMA, or whatever it’s called now, at the present moment. DJC

      Reply
  3. GregH

    February 14th, 2018

    Well, as long as Postmedia is on side, I’m sure Ms. Notley has little to worry about. (Notes the lack of eyeroll smileys in here and moves on…)

    Reply
  4. jerrymacgp

    February 14th, 2018

    So I was listening to CBC’s The House yesterday on my podcast app, recorded on the weekend. One of the interviewees was a law professor at the University of Ottawa, a constitutional law expert whose name I didn’t commit to memory. Her argument was that the applicable constitutional provision is in fact Section 92(10) of the Constitution Act of 1867, which, in sub-para. (a), reserves to exclusive federal authority the following: “Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province“. Certainly any plain language reading of this clause would lead to the conclusion that interprovincial pipelines would be encompassed in “other Works and Undertakings”. It means that no province has any authority over interprovincial projects like this, full stop.

    The interprovincial trade argument is weaker, since there are a plethora of interprovincial trade barriers in place now, especially in the area of alcoholic beverages. (Some of those may in fact have some legitimacy, being a form of exercise of provincial authority over areas of provincial jurisdiction that are influenced by the differing political cultures among the provinces).

    Reply
    • David Climenhaga

      February 14th, 2018

      A very good point, Jerry. The just-build-it uncertainty argument and the problems stemming from it apply in exactly the same way, I should think. I will probably amend this story to reflect this. Thanks. DJC

      Reply
    • Farmer Brian

      February 14th, 2018

      Jerry, I was looking for this information this morning very glad you provided it. The basic fact is that the federal government has the power and jurisdiction to get this pipeline built. Premier Notley is attempting to create the political environment under which the federal gov. will finally exercise this power. She knows if it goes to court the timeline will not be beneficial for the Alberta NDP gov. Premier Horgan knows that he wins if it goes to court, he also wins if the federal government forces the pipeline through because he can say he did all he could to stop it, he even wins is Kinder Morgan gives up and backs away from the project. If I was Premier Horgan I would keep on doing what I am doing lol.

      Reply
      • Problem_bear

        February 14th, 2018

        I keep thinking of this as a bit of political theatre cooked up by Horgan and Notley. We all know the pipleline is going through, but there is plenty of political hay to be made in the meantime. Horgan needs to deflect the media from the Site C debacle, and Notley needs to look tough so she will be re-elected. They know if they play their cards right, the can leave ol’ Justin holding the bag!

        Reply
  5. ronmac

    February 14th, 2018

    One thing we know for sure. If somebody tried to restrict the flow of booze back in 1867, Sir John A would have packed up his bags and fled Canadian soil for good, never to return

    Reply
  6. David

    February 14th, 2018

    There is talking and there are threats and the distinction is generally not that hard to make. If I hate Fred, I can say say so, but if I want to hurt him or rid the earth of him, that is a different thing. So BC can dislike Alberta bitumen, it can even study or consult its own people about it, if it feels the need to do so and the Alberta government has even said this is ok. However, what it can not do is stop shipments of it until it is satisfied about whatever it is unhappy about. The BC government representative who mentioned stopping shipments of Alberta bitumen, either had a poor understanding of the constitution, the effect this would have on Alberta, the potential very negative response or perhaps all of these things.

    Given the Premier was away at the time, perhaps he could not be immediately be blamed for this mess. However, given that his minister stepped in it, he (or the minister) needed to clarify things once he got back to BC. As far as I know this threat has not yet been retracted by either the Minister or the Premier of BC.

    Most Albertans and the Premier of Alberta do not take kindly to threats of economic blockades by BC. Until BC realizes this and corrects itself there will be a very strong ill wind blowing from the east into BC and it will only get worse if the BC government continues to be disingenuous about this.

    Reply
  7. Geoffrey Pounder

    February 14th, 2018

    Calgary Herald political columnist Don Braid: Notley “has reshaped her image radically in the past 10 days. She’s gone from patient conciliator to fiery defender of Alberta.”

    Not how I see it.
    Notley knew that West Coast British Columbians would not take the pipeline expansion lying down (except in front of a bulldozer, perhaps). Notley knew she would have to steamroll local opposition.
    Horgan campaigned against the pipeline expansion. The BC Premier is delivering on his election promises.
    Notley didn’t campaign on pipelines. The NDP’s 2015 platform explicitly opposed dilbit export pipelines. Now she’s flipped her position: flogging pipelines to business elites and hiring big corporate guns to enforce Big Oil’s demands.

    Notley awarded herself social licence — without local community input — by linking her (tiny) carbon tax to new pipelines. Obvious contradiction.
    Now Notley has blown up relations with our neighbours with a needless trade war.
    One bungle after another.
    It didn’t have to be this way.

    “Fiery defender of Alberta”? Only if you believe that Big Oil’s interests align with the public interest.

    Reply
    • political ranger

      February 15th, 2018

      Thanks Geoffrey, I think your analysis is spot on.
      Notley has become anti-Notley very soon after being elected. She is saying and doing the very things she campaigned against.
      All this pissing and moaning about oil being the lifeblood of Alberta is complete nonsense. The petroleum industry have made out like bandits and some few people have prospered but the Province has been raped and robbed. Very little for the common resource or the common people.
      Every thinking British Columbian knows this. We’ve seen the absolute destruction and waste in the NE since the petro-corps started raping and pillaging a couple decades ago. It’s little wonder why no one in BC would want another project in another area from such a belligerent and flagrantly criminally irresponsible industry in their back yard.
      As for Notley and her gov’t, she is the only one in this uproar who actually doing the acts that she is railing against. She has cut off the trade in electricity, she has boycotted the wine industry, she has created a business council to determine what other industries she can threaten. Quite the princess.

      Reply
    • jerrymacgp

      February 16th, 2018

      Do you really, seriously expect that if the NDP is thrown out at the next election, a Jason Kenney government would act any differently on this file? More than likely, a Kenney-led UCP régime would be even more in thrall to the industry, by abolishing the carbon tax and rolling back workplace standards and worker safety protections brought in by the NDP, which would undoubtedly be among their first actions upon assuming office. They would undoubtedly also be even more aggressive towards the Horgan-Weaver government in B.C.

      Reply
      • David Climenhaga

        February 16th, 2018

        I agree, Jerry, although as written in this space before, that might actually suit the Horgan Government. DJC

        Reply
      • Farmer Brian

        February 16th, 2018

        Jerry I am very curious, what exactly would be so terrible about abolishing the carbon tax? As I demonstrated in an earlier response in thIs space using Statscan numbers the carbon tax in B.C. has not slowed the growth of gasoline consumption compared to Alberta where the was no carbon tax in the same time frame. The carbon tax is nothing more than a politically popular(with certain segments of the populous) way to increase government revenue and the size and waste of government. The proof of this was an interesting recent article in Macleans on the pledge by all 3 candidates running for the P.C. Leadership in Ontario to axe the carbon tax. In debating what eliminating the present cap and trade program would do nothing was said about the environment, all they talked about was the hole it would put in government finances!! Enjoy your day

        Reply
      • Political Ranger

        February 16th, 2018

        There is no “more in thrall” Jerry.
        There is only ‘in thrall’ or ‘not in thrall’.
        One Premier in thrall to the petro-industry is as bad as any other. To think otherwise is to demonstrate the effects of drinking the petro-koolaid.

        Reply
  8. Dan Harper

    February 15th, 2018

    The blind extremists have nothing to add but vitrol and redirecting the conversation away from the valid concerns. Tends to make those concerns more valid.

    Kenney is a bigger joke than the last parade of ‘would be Premiers’ that were too busy with their hands in the cookie jar. Propaganda won’t change that.

    Reply
  9. February 16th, 2018

    Here’s a funny line of reasoning.

    1. People in Alberta want their pipeline to cross BC to get to ports.
    2. People in BC demand a high level of certainty about the safety of the pipeline.
    3. Alberta posts a bond for a few billion dollars, to guarantee the costs of any clean up that might be needed in BC.
    4. The Alberta government goes to the pipe line builders and ask for a royalty, to pay back the bond.
    5. At the end of the life of the pipeline, the money is there for the pipeline builder to pocket, if there was no spill.
    6. Everyone is happy?

    Reply

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