Rachel Notley and Jason Kenney find common ground, sort of … on dubious pipeline posturing

Posted on March 12, 2018, 1:34 am
9 mins

PHOTOS: Kinder Morgan Inc.’s Trans Mountain Pipeline. (Photo: Handout from Kinder Morgan Canada.) Below: Alberta Premier Rachel Notley, Alberta Opposition Leader Jason Kenney, U of A economist Andrew Leach, and British Columbia Premier John Horgan.

I guess we can understand why Jason Kenney acts like Alberta has all the powers of a sovereign nation.

After all, the leader of the Opposition United Conservative Party was one of former prime minister Stephen Harper’s chief henchmen in the Conservative government that ran the federation through the long decade the Alberta tail wagged the Canadian dog.

But what’s Rachel Notley’s excuse?

The New Democratic Party Premier of Alberta is a lawyer, and a smart one. She understands Canadian provinces don’t have jurisdiction over interprovincial operations of “Canals, Telegraphs and other Works and Undertakings connecting the Province with any other …” Even if she didn’t, the Alberta government’s lawyers would tell her.

Any court would rule interprovincial pipelines in general and the controversial Trans Mountain Pipeline in particular fall into this constitutional catchall for obvious reasons. That question was settled in London in 1867, before Alberta was even a province.

So it seems clear Alberta would be far outside its constitutional envelope if it tried to interfere with the operation of a pipeline to prevent shipment of gasoline to British Columbia to punish that province’s government for … ummmm … operating outside its constitutional jurisdiction in exactly the same way.

But Ms. Notley and Mr. Kenney seem to be in complete accord on this one point at least: If British Columbia unconstitutionally and illegally dares to try to interfere with what goes through a pipeline that passes through its territory, then Alberta can constitutionally and legally interfere with what goes through the same pipeline when it passes through its territory.

Specifically, they both suggest they could cut off supplies of gasoline that flow through the existing Trans Mountain Pipeline to Vancouver if B.C. tries to restrict the volume of diluted bitumen that can go through it, or slow down the current controversial Kinder Morgan Inc. line expansion mega-project that was approved by the National Energy Board last year.

What’s wrong with this picture? Constitutionally, that is.

Well, it’s far enough off base that, were this not the Age of Trump, we’d just laugh it off. But the American Caligula seems to think he can just make up the law as he goes along, and that idea appears to be contagious.

Andrew Leach, the University of Alberta economics and business professor, was wonkishly Tweeting about this on Friday. His commentary, while technical, is illuminating.

His bottom line: “… there isn’t a space for AB gov intervention, provincial shipping permits on TM are not a thing which exists and so cannot be revoked, etc.”

I believe Dr. Leach is right about this, notwithstanding all the sound and fury his Tweets generated.

Furthermore, Dr. Leach said, the bottom line of the bottom line is this:

“Finally, and this is important: if you believe that @RachelNotley or @jkenney can restrict flows on the pipeline, so can @jjhorgan. And @PremierScottMoe. It’s open season on NEB pipelines and Alberta loses.” This is obviously true.

By the way, when premier Peter Lougheed restricted exports of natural gas from Alberta during his fight with prime minister Pierre Trudeau over the National Energy Program in the 1980s, he did it by reducing total gas exports, within Alberta’s jurisdiction, not by somehow cutting off certain products in an existing pipeline under Ottawa’s jurisdiction.

Then there is the matter of trade agreements, domestic and international, that govern trading relationships among jurisdictions.

I have always held the cynical view such deals are essentially “corporate rights agreements,” designed to privilege the rights of corporate persons over us natural humans.

But speaking of U.S. President Donald Trump, who seems determined to upset the trade agreement applecart, New York Times economics columnist Paul Krugman articulated an alternative interpretation of their purpose Thursday that is directly applicable to the threats emanating from Alberta these days.

“There’s a reason we have international trade agreements, and it’s not to protect us from unfair practices by other countries,” wrote Dr. Krugman, who once won the Nobel Prize for Economics. “The real goal, instead, is to protect us from ourselves.”

That is, he argued, they don’t only make us play by the rules, they restrict the ability of special interests with access to political decision makers to influence policy to the detriment of other job-creators. In other words, “to limit the special-interest politics and outright corruption that used to reign in trade policy.”

Either way, it is not an inconsequential matter that what is proposed by Alberta, and what has been done in the case of the notorious two-week B.C. wine embargo, clearly violates internal trade agreements, and possibly international ones as well.

We can count on it, moreover, that corporations that use pipelines to ship their products will assert their rights under such agreements if provinces violate them to fight intramural trade wars. As a commenter in this space observed Friday, how do you think corporations will react if government tries to tell them to whom they can sell their products? This is something both Ms. Notley and Mr. Kenney also understand, and a state of affairs Mr. Kenney has worked tirelessly to encourage, moreover.

None of this is good for the country, it goes without saying. If provinces can interfere with essential supplies to another region because of trade disputes and Ottawa sits on its hands, the argument for being maîtres chez nous will grow stronger.

This is not just true in British Columbia, but in Quebec as well, where a new generation of separatists is no doubt watching with intense interest.

While B.C. seems to have a weak constitutional case for blocking shipments of bitumen from Alberta by using its partial jurisdiction over environmental matters, it seems quite possible Alberta has an even weaker one for embargoing gasoline to B.C. through a pipeline over which it has no jurisdiction at all. This is true whether the threat is made by the NDP or the UCP.

This fight can be resolved by recourse to the courts, or by the federal government. It won’t be resolved by belligerent threats by Alberta politicians.

As for the pipeline posturing by all parties in the Alberta Legislature, I’m no constitutional lawyer, so I might be mistaken. But I was an agriculture reporter for many years, so I do recognize the smell of manure.

I’ll bet B.C. Premier John Horgan does too.

13 Comments to: Rachel Notley and Jason Kenney find common ground, sort of … on dubious pipeline posturing

  1. Farmer Brian

    March 12th, 2018

    It is an unusual day for me, David, there is nothing to disagree with you on in this post. But I have a few questions. Rachel Notley brought in the carbon tax, saying it would buy social licence for pipeline construction. All you have to do is look at the demonstration in BC over the weekend to confirm it did not work. The NDP has thrown money every direction in Alberta and yet they lag in the polls. So if you were Rachel Notley what would you do? Any chance of balancing the budget appears dependant on oil and gas royalties. Where do you think Alberta will be in 3-4 years if no more pipelines are built? Alberta is in the top 3 in Canada for the highest average wages and we have the highest percentage of worker participation in Canada. This is in my opinion a result of the energy industry and its spin offs. So it is easy to see why both Rachel Notley and Jason Kenney are on the same side in this battle. Enjoy your day☺️

    Reply
    • Farmer Dave

      March 12th, 2018

      Farmer Brian, Trudeau is responsible for getting that pipeline built just like Jason Kenney was responsible for getting pipelines built when he was a Federal Minister and he had no success (zero). Maybe he should stick his head back in his pigeon hole and observe how things get done in a federal/provincial cooperative and respectable manner. Instead he jumps hollers and screams about nothing, he showed this in his first day at the Legislature. The oil companies have come out and said Notley is doing a respectable job on the B.C. pipeline.

      Reply
    • Geoffrey Pounder

      March 13th, 2018

      “Where do you think Alberta will be in 3-4 years if no more pipelines are built?”

      Where do you think Alberta will be in 3-4 years if pipelines ARE built? Pipelines without which the industry flourished for years.
      A province locked even deeper into a fossil-fuel future. A province mired even deeper in climate change denial. A province with increasingly degraded life-support systems. A province more eager to seek short-term gain at long-term loss. A province even further out of step with 21st century realities. A province even more dependent on the oil industry. A province even more vulnerable to global oil price crashes. A province even deeper under the sway of petro-politics. A province even weaker in democratic spirit. A province that takes pride in bullying its neighbours. A province hell-bent on being the problem, not the solution.
      Not the future this Albertan is voting for.
      When you’re in a hole, stop digging.

      Reply
      • Farmer Dave

        March 13th, 2018

        Geoffrey Pounder, the hole was dug back in the 1990’s and early 2000 by Ralf Klein when he went to resource base budgeting and here we are today trying to dig our way out. Back then Alberta was getting over $13.00 per million BTU and today Alberta is getting $2.70 per million BTU, Alberta was swimming in money with high natural gas prices and that money was blown like your $400.00 Ralf bucks (what did you do with your bucks?). Money should have been spent on the following back then:

        The new cancer hospital in Calgary, new hospital in Edmonton SW, 11 built (13) badly needed schools, most built under Notley since 1913, completion of highway 63 (the death highway to Fort McMurray, new bridge for Fort Saskatchewan, these were all needed before Notley won the election.

        Jim Prentice was probably correct when he stated, look into the mirror and which of these projects do you want eliminated. PC’s spent Alberta’s money on non necessary infrasture as the following example:

        KANANASKIS REPORT:

        Plummeting oil prices have spurred the provincial government to indefinitely delay a new cancer centre and warn of challenging times ahead, but a controversial $18-million rebuild of a flood-ravaged Kananaskis golf course will continue as planned.
        All but four holes at the 36-hole, government-owned, privately-operated Kananaskis Country Golf Course were damaged when raging waters ripped through the fairways and greens during the 2013 flood.
        In a July announcement, slammed by environmentalists and flood-impacted area homeowners, the PC government said it was committing $18 million to rebuild the popular course, though officials admitted there’s no guarantee the new course won’t be destroyed again by flooding.

        Geoffrey POUNDER state what you wanted eliminated from the above or look into the mirror.

        Reply
      • Farmer Brian

        March 14th, 2018

        Geoffrey, in 2008 the U.S. pumped 5 million barrels of oil a day. By the start of 2017 8.9 million barrels per day and they surpassed 10 million barrels per day by the start of 2018. The IEA projects by the end of 2019 the U.S. will be producing 12 million barrels per day. So yes you can lobby for Alberta and Canada to curb our oil production but it will just be produced somewhere else. Look at OPEC, they have reduced their production the last 3 years to try and push up oil prices, the room this created in the market was filled by the U.S. So in the end OPEC simply transferred the wealth and production to the U.S.

        As for threatening B.C. with cutting back oil shipments I don’t really see that helping. Enjoy your day

        Reply
        • Farmer Dave

          March 14th, 2018

          Farmer Brian, I don’t think Geoffrey really understands how the world operates. Oil from the OPEC Nations is controlled by the U.S. A friend of mine just retired working in Libya working for a U.S. company under a corporation from Canada because the U.S. is banned from there. Most of the oil companies in the middle east are operated by U.S. corporations, that is why they went to war against Iraq to protect their oil interests and when war issues started in Afaganistan the U.S declined to get involved because they had no corporate interests there until they were embarrassed by the world. The U.S controls world oil prices and are keeping prices low to punish Putin. Russian was making an enormous amount of money when oil prices were over $100.00 a barrel U.S. and they were close to taking control of world oil, most reserves in the world, so the U.S. used low oil pricing to keep Putin in check.

          Reply
          • Farmer Brian

            March 15th, 2018

            The point I did a poor job of making is that environmentalists would have us believe if we leave the oil in the ground in Canada oceans won’t rise as high, that we will have less extreme weather events and that the earth’s temperature won’t rise as high. On the other hand if we increase oil production and build pipelines they predict a calamitous result. Canada only produces 1.6% of the world’s GHG emissions and if we stopped producing oil today the lack of supply would be filled by someone else in short order. World oil consumption will not be influenced by Canadian production or lack there of. We are to small of a player. Enjoy your day

  2. Kang the barbarian

    March 13th, 2018

    They don’t need laws! Father Kenney has the power of the lord on his side. A few sprinkles of holy water and some smoke and the pipeline will be built, at the point of a bayonet if necessary.

    It looks to me like the fundamentalists backing Kenney are in the grips of a cargo cult when it comes to pipelines. Wiki says:

    “A cargo cult is a millenarian movement first described in Melanesia which encompasses a range of practices and occurs in the wake of contact with more technologically advanced societies. The name derives from the belief which began among Melanesians in the late 19th and early 20th century that various ritualistic acts such as the building of an airplane runway will result in the appearance of material wealth, particularly highly desirable Western goods (i.e., “cargo”),”
    https://en.wikipedia.org/wiki/Cargo_cult

    What is Notley’s excuse? Isn’t there a Shakespeare quote about the dangers of “pandering?”

    Reply
  3. student

    March 13th, 2018

    There is something to be said for the inherent power of the government. The power of the people. We are, after all, a democratic jurisdiction. Should the people’s representatives choose to do something that offends companies, that is not automatically illegal.

    Let’s wait and see the content of the Government’s planned bill that will solidify their powers over fossil fuel exports to other jurisdictions. Your comments here are premature – right now we can only speculate on the precise methods the Government would employ to ‘turn off the taps’ and their concomitant legality.

    Reply
  4. David

    March 13th, 2018

    Well, I suppose if BC wants to offer vague threats, then we shouldn’t be surprised that Alberta will react in kind when its economic interests are threatened. Unlike in BC where some of this is situation arose due to the minority government requiring the support of the Greens, Alberta has a majority government and there seems to be more of a political consensus in Alberta than in BC.

    I’m not sure this will help Alberta’s case much with broader public opinion outside of Alberta, but behaving like an adult until now only seemed to get us so far, if anywhere at all. I am sure Lougheed carefully weighted this sort of thing before he decided to act in the early 80’s, but it was interesting how a price spike in gasoline or a loss of supply did suddenly focus the attention of those that were inclined to ignore or dismiss Alberta.

    I am fairly confident the Alberta government is on stronger legal grounds here than BC, as the owner of the resource it is trying to control it before it enters the pipeline. In any event, legal challenges take time and the problems caused by a disruption of supply to BC or elsewhere could be felt very quickly. Canada has been slow to realize the mounting frustration in Alberta as two pipelines did not go ahead and now the only remaining one to the pacific is in jeopardy. There is almost a sense of desperation now on this issue and if the rest of Canada thinks it can continue to ignore things much longer, it could get very ugly, very soon.

    Reply
  5. Paul

    March 13th, 2018

    Unusual to see Rachel Notley head-faked into repeated over-reactions. I have to this point considered her a cool and canny operator. Premier Horgan has managed this not through any concrete action but merely through public musings about potentially taking action. (Which cannot be contested in any formal way until he does something concrete.)

    Pretty much everything Alberta has so far done will only inflame the large lower-mainland constituency against Trans-Mountain, rallying them repeatedly in support of Horgan’s position without his needing to say anything further.

    Entirely lost in this is deep, and thoroughly justifiable consternation many will feel to watch at least nominally centre-left parties fighting over an ecologically devastating, carbon- and diluent-laden, low-quality product with dubious economic prospects even in the short term. In the medium term, the prospects for tar sands stand in inverse relation to ours for planetary survival.

    A symbolic carbon tax simply cannot buy social licence for a product whose brand has already been destroyed–by science, common sense economics, and any realistic analysis of energy return on energy invested.

    Instead of pitting neighbour against neighbour, high time for the Canadian polity to consider treating oil and gas, and tar sands / oil sands in particular, as a sunset industry, removing subsidies, raising royalties, taxing externalities (carbon, site reclamation, water treatment, health costs, tens of thousands of abandoned well sites) and providing for a just transition for workers, while preparing ourselves for the coming century of catastrophic climate disruption and ecological die-off.

    Reply
    • Dilbit

      March 13th, 2018

      So you’re ok with shutting off your fuel source? Ok then.

      Reply
  6. St Albertan

    March 13th, 2018

    I think what most people don’t realize is that we as Canadians are faced with a crisis. The causes are rooted in NAFTA and we are faced with solutions that require an agility we’re unused to. Our industry and trade are completely dependant on our neighbour to the south. We’ve kicked the can down the road until with Trump we’ve finally been confronted with a dead end. If we don’t export west and east? Well then, it’s his art of the deal. Lord help us! Forget climate change. Forget social license. If we’re a non voting vassal state, we might as well save the money and beg to become the 51st through 61st plus territories of Trump world! Get it together and build some country saving pipelines and new trading channels. I for one don’t want to be part of a failed state!

    Reply

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