Alberta Politics
Alberta Energy Minister Margaret McQuaig-Boyd looks on as Premier Rachel Notley speaks about Bill 12 yesterday (Photo: Government of Alberta).

A Bill to Squeeze British Columbia Till Its Pips Squeak introduced in Alberta Legislature – but can it pass constitutional muster?

Posted on April 17, 2018, 2:02 am
7 mins

Is it just me, or is almost everyone from Alberta quoted in the media sounding a little overwrought these days?

Yesterday, Alberta Premier Rachel Notley and Energy Minister Margaret McQuaig-Boyd rolled out Bill 12, rather tendentiously dubbed the Preserving Canada’s Economic Prosperity Act, the sole purpose of which seems to be to squeeze residents of B.C.’s Lower Mainland till their pips squeak if they and their NDP government won’t get out of the way of Alberta’s demand for a fat new pipeline to carry our diluted bitumen to the Pacific Ocean, and pronto.

“We are very committed to putting pressure on B.C. to come around and focus on what this pipeline actually means,” said Premier Notley, who is also a New Democrat. This was presumably a reference to what she thinks will happen to gasoline and heating prices in the Vancouver area if Alberta launches the trade sanctions it’s been threatening against the province next door, which Bill 12 is intended to allow it to do.

Ms. Notley also told her news conference Alberta has a legal opinion saying the bill won’t violate the interprovincial trade provisions of the Canadian Constitution, the rules of the North American Free Trade Agreement or interprovincial trade deals.

I don’t know who the government’s lawyer is, but it’s pretty hard to believe legislation that permits Alberta’s energy minister to treat companies and jurisdictions arbitrarily and differently, launch trade boycotts of vital materials to other provinces, and fine companies that won’t co-operate with its embargoes up to $10 million a day won’t quickly run afoul of all three.

At any rate, we know the government’s lawyer can’t have been Joe Arvay, Q.C., the well-known B.C. legalist who handled Alberta’s “Enron Clause” case that ended last month with a quiet settlement with Calgary-based Enmax Corp. Mr. Arvay is otherwise occupied these days, writing up the reference question for the B.C. Government about whether it has jurisdiction over what goes through Kinder Morgan Inc.’s Trans Mountain Pipeline and what environmental controls it can place on the project. The impact of the reference question on Kinder Morgan’s sense of “certainty” is the proximate cause of this 10-week interprovincial pipeline brouhaha.

The question is taking a long time to draft, but at least we’re likely to know what it is before May 31, the day on which Kinder Morgan has said it will pull the plug on the project if it can’t get an ironclad guarantee it can be profitably completed.

For her part, Ms. Notley suggested that’s also the date the taps may start being eased shut on the flow of resources to B.C.

Meanwhile, Alberta Opposition Leader Jason Kenney, who for weeks has been screaming at the government to do something just like this, appeared to be getting cold feet yesterday, now that there’s actually something on paper. Ummm, Mr. Kenney said, he’ll be reserving judgment until after his United Conservative Party Caucus mates can take a good long gander at the wording.

“We certainly accept the goal but we have to do our due diligence as the opposition to make sure the bill doesn’t go farther than it needs to,” said Mr. Kenney, obviously ready to duck and cover. Well, maybe he’d just had a blistering call from some oil company executive who wasn’t going to be told by any elected politician to whom he can peddle his dilbit.

As a legal strategy, I’m sorry to have to tell you, Bill 12 sounds like it’s on life support before it’s even had First Reading. But – who knows? – as a political strategy maybe it’ll work around here, regardless of the constitutional and inter-jurisdictional niceties, if Ms. Notley ends up looking tougher than Mr. Self-Declared Tough Guy himself.

Maybe this realization is what caused former Progressive Conservative Party MLA, energy minister and two-time failed leadership candidate Rick Orman to go right over the top, as it were, and demand yesterday that Prime Minister Justin Trudeau call out the Army to crush B.C.’s “eco-terrorists.” This really is the term Mr. Orman used to describe well-behaved B.C. protesters like Green Party Leader Elizabeth May.

Meanwhile, B.C. Environment Minister George Heyman sounded as cool as a cucumber on CBC’s As It Happens last night, calmly explaining that B.C. is doing nothing not allowed by the Constitution (a fact that is impossible to dispute despite a lot of hyperbole about the rule of law on this side of the Rockies), will obey the rulings of the courts when its pipeline question gets before them, and will continue to look out for the province’s environment.

He said he expects to disclose his government’s legal strategy within a few days.

B.C. Attorney General David Eby reminded Alberta that his government is pretty confident discrimination against another province of the sort proposed in Bill 12 really is unconstitutional and B.C. expects to take legal action against Alberta if it follows through on its threats.

It’s safe to say this is not the last time we’re going to be writing about this.

21 Comments to: A Bill to Squeeze British Columbia Till Its Pips Squeak introduced in Alberta Legislature – but can it pass constitutional muster?

  1. Hurtin Albertan

    April 17th, 2018

    Is not turning off the taps and causing fossil fuel prices to skyrocket exactly what the more radical environmentalists want (and what the fossil fuel shippers don’t want)?

    Why is there not more widespread discussion of the economics of the project particularly with taxpayers potentially having to underwrite it? With the world awash in oil that is easier to transport and refine, won’t Asian refiners, traders, etc. pay less for bitumen?

    • political ranger

      April 17th, 2018

      … because my friend, the “economics of the project” only point to it’s unprofitability.
      The only cash to be made on this by the second-string Enron gang is from gov’t subsidy.

    • Sam Gunsch

      April 17th, 2018

      A new Belot column today discusses another new factor which will make markets for AB bitumen worse than just this: re: ‘Asian refiners, traders, etc. pay less for bitumen?’

      EXCERPT: ‘Alberta heavy crude industry is not bouncing back. All indications are it is about to get worse in fairly short order due to this really earth-shaking shift in global marine fuel.’

      EXCERPT: ‘The stories told by Conservative members of parliament that Trans Mountain is needed to maintain jobs and create new jobs in Alberta is false. The crisis in Alberta, that investment has turned down, is because Alberta makes a high carbon, high cost, capital intensive, heavy barrel of crude in a world where low cost, quick payback, higher quality crude is growing almost exponentially. A new pipeline is not going to change that.’

      • Keith McClary

        April 18th, 2018

        Yah, we have an infinite supply of dirt cheap high quality crude. No need for the Arctic, ultradeep offshore or those bothersome Mideast countries, Russians or Nigerians.

    • Sam Gunsch

      April 17th, 2018

      More current analysis why AB dilbit doesn’t need Kinder Morgan’s pipeline…

      EXCERPT: ‘The new capacity from these proposed expansions — without Trans Mountain — is 1.7 million bpd. But with the declining oil market, Alberta only needs between 0.5 and 1.3 million bpd of new capacity by 2030 (and likely closer to the lower end). Bottom line: There is more than enough new pipeline space proposed without building Trans Mountain.’

      That’s today from: Thomas Gunton is director of the Resource and Environmental Planning Program at Simon Fraser University and is a former deputy environment minister for B.C. who helped resolve the province’s “War in the Woods”.

    • Watson S

      April 17th, 2018

      They already pay less for it; no matter how many shipping constraints are removed Bitumen is not worth as much as light crude or synthetic crude because it requires a more expensive refinery and more energy to turn into refined products.

      That is to say even if we had 20 Transmountains, Dilbit would still not be worth as much as WTI or Brent. Synthetic Crude might get close though.

  2. Scotty on Denman

    April 17th, 2018

    It’s simply amazing how fast the tactics have left orbit. Maybe Alberta’s got some new kind of bitumen byproduct, a super rocket fuel, maybe?

    Does this have something to do with Kinder Morgan’s self-serving deadline to get the pipeline project moving? Come to think of it, maybe that magic launching fuel is really political haunches jumping as high as an American oil company tells them to.

    Orbital, in any case.

  3. Bob Raynard

    April 17th, 2018

    The $64,000 question: Is This Legal?

    If it is, it could be considered a bold move, but with little political upside as the people it impresses are likely to continue to support their messiah, JK.

    If it isn’t, however, Rachel Notley has just stepped on a landmine. I have a chilling, and all too clear, mental image of Premier Jason Kenney pointing to the millions of dollars lost on court charges and penalties that resulted from a lost court case, and saying it is an example of NDP mismanagement.

    Really, it is pretty smart politically on Kenney’s part: push the NDP into a policy his base loves, claim credit for it, and then when it blows up after he is elected, blame the previous government for it.

    I would certainly feel better if the announcement was made with a couple of respected lawyers on the stage, willing to attach their law firm’s reputation to the opinion that the Alberta Government has the constitutional authority to shut off the taps. Jason Kenney also claims to have found a lawyer that says it is possible to challenge the federal government’s authority to impose a carbon tax, so he will join the Saskatchewan government and challenge the carbon tax. Both endeavours seem destined to be money spent with no result, other than to satisfy the talk radio crowd.

  4. David

    April 17th, 2018

    The conventional wisdom that the Federal government has a lot of constitutional powers and the provinces not so much has been turned on its head a bit recently, as BC and now Alberta test the limits of what they can do under the constitution.

    Initially Alberta seemed content to play nice, but now seems to be following BC’s example of stretching the limits of the tools in its tool box. The Alberta bill would certainly give the provincial government great powers, which ironically seems to be causing the UCP and Kenney to have second thoughts about it. Certainly, this is a government led vs. free enterprise approach, which is probably more consistent with NDP thinking than UCP thinking. It also seems to me to be an echo of what Lougheed said many years ago about the provincial government thinking and acting like the owner of the resources.

    I think the assumption of many in BC was that there was little or no economic risk for them to challenge the pipeline expansion, as their existing energy supply was secure in the existing pipeline. However, the Alberta bill may turn this upside down. If the expansion does not go ahead, it may not be oil exports that are in jeopardy, but the existing supply to the lower mainland, if Alberta decides it is in its best interests to use it for exports instead.

    Perhaps that is a price BC is willing to pay, but I suspect once the realization of significantly higher prices hits BC motorists, they may be less happy with the approach their government has taken. Of course BC can take Alberta to court, just as Alberta has already threatened to do to BC, but both know any court case could be drawn out and there is really no guarantee of victory either way.

    • Scotty on Denman

      April 17th, 2018

      Albetar and Saskashewan are the only two provinces which weren’t granted full sovereignty over their resources upon confederation; the Crown, via an Act of Westminster (UK) 1931, finally did so—a quarter century after the “Spare Cloth Provinces” had confederated. Otherwise, every province was vested with the sovereignty of the Crown before it confedererated, that is, as colonies. (In contrast, Alt. And Sask. were Territorial commercial charters governed by factors representing the charter company.)

      Thus, each colony was fully sovereign with a governor representing the Commonwealth monarch before being solicited for confederation. Each deliberated for itself whether to accept the sectors of its sovereignty it would need to relinquish to a federal government. And that portion was a minimum required for any federal state to function—and no more. In other words, the federal government was built from what sovereign colonies gave it in order to join as provinces. Each province remains sovereign except in those areas required by a federal government to function; the sovereignty of the Crown is still invested in each, unchanged, and each has a governor who represents the Canadian monarch.

      In short, the federation is a creation of the provinces.

      Aside from the chronological order of this confederation process, another feature demonstrates the provinces’ superior sovereignty: each entered into the federation on its own terms (except, perhaps, the two ‘Spare Cloth Provinces’), each is the constitutional equal of any other, regardless geography or population, and—most importantly—each and any may separate from the federation by a popular approval of clearly-worded referendum (50%+1).

      These facts might not conform to some citizens’ idea of perfection, but we’re a long way from that. The Senate is very imperfect, the constitutional apportionment of federal parliamentary seats is bound to become disproportionate over time and, most important, the settlement of treaties with indigenous nations is too easily ignored in the division of sovereignties and loyalties of the federal arrangement (many Eastern treaties were made colonially—some in return for military alliances—others on non-dominion Territory, and recently on federal Territory [Yukon, NWT, Nunavut] and provinces [BC’s Nisga’a Treaty, Quebec’s James Bay Treaty]—a patchwork that makes treaty settlement, an obligation confirmed by recent SCoC decisions, much more difficult.

      Yet this underscores again the provinces sovereign superiority, for good or bad, over the feds.

  5. Geoffrey Pounder

    April 17th, 2018

    Is Alberta’s prime export oil or angry hyperbole?
    With Alberta’s trademark over-the-top rhetoric, Orman fears eco-terrorists “who are going to chain themselves to graders and backhoes.”

    Ooh! Scary.
    Is Orman frightened by grandmothers who bind themselves to heavy machinery?

    People who threaten their neighbours’ water supplies, economy and jobs, and public health. People who extirpate caribou and poison wolves. People who make climate change worse.
    Aren’t they the real eco-terrorists?

  6. Andy M.

    April 17th, 2018

    “It also seems to me to be an echo of what (Premier Peter) Lougheed said many years ago about . . . acting like the owner of the resources.”
    No kidding. Eerily so. It’s been remarked in this blog several times how Rachel Notley seems to be channeling the former PC premier. I do understand the political motivations, but, as I have tried to explain before, she does the memory of her father Grant no honour. A lone voice of sanity in the Alberta Legislature, Grant called Lougheed on his over dramatic display of Alberta aggrievement.
    And, here is Rachel using a similar playbook to the one her father condemned so courageously almost four decades ago. As others have pointed out, these shorter-term political calculations may not end well.

  7. Ron Austin

    April 17th, 2018

    On October 6, 1937, Lieutenant Governor Bowen announced that he was reserving Royal Assent on the three bills until they could be sent to the Supreme Court for review. The following spring, the Supreme Court of Canada determined that all three acts were beyond the legislative authority of the province.
    The Aberhart government launched a legal challenge over the Lieutenant Governor’s power to reserve Royal Assent. On March 4, 1938, the Supreme Court of Canada supported Lieutenant Governor Bowen’s actions and ruled that the powers of reservation and disallowance of vice-regal offices were “subject to no limitation or restriction.” The Aberhart government had no choice but to withdraw the bills from its legislative agenda.

    • Scotty on Denman

      April 19th, 2018

      We’re these bills not related to Alberta’s attempt to issue provincial specie in contravention of the Constitution (which reserves that authority for the feds)? As I recall—though I stand to be corrected—the attempted currency was to do with the so-called ‘social credit’ which was to be paid to each citizen whose province enterprises use to generate profit or surpluses.

      I never understood why Aberhart didn’t issues coupons, instead. As in all federated sovereign states, the feds are the only ones allowed to mint or print money. I think the bills that were struck down comprised the entire legislative effort of the whole year of 1937. There hasn’t been much love lost between the two governments ever since 1905 when Alberta was confederated but didn’t get full sovereignty over its resources like other provinces (excepting Sask. which confederated concurrently under much the same terms —downstream river-flow being distinctively special).

  8. Ron

    April 17th, 2018

    Stop coal coming out of and through BC.
    Ship safe, solid bitumen briquettes via rail & use Tsawwassen coal terminal.
    Use TM pipe for market ready fuels, refined in AB from conventional crude.
    Invest in wind, solar, geothermal and efficiency.
    Everyone shares the pain, no tankers in Burrard Inlet.

  9. David Bridger

    April 17th, 2018

    Bill 12 is likely designed to outfox Mr. Tough Guy, Jason Kenney and nothing else.

    By talking tough, Ms. Notley has boxed the UCP leader up and suddenly he has nothing to say, not wanting to show agreement with a move that he himself would have made if he was in the Premier’s chair, he just clammed up.

    But this won’t pass constitutional muster and as stated above wasn’t intended for that purpose. Politics 101.

  10. Robert Walton

    April 17th, 2018

    Are you trying to help the people who want to end public discourse? If you are, keep this format. I’ll avoid like a plague!

  11. Bill Malcolm

    April 17th, 2018

    Notley overwrought? Vindictively stupid from my POV here in the Maritimes. Squawking like a spoiled child, egged on by that vacuum head of a JT. And the CBC keeps “reporting” that BC is pledging to do anything to stop the expansion of the KM pipeline, which seems untrue to me. This article summarizes it for me:

    So, just like the load of old rope the feds dish out to us all on Syria and Russia, the casual observer in all Eastern Canada is fed propaganda that it’s BC causing all the trouble, courtesy of CBC and the other two corporate-owned media networks. Probably the major newspapers too – I don’t read those sorry rags any more. It all seems like a put up job to discredit BC to me

    Since I have relatives in Alberta grown wealthy on oil patch related employment, we have agreed to not discuss the matter. Too far apart.

    But Notley’s drama queen rhetoric seems wildly overplayed to me. And about as rational as a stalking spurned lover, i.e. irrational. Your mileage may vary.

  12. April 17th, 2018

    Thanks for the history reminder Ron Austin.

    BC has Site C being built with ZERO demand for its energy, and Alberta has tons of dilbit that needs high energy refinement… seems like Lego to me.

  13. St Albertan

    April 18th, 2018

    First off, the existing pipeline is maybe the only multi product line anywhere. Yes it pumps oil, but it also pumps refined products. The idea that the expansion would pump dilbit exclusively is laughable. It would pump low sulphur diesel to help mitigate the horrendous emissions of the product transport fleet of shipping every day into the port of Vancouver. The story lost is that with our refinery in Sturgeon County we can reduce emissions in the fleet that docks in Vancouver regardless of all this insane foolishness. Why are we so stupid? I would say it’s divisive political money bound to destroy our country, but hey? Who are we to defend ourselves!

  14. Athabascan

    April 19th, 2018

    It’s very simple folks!

    B.C.’s Horgan is right. The Aboriginals who oppose this pipeline through their lands are also right.
    AB’s Notley is wrong! And, Kinder Morgan can fuck off while Canadians sort this out.
    Trudeau is wrong in his approach. He should refer the issue to the courts and wait for a ruling.
    The original NEB “consultation” was rigged by Harper, and needs to be re-done fairly and scientifically.

    Anytime an NDP government sides with big oil, or Harperites like the federal cons, or Kenney, you know something is awry. I didn’t vote for Notley to see my tax dollars going to Kinder Morgan to promote the destruction the planet.


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