THREE WAYS THE PIPELINE CAN GET BUILT

Well, that got people’s attention. Kinder Morgan’s announcement that it would halt all “non-essential” spending on the Trans Mountain pipeline expansion pending the government of British Columbia’s agreement to stand down its opposition to the project may or may not have been quite the surprise it was made out to be.

But certainly the ultimatum, or more particularly the May 31 deadline attached to it, has concentrated minds wonderfully.

At first, it might seem puzzling that the company should have taken such an extreme step. After all, it has been winning at every step of the process: not only at the National Energy Board and with the federal cabinet, but in the courts as well. The city of Burnaby’s attempt to tie up work on the project by delaying the necessary construction permits was confounded by an NEB ruling in December assuming the authority to issue the permits itself; the Federal Court of Appeal last month declined even to hear the province’s challenge of that ruling.

Other courts have issued injunctions barring protesters from obstructing access to Trans Mountain facilities, including the project’s Burnaby and Westridge Marine terminals. And for all the protesters’ efforts, legal or otherwise, to prevent it, the first stage of preparatory work on the terminals was completed on schedule last month.

But time is money, and the longer the process drags on, the more it is costing Kinder Morgan. It has already spent $1 billion just to get this far. Once construction gets underway in earnest, costs will escalate considerably — as presumably will the protests. For the company to be willing to make that bet, it must have some assurance it will be allowed to see the project through to completion — and to do so without such additional delays, and additional costs, as to make it uneconomic.

This is, of course, the B.C. NDP government’s ace in the hole. No one seriously doubts Ottawa has the legal authority to ensure the pipeline is built, eventually. But can B.C. delay things long enough, through various rearguard legal actions — including its self-initiated reference to the province’s courts on the limits of its own jurisdiction — to persuade Kinder Morgan to walk away from its investment altogether? Yes, the company seems to be saying, it can.

It’s traditional at this point, not least in this column, to demand the federal government take “action,” or at any rate show “leadership.” The course on which B.C. is embarked is not only harmful to the country’s economy — without access to overseas markets, Canadian oil producers will continue to be forced to sell their product at a discount — but destructive of its national unity and contemptuous of the rule of law. It cannot be allowed to succeed.

So yes, the federal government must act. The question is how. There would appear to be three broad avenues open to it.

The first is to use its undoubted constitutional powers to force the pipeline through. These are indeed many and broad — so much so as to make superfluous everyone’s favourite silver bullet, Sec. 92.10 (c) of the Constitution Act 1867, the famous “declaratory” power. The point of the declaratory power (permitting Parliament to “declare” certain public works to be “for the general Advantage of Canada”) is to bring under federal jurisdiction works that would not normally fall under it, notably those that are “wholly situate within (one) province.”

But Trans Mountain, as a work that crosses provincial boundaries, is already under federal jurisdiction (see Sec. 92.10 (a)). If that were not enough, there are Secs. 91.2 and 121 of the Constitution, establishing Canada as a common market and empowering the federal government to police it. (Plus there’s disallowance and reservation, if you really want to get into it.)

The problem, again, is time. Even if the federal government short-circuited the B.C. process by taking the matter straight to the Supreme Court of Canada, they’d be waiting a year, at least.

Hence the sudden interest in the federal and/or Alberta governments providing Kinder Morgan with some sort of insurance their investment would not be for naught, either by taking an ownership stake, or simply by indemnifying them for their costs in the unlikely event the feds lose in court.

But that’s expensive, and not only financially: whatever the rights and wrongs, the Liberals would be taking a huge political risk, at the least, in ramming the pipeline through over B.C.’s objections.

The second broad avenue, ordinarily the preferable one, would be to persuade B.C. to come to some sort of deal, through some combination of bribes (more money) and threats (less money).

The problem here is that positions of the two sides are so absolutely and irreversibly opposed as to make any deal short of capitulation by one side or the other unlikely: between “this pipeline will be built” and “this pipeline will never be built” there isn’t much room to compromise. Again, the feds probably have sufficient leverage to force a “deal” on B.C., if they had to, but at what political cost?

That leaves a third possible avenue. It is not particularly honourable or even legal, but on the other hand it is quick and keeps the feds’ fingerprints off of it. That is to let Alberta do the job for them, by enacting certain highly painful and flagrantly unconstitutional retaliatory measures Ottawa would agree to overlook, such as cutting existing shipments of oil to B.C.

Even if it did not bring B.C. to its knees, it might soften it up enough for the feds to enter the scene as peacemakers.

As with most civil wars, it may be that more blood has to be shed before the desire for peace overtakes the desire for revenge.