Pressure on feds to act to save pipeline
Pressure is mounting on the federal government to use money or the Constitution to back up its claims that the Trans Mountain pipeline expansion project will be built, no matter what.
Prime Minister Justin Trudeau’s cabinet was in Ottawa Tuesday for an emergency meeting following news that Kinder Morgan is suspending all non-essential spending on the pipeline until it and its investors feel secure the project won’t be derailed by strong opposition from the British Columbia government.
Jason Kenney, leader of Alberta’s United Conservative party, said Tuesday that since Trudeau had no qualms withholding more than $60 million from Saskatchewan for not joining the Liberal carbon tax plan, he should follow suit by withholding transfers to B.C. for blocking a pipeline over which it has no jurisdiction.
Kenney said on Twitter that the B.C. government started a “constitutional crisis’’ and thus far Ottawa hasn’t hit back at them with anything.
“Federal transfers to BC’S treasury accounted for $8.9b this fiscal year, or almost 17% of BC’S budget,’’ he said. “Even a small financial backlash from Ottawa could imperil the province’s balanced budget.’’
Under the Pan Canadian Framework on Clean Growth and Climate Change, the federal government provided $2 billion in per capita funding for climate change projects but it was available only to provinces that signed onto the framework. Saskatchewan, the only
province that didn’t sign on, won’t get $62 million in guaranteed funding under the program, although it can apply for specific project-based funding along with other provinces and municipal governments.
Natural Resources Minister Jim Carr says Canada will consider financial, legal and regulatory options, but insists the government has approved the pipeline in the national interest and, one way or another, it will be built.
Under the Constitution, interprovincial transportation, including pipelines, and projects deemed to be in the national interest, fall within federal jurisdiction. The Trans Mountain pipeline expansion, to triple the capacity of the existing pipeline between Edmonton and Burnaby, B.C., falls into both categories.
Financially, the federal government could step in with
funding to either insure the risk taken by the pipeline’s investors or buy an equity stake in a bid to give some reassurance the pipeline will get built. Or it could adopt the Kenney proposal to withhold funding from B.C.
Legally, it could sue the B.C. government, although it’s unclear what kind of lawsuit could be waged until B.C. actually follows through on its threat to regulate against increased oil flowing through the pipeline to export markets outside B.C.
“There’s not a lot (B.C.) can do, in my view, that would withstand scrutiny if challenged in court,’’ said University of Waterloo politics professor and constitutional expert Emmett Macfarlane. “But as of right now, what we’re seeing is mostly rhetoric, not action, and that limits the federal government’s options from a constitutional perspective.’’