Trans Mountain CEO calls on Ottawa to act in pipeline dispute

Expects federal government to assert its jurisdiction: to get past words of support to action.

CALGARY — The head of Kinder Morgan Canada Ltd. has joined growing calls for the federal government to step into the dispute between Alberta and BC over oil exports.

Ian Anderson said that he’s pleased to hear strong and continuous words of support from Prime Minister Justin Trudeau on the company’s Trans Mountain pipeline expansion project, but that at some point the federal government will have to act.

“I’m expecting the federal government to help solve this dispute between the provinces. I think there’s a role there for them,” he said.

“I think that asserting their federal jurisdiction in whatever manner they determine is most effective and most appropriate is something I’ll be looking for, so that we get past the words of support, to the actions of support that we’re all chasing hard.”

The federal government is also feeling pressure from Alberta Premier Rachel Notley, who has called for federal support in a dispute she says is between BC and Canada, not BC and Alberta.

Trudeau refused to wade publicly into the dispute, saying talks continue behind closed doors with the provinces.

“We’re continuing to discuss and engage with the BC government, with the Alberta government,” the prime minister before his weekly caucus meeting. “We’re making sure we come to the right place that’s in the national interest for Canada.

“We’re going to continue to engage with the premiers on a regular basis.”

Trudeau’s comments come a day after Notley ramped up pressure on the issue by banning BC wine imports, following an earlier announcement to halt electricity talks with BC, in protest of the province’s plan to limit increases of diluted bitumen shipments.

Anderson applauded Alberta’s support, and said he had sent a letter Tuesday to BC Premier John Horgan about his concerns for the province’s plans.

“We are calling on the premier to think very serious about the severity of the actions and the path that they’re undertaking here. I don’t think anyone is missing the agenda that they’re pursuing.”

BC has said it is restricting increased diluted bitumen shipments as a safety issue and wants to limit shipments until it better understands the impacts of a spill and that shippers will be able to clean one up. But the policy creates significant uncertainty for the $7.4-billion Trans Mountain project that would close to triple the capacity of the pipeline system.

In a statement on Facebook, Saskatchewan Premier Scott Moe said that while his province supports Alberta in its fight, he doesn’t think the dispute will be solved by trade measures that have an impact on consumers and private businesses.

“While we have previously stated that Saskatchewan will support Alberta in defending against this attack on our energy industry, Saskatchewan has no plans to participate in retaliatory measures that would be in contravention of our trade commitments.

“We do not believe this matter will be resolved by trade measures that will primarily impact consumers and private businesses.”

BC Premier John Horgan held off on ratcheting up a trade war with Alberta, but experts say both provinces still have a few limited options to raise the stakes.

Alberta Premier Rachel Notley has already deployed some of the weapons in the province’s arsenal to protest BC’s proposed restriction on bitumen shipments, when she announced a ban on BC wine on  and an end to talks on increased electricity imports.

The limits on BC wine were a viable target because provinces control the purchase of alcohol, said Trevor Tombe, an associate professor of economics at the University of Calgary.

“With booze, because it’s a monopoly wholesaler owner by the government, it can easily change its purchasing decision.”

Given the unique regulatory circumstances of alcohol, which are currently being challenged at the Supreme Court, Tombe points out that beer imports from BC would be another obvious target for retaliation.

While possibly less high profile than BC wine, Alberta imported about $58 million in 2014, the last year with data available from Statistics Canada, compared with $60 million in wine and brandy for that year.

BC could retaliate with its own restriction on importing Alberta beer, but as of 2014 the province only bought about $7 million worth of beer from Alberta.

Governments are, however, limited on putting restrictions or tariffs on most other goods that cross the border – whether it’s BC lumber or Alberta beef – as those would be clear barriers to trade in violation of the constitution.

“That is completely illegal, and there is no ambiguity there,” said Tombe.

Some have wondered about the more extreme option of shutting off existing Alberta oil and gas shipments westward to potentially drive up gas prices in BC.

But even if it were effective, the Alberta government doesn’t have control over the commodity and would need the co-operation of oil and gas companies.

File from Mia Rabson in Ottawa


News from © Canadian Press Enterprises Inc. 2016

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