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Canada gets into the pipeline business

by Mark Sabourin
EcoLog, 6/1/2018 8:10:00 AM

Canadians won’t grow accustomed to owning pipelines, Public Safety and Emergency Preparedness Minister Ralph Goodale told a crowd in Fort McMurray, Alberta on May 30, 2018, part of a swing by Cabinet ministers selling the federal government’s $4.5-billion acquisition of the Trans Mountain Pipeline.

“At the appropriate time, Canada will seek to transfer the project to new private sector owners in a way that will ensure the project’s construction and operation, while protecting the public interest,” he said according to his prepared remarks.

It’s an admittedly high-risk investment, a fact conceded by Prime Minister Justin Trudeau at a Bloomberg News event on May 29, 2018. With British Columbia’s (B.C.’s) opposition, “the project became too risky to go forward with it, that’s what Kinder Morgan told us,” Trudeau said. “We don’t intend to be in the pipeline business for the long-term,” he added. “There is a very strong business case for this pipeline.”

“Pick up those tools, folks. We have a pipeline to build,” said a smiling Alberta Premier Rachel Notley, whose government had armed itself with the legislative authority to cut off B.C. from Alberta’s natural gas, crude oil and refined fuels, and threatened to do so unless B.C. backed down from its threat to ban the transportation of additional bitumen by pipeline through B.C. pending an environmental review. Lost on many was the irony of an Alberta Premier cheering the federal nationalization of an oil industry asset.

In his own news conference following the federal announcement, B.C. Premier John Horgan said he did not believe the nationalization affected the province’s reference case to the B.C. Court of Appeal. Horgan says the question to the court is whether B.C. can regulate the flow of bitumen, an issue that is independent of pipeline ownership. Horgan said the reference case would proceed.

However, Horgan did concede that with the pipeline becoming a federally-owned rather than a federally-regulated project, the issue of the paramountcy of Parliament had been added to the mix. However, he promised that he would nonetheless continue to do everything he could “to protect those things that are precious to B.C.” Under the doctrine of paramountcy, where valid federal and provincial laws conflict, federal law prevails.

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