British Columbia (B.C.) has won an injunction preventing Alberta from acting on its threat to ‘turn off the taps’ of its oil and gas if B.C. thwarts the Trans Mountain Pipeline expansion.
B.C. convinced the Federal Court that the threat was real. Alberta’s former NDP government passed Bill 12, the Preserving Canada’s Economic Prosperity Act, on May 16, 2018, but did not proclaim it into law. The new United Conservative Party government took care of that on April 30, 2019, triggering a court challenge from B.C.
Bill 12 requires a licence to export oil, natural gas or refined products from Alberta and allows the Energy Minister to deny a licence if the export is not in the public interest.
The injunction does not declare Bill 12 to be unconstitutional. The Federal Court has yet to rule on that question. Rather, it prevents Alberta’s Energy Minister from exercising her power under the Act to cut the flow of oil and gas to B.C. until such time as the constitutionality of Bill 12 has been determined.
Speaking to reporters after the decision on September 24, 2019 was released, Alberta Premier Jason Kenney said the government was still studying the decision, and would amend Bill 12 if doing so would address the concerns raised by the Federal Court. However, he also said that the threats Bill 12 was intended to address had largely disappeared. Earlier in 2019, the BC Court of Appeal ruled that B.C. did not have the power to limit the amount of bitumen flowing through the Trans Mountain Pipeline by requiring a hazardous substance permit.
Interestingly, it was the Alberta premier’s own words, as well as those of his predecessor and members of both parties, that came back to haunt them before the Federal Court. During legislative debate on Bill 12, Kenney, who was then Leader of the Opposition, then Premier Rachel Notley and members of both caucuses said Alberta should be prepared to “turn off the taps” of oil to B.C. if B.C. sought to block the Trans Mountain Pipeline expansion. Those statements made it clear that Bill 12 was aimed solely at oil shipments to B.C., which raised important constitutional questions that would have to be resolved at trial.
The Federal Court granted the injunction because invoking the power under Bill 12 would cause irreparable harm to B.C., while not invoking it would not cause any harm to Alberta.