Ever since the federal government approved the Trans Mountain pipeline twinning in the fall of 2016 there has been verbal sparring between British Columbia and both the federal and Alberta governments. But now that Kinder Morgan has suspended all “non-essential activities and related spending” on the expansion the rhetoric could soon turn to action.
Both the federal government and Alberta government have options to apply pressure on British Columbia.
WATCH HERE: B.C. Premier John Horgan responds to Kinder Morgan’s decision
Ottawa has said it is looking “at all available tools” in its attempt to convince Premier John Horgan’s government to back away from its opposition. And the Alberta government is in the midst of drafting legislation that would stop the shipment of oil and gas from the province into British Columbia.
Here is a look at some potential options from both levels of government.
Restricting health care and social transfers
The federal government transfers billions of dollars every year into British Columbia’s coffers. The 2018/19 budget documents show Ottawa contributing $6.9 billion in health and transfer transfers. That total goes up to $7.4 billion in 2020/21.
“We are going to stand up for the federal jurisdiction, the federal right, to determine projects are in the national interest and get them built,” Prime Minister Justin Trudeau said.
The money goes directly into the health system and social service transfer. But the B.C. government is insistent a move this drastic would be “unlawful.”
LISTEN: What impact will Kinder Morgan’s announcement have on the projected completion of the project?
“It would be inappropriate, I believe, for the federal government to threaten or to try and coerce B.C,” said B.C. Environment Minister George Heyman.
In total, the B.C. government is budgeting to receive $8.9 billion this year from Ottawa. Alberta Premier Rachel Notley is in favour of Trudeau’s government applying some financial pressure.
“They can put economic pressure, fiscal pressure, onto the province of B.C.,” Notley said. “They can assert their jurisdiction either legislatively or through the courts.”
Stalling transit funding
The federal government has been generous to British Columbia over the last few years. That generosity has led to record-breaking promises for spending on child care, housing and billions earmarked for public transit. But with the war over Kinder Morgan hitting a boiling point, the cheques could be held back.
“What we are seeing today is a government and a premier that believe they act in complete isolation,” BC Liberal leader Andrew Wilkinson said. “What you have at the end of the day is a government and a premier who have created uncertainty in the marketplace.”
The province and the federal government recently signed a 10-year deal, which will see $4.1 billion in infrastructure funding spent in the province. The money is earmarked to cover the feds’ 40 per cent share of Surrey light rail transit (LRT) and a Broadway subway line. But Trudeau still needs to come to B.C. to officially announce the projects. That is seeming unlikely with the tension between the two sides as high as it is.
Limit coastal protection
Getting the previous Liberal government to approve the Trans Mountain pipeline was a long, drawn-out process. Former premier Christy Clark was only willing to sign off on the approval after Ottawa came forward with support for the LNG industry and a $1.5-billion ocean protection plan. But what if the Trudeau government felt the only way to get to Horgan was to withdraw that money?
“The federal government has stated they are going to go ahead with the plan regardless,” Heyman said. “We have said we are going to take actions within our jurisdiction to protect our environment.”
The federal government also controls the coast guard that monitors British Columbia’s coastline. But any action in restricting that work could pose serious risk to safety on the water.
Cut the supply of oil and gas
While the federal government is reluctant to talk about specific actions, the Alberta government has been more direct. Alberta Premier Rachel Notley says her government is introducing legislation this week to give Alberta the power to reduce oil flows to B.C.
“We will be moving forward very aggressively,” Notley said. “I am very hopeful there is a way forward for all of us. It doesn’t have to be this way.”
Experts have indicated that sort of measure could drive gas prices in British Columbia into the $2 to $3 a litre range.
“I think what Alberta is potentially talking about would be extremely unlawful,” Heyman said.
Following Horgan’s conversation with Justin Trudeau on Sunday he told reporters “there were no threats, there was no intimidation” from the prime minister. But the longer this goes on, that could quickly change.