April 16, 2018 4:48 pm

Danielle Smith: Action needed to solve Trans Mountain impasse

WATCH ABOVE: Prime Minister Justin Trudeau says Finance Minister Bill Morneau discuss with Kinder Morgan on how to remove uncertainty in pipeline construction.

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I want to believe that Prime Minister Justin Trudeau genuinely wants to solve the Kinder Morgan Trans Mountain dispute. I really want to believe.

But the “just watch me” moment hasn’t materialized. Sunday’s summit and press conference demonstrated that he can manage to say the right words, but the proof will be measured in action.

It is unclear what the Canadian government has planned but I don’t have much confidence that Finance Minister Bill Morneau – who so badly bungled the small business tax changes – is the right guy for the job.

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READ MORE: Alberta’s opposition party leaders blast Trudeau, Notley for lack of progress with Horgan on pipeline issue

The notion seems to be that there will be some financial support for the company to encourage them to proceed with construction, and some legislation to back the federal government’s assertion of its jurisdiction. As for any more detail, it appears we won’t be told anything until a deal – should one be reached – is done.

I wanted to hear from an industry analyst how all of this was going over. “Lead balloon” might be stating it too strongly, but it is fair to say industry watchers and Albertans are underwhelmed.

My listeners asked the reasonable question: “How will it stop B.C. Premier John Horgan’s campaign of legal harassment against the project if the federal government buys all or part of the Trans Mountain pipeline?”

LISTEN: Tim Pickering with Auspice Capital Advisors joins talks about the Trans Mountain pipeline with Danielle

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I spoke to Auspice Capital Advisor founder Tim Pickering about that very question. The answer is: it won’t.

Kinder Morgan doesn’t need or want a government partner. They just want to build their pipeline. Having Morneau throw a $1 billion or $2 billion into the project doesn’t stop Horgan from issuing constitutional challenges, introducing delays in granting permits or re-litigating issues that have already been resolved. It’s just a very expensive way to show moral support.

I asked Pickering if he could speculate on the type of legislation that could possibly give Kinder Morgan the assurances they needed to continue. He said he couldn’t think of what that would be, but we’ll have to wait until the legislation is revealed.

WATCH BELOW: Trudeau blames B.C. government for Trans Mountain pipeline construction uncertainty

READ MORE: Kinder Morgan pipeline impasse warrants emergency debate, Tories say

The problem is, you don’t fight a constitutional battle with a statute. Horgan is asserting a constitutional right to block bitumen; Trudeau needs to fight back with a constitutional hammer not a law that might take months to wend its way through both federal chambers.

United Conservative Party (UCP) Leader Jason Kenney pointed out that Trudeau has already ruled out using the three most effective hammers it’s got: the federal declaratory power to assert this project is in the national interest, a Supreme Court reference to assert Ottawa’s jurisdiction under other sections of the constitution and what he describes as the “power of the purse” –  withholding billions of dollars in funds for infrastructure and jobs training if B.C. persists in challenging Ottawa’s authority.

The fact that the federal government is not using every means at its disposal gives the indication they aren’t up to the fight.

Pickering made two further suggestions for how to resolve the impasse.

Premier Rachel Notley has said legislation is coming that would introduce export restrictions on pipeline products going to B.C. Pickering said the way to do that without unduly harming Kinder Morgan is to only allow export of bitumen through the line, which would allow them to continue to export while depriving Burnaby’s Parkland refinery of crude and depriving British Columbians of gasoline and diesel. That seems appropriate and proportionate.

READ MORE: Trudeau insists B.C. government has no authority to block Trans Mountain pipeline project

The second possibility Pickering mentioned was the United Nation’s 1965 Convention on the Transit Trade of Landlocked States. Coastal nations aren’t allowed to block their landlocked neighbours under international law. Wouldn’t it be something if Alberta appealed to the United Nations to gain the right to trade in the open sea?

We would probably find our claim rejected because, in theory, as a member of the Canadian federation it is the Government of Canada that is responsible for ensuring this right of access.

Whatever Trudeau has planned, Kinder Morgan has given us a firm deadline: May 31. If we don’t have a resolution by then, the company will pull the plug on the $7.6 billion project and Albertans will have grave doubts about whether there is any benefit at all to being part of the Canadian federation.

Danielle Smith can be reached at danielle@770chqr.com.

 

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