This post originally appeared in the Globe and Mail on May 31, 2017: https://www.theglobeandmail.com/news/british-columbia/a-historic-moment-for-bc-politics-and-our-environment/article35165898/?intcmp=dwall&user=p
The governing agreement between the NDP and Green Party represents a historic moment in British Columbia politics. It anticipates not only the first minority government in the province in 65 years, but also the first government in Canadian history predicated on support from the Greens. The two parties’ commitment to proportional representation could yield even more dramatic and lasting changes to the provincial political landscape.
The agreement also represents a potentially historic moment for the Canadian oil industry and economy. The Greens and NDP’s shared commitment to climate action and opposition to the Trans Mountain expansion project presents both economic and political challenges to the proposed pipeline.
On the economic side, the details of the NDP-Green partnership were released the same day as Trans Mountain’s IPO offering, which raised the $1.75-billion sought by the proponent, although at a lower price than foreseen and as shares of the parent company, Kinder Morgan, plummeted in value.
The IPO prospectus was candid (as required by law) concerning the significant financial risks to the project, including challenges in obtaining regulatory approvals and permits, public opposition, and climate change-related sea level rise at the tanker terminal. To say nothing of the 19 outstanding legal challenges, many by B.C. First Nations who do not consent to the pipeline crossing their unceded territory. The prospectus also acknowledges that efforts to mitigate climate change, both in Canada and in countries to which the oil is destined, could have a negative impact on crude oil demand.
Although armed with those warnings, IPO investors were not privy to the NDP-Green commitment to “employ every tool available to the new government to stop the expansion of the Kinder Morgan pipeline.” It remains to be seen whether Trans Mountain’s board will convey a final decision to proceed with the project to the province by June 30, as required by the company’s agreement with the B.C. government.
Should they do so, the political challenges nonetheless loom larger than ever. When the BC Liberal government is defeated in June, as seems inevitable, opposition to the pipeline will no longer be a matter of individual citizens, environmental groups, or even local governments and First Nations, but of a provincial government acting on behalf of all British Columbians.
The B.C.-Trans Mountain agreement does not allow either party to withdraw for 20 years. However, it acknowledges that nothing in the agreement limits the authority of future provincial governments to “pass, amend, replace, revoke or otherwise exercise any rights or authority regarding legislation, regulations, policies or any other authority of the province.” An NDP government, with Green support, seems poised to exercise those rights.
In fact, the province has yet to issue dozens of permits required for the pipeline to be built and to operate in B.C. There also have been proposals for a new provincial health impact assessment, which at minimum would contribute significant delays. Or the B.C. government could concede defeat in one of the First Nations legal challenges against the province.
Enter the federal government. Prime Minister Trudeau on Tuesday restated his government’s support for the Trans Mountain pipeline. But as for Trans Mountain’s IPO investors, that support comes with significant risks. Just how much political capital is Mr. Trudeau willing to spend to see the pipeline built?
The federal government could exercise its constitutional power to declare the pipeline to be “for the general advantage of Canada” and thus a matter of exclusive federal authority. It is hard to imagine the Trudeau government would turn to a power last exercised more than 50 years ago, one that risks the ire of all provinces by threatening the balance of powers in the Canadian federation.
Ottawa could request a Supreme Court reference to confirm that its jurisdiction concerning trade and “interprovincial works and undertakings” (including pipelines) trumps provincial authority. Or it could wait for Trans Mountain to legally challenge a provincial permit denial as an opportunity to argue for federal paramountcy.
However, any effort by the federal government to force through the pipeline over the objections of the provincial government is likely to reinforce opposition within British Columbia, putting at risk at least some of the 17 seats held by the federal Liberals in the province.
It also risks political fallout for 40 Liberal MPs in Quebec, where there is strong opposition to another pipeline, Energy East, and where provincial governments are invariably staunch defenders of provincial jurisdiction.
At the heart of the Trudeau government’s 2016 climate plan lies a political compromise: a commitment to pursue reductions in Canada’s own greenhouse gas emissions in exchange for expansion of fossil-fuel exports to other countries via new pipelines. The looming NDP-Green partnership in British Columbia reveals both the political fragility of that compromise and the contradiction of climate leadership funded by fossil-fuel development.