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Kinder Morgan’s May 31 deadline results in threats of economic sanctions, an emergency cabinet meeting, talk of NAFTA challenge

The Texas-based transnational Kinder Morgan has given the Trudeau government until May 31 to end any uncertainty about the company being able to complete its 890,000 barrel per day tar sands pipeline.

Global News reports, “Ottawa has said it is looking ‘at all available tools’ in its attempt to convince BC 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.”


The news report then notes other tactics that could be used against BC:

1- “The 2018/19 budget documents show Ottawa contributing $6.9 billion in health and social transfers. That total goes up to $7.4 billion in 2020/21. …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.”

2- “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.” The implication being that money could also be withheld.

3- “The federal government also controls the coast guard that monitors British Columbia’s coastline.” (But acknowledges “any action in restricting that work could pose serious risk to safety on the water.”)


National Post columnist Andrew Coyne has also put forward ways the Trudeau government could compel the BC government to drop its resistance to the pipeline:

1- Use Section 92.10 (c) of the Constitution 1867 to “declare” the pipeline is in “the general Advantage of Canada” to bring all decisions related to it under federal jurisdiction (the “problem” here is that if the federal government took the BC government to the Supreme Court of Canada on this would take a year or more, well past the deadline Kinder Morgan has given Trudeau).

2- “Some combination of bribes (more money) and threats (less money)” to make the BC government comply (“but at what political cost?” – the Liberals won 17 seats in BC in the October 2015 federal election).

3- “Let Alberta do the job for them, by enacting certain highly painful and flagrantly unconstitutional retaliatory measures Ottawa would agree to overlook, such as cutting existing shipments of oil to B.C. Even if it did not bring B.C. to its knees, it might soften it up enough for the feds to enter the scene as peacemakers.”


Premier Notley has stated “Alberta is prepared to be an investor in the pipeline” and Natural Resources minister Jim Carr says that a federal investment in the $7.4 billion pipeline is also one of the options the Trudeau government is considering.


And business lobby groups are also ramping up their rhetoric. The Business Council of B.C. says “We can’t rely on the regulatory process, the rule of law, with any degree of confidence. I think the federation is at risk and it’s corrosive”, the BC Chamber of Commerce says “Make no mistake, if this pipeline can’t move forward, it will have broad implications for resource development in B.C. and Canada”, and the Greater Vancouver Board of Trade says the impasse “is now challenging − in the full view of the international investment community the very ability of our country to govern itself.”


CBC now reports, “Federal cabinet ministers are returning to Ottawa Tuesday for an emergency meeting in search of a way to convince Kinder Morgan to go forward with its Trans Mountain pipeline expansion. The move is unusual, the House of Commons is in the middle of a two-week break, during which times cabinet rarely meets, but the federal government appears keen to salvage the pipeline project it green-lighted 17 months ago.”


And what if Texas-based Kinder Morgan doesn’t get its way by May 31? Calgary-based CBC business reporter Kyle Bakx comments, “If the company seeks damages, it would likely use NAFTA, since Chapter 11 of the agreement allows foreign companies to file compensation claims in countries where they have investments and believe a government action is unfair and discriminatory. …[Former University of Calgary energy law professor James Coleman says] “They would say Canada hasn’t done enough to ensure that their investment wouldn’t be effectively expropriated or stolen.”


The Council of Canadians has been opposing the Kinder Morgan pipeline since August 2011 and joins with allies in saying this pipeline will not be built.