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Horgan takes the bait and sues Alberta over “turn off the taps” legislation

The government of British Columbia has sued the government of Alberta, claiming that Premier Kenney’s “turn off the taps” legislation is unconstitutional.

Micah Ryu Montreal QC

The government of British Columbia has sued the government of Alberta, claiming that Premier Kenney’s “turn off the taps” legislation is unconstitutional.

The statement of claim alleges that the legislation is unconstitutional for three reasons.

The first reason is that the legislation would encroach upon federal jurisdiction over “trade and commerce“.

The second reason is that the legislation does not fall under the two exceptions under which provinces can legislate what would otherwise fall under federal “trade and commerce” jurisdiction.

The first of the listed exceptions are in relation to the export of unrefined petroleum resources, and the second is an exception for laws that do not cause or authorize discriminatory prices or supply across provinces.

The third reason is that it violates the guarantee for free inter-provincial trade, a guarantee that has seemed like a bit of a joke in the past.

The news cycle was quick to divert the merits or implications of these arguments, deciding instead to point out that the legislation is probably just a bluff to get the Trans Mountain extension started, and that expanding the pipeline would likely not lower Vancouver gas prices.

The argument is that Vancouver prices would not be decreases without an increase in refining capacity.

Well, forget for a second that Vancouver drivers currently pay 34 cents per litre in provincial taxes alone. The argument that before-tax gas prices would not decrease without new refineries is still contentious, as some experts say that such capacity already exists, allowing gasoline to be transported to BC through part of the expanded pipeline.

The lawsuit is certainly an interesting development, but perhaps not for the reasons being widely discussed.

Forcing BC into a hypocritical argument

The lawsuit begins by pointing out that the province relies on Alberta for 55% of its gasoline and 71% of its diesel. Another 25% of its gasoline and diesel is refined within the province, the majority of which can be traced to Albertan crude oil.

The province will be tempted to bolster its argument by playing up the damage that the legislation would do to its province, thereby admitting just how necessary and in-demand fossil fuels still are in BC. This would fly in the face of their ethical arguments against the pipeline expansion.

The inter provincial trade argument will inevitably give conservatives at least a few good talking points. At the core of this issue is British Columbia’s refusal to allow their neighbour and their country to export Canada’s resources in accordance with our national interest.

Yet, they have made the transparently ironic move of complaining that Alberta is the one turning to erect an inter-provincial blockade.

Revealing the absurdity in the state of our federation

In the East, the oil comes from places like Algeria and Azerbaijan, but not Alberta. Part of the reason is Quebec’s opposition against the Energy East project. Quebec recently passed a motion 112-0, stating that the pipeline was not “socially acceptable“.

Yes, that’s the same Quebec that uses Albertan tax dollars to turn 11-figure deficits into surpluses. It’s the same Quebec inhabited by the same car-driving, air-breathing, carbon-emitting humans as in the rest of the country.

Yet, this recent development only further shows what an absurd federation we have, when provinces appear to lack all the rights that they should have, while others appear to have rights that they should not have.

It is simply not sustainable to have a federation where governments are racing to run out of each other’s resources.

B.C. is missing a huge opportunity to help the environment

Diversifying the Albertan economy became a big talking point under the previous Notley government. Some of those points were mirrored by then NDP leader Thomas Mulcair when he would square off against then PM Stephen Harper in question period.

The argument was that Canada should be focused more on adding value to our petroleum resources domestically, instead of exhibiting symptoms of the dutch disease by frantically exporting raw resources.

Natural resources can only be exported once, so why not try to do as much of the refinery work at home?

The argument, if framed correctly, could be a convincing one. Conservatives love to extol our high environmental and labour standards compared to our fellow oil-producing nations, and they are right to do so. If BC is really so concerned about the environment, but are unwilling to accept $3 per litre gas, perhaps they should do some job-creating and build some refineries.

It could be a ‘three birds one stone’ situation. It would boost development in rural/northern BC, create jobs (and not just in the oil sector), and the province would be able to enforce strict environmental and labour standards that they would not be able to enforce in Alberta (let alone in Washington state or in Saudi Arabia).

There are plenty of bargaining chips that BC can use against Alberta to take advantage of its neighbour’s resources while being able to influence the country’s resource development to ensure that it happens in a responsible way that does not leave the economy needlessly vulnerable to external shocks.

B.C. should stop burning all those bargaining chips and start using them instead. Unfortunately for them, it might require a quick and quiet resolution to this lawsuit, which seems very unlikely.


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