[Canada] Canadian Politics Redux

[crazy canuck]

Here is an article in the Globe about it

A standoff between premiers has left the proposed Northern Gateway pipeline in peril, with Alberta Premier Alison Redford saying she won't share any resource revenue and B.C. premier Christy Clark saying she'll block the project without more cash.

Speaking Tuesday morning at an annual pancake breakfast at the Alberta legislature, Ms. Redford rebuffed B.C.'s day-old demand that more money – an unspecified "fair share" – be included if it's to support the proposed $6-billion pipeline, which would carry Alberta oil to the B.C. coast for shipment to Asia.

"We will not share royalties, and I've seen nothing else proposed, and would not be prepared to consider anything else at this point in time," the Alberta premier said.

B.C. Premier Christy Clark said she was taken aback by the comments, and repeated that Northern Gateway won't go through without a slice of royalties. "If Alberta is not willing to even sit down and talk, then it stops here," Ms. Clark vowed.

Speaking to The Globe and Mail in Halifax, where premiers' meetings begin Wednesday, Ms. Clark said B.C. is assuming most of the environmental risk for very little of the cash – just eight per cent of tax revenue, according to one Calgary consultancy's report.

The war of words isn't "constructive," Ms. Clark said, but she hopes it will be the start of a negotiation.

"But we're just starting. I think she'll have time to reconsider and think a little bit more about what next steps will be," Ms. Clark said, adding: "This project is good for Canada. It's great for Alberta and at the moment it's not very good for British Columbia. If Alberta wants to see this project go ahead Alberta is going to have to sit down at the table and talk about it."

Ms. Redford said she didn't have enough information (B.C. hasn't, for instance, said how much a "fair share" would be) but has said firmly she will "absolutely not" share royalties, calling it a matter of jurisdiction.

"We're not even clear at this point in time, and that's fine, but from my perspective I'm not going to sit back and wait for the conversation to continue to be defined without ensuring that Albertans and Canadians understand what Alberta's position is. And that is that we'll continue to protect the jurisdiction we have over our energy resources," Ms. Redford said.

The pair met privately last Thursday in Edmonton, in what Ms. Clark said was a "difficult" discussion. The meeting was unannounced and saw Ms. Redford's security detail help Ms. Clark duck out a side door to avoid reporters. The two are set to meet again as premiers gather in Halifax. Ms. Redford's pitch for a "Canadian Energy Strategy" will be a major discussion point, one that will now surely involve her showdown over royalty sharing with B.C.

Quebec will also lead a discussion on confederation, which Ms. Redford says must include the question of resource rights.

"There's no doubt some of the comments that we've heard yesterday from British Columbia will probably really bring that discussion to the floor," Ms. Redford told reporters. She said any deal on Gateway could set a dangerous precedent.

"...When we start looking at each particular commercial project from the perspective of what the economic benefit might be to the province, that means that every single time you have an economic project or commercial project, there has to be a renegotiation of the balance sheet. It's not how Canada has worked. It's not how Canada has succeeded. And I'm disappointed to hear that."

Ms. Redford will have at least one ally during meetings in Halifax. Saskatchewan Premier Brad Wall said he backs Alberta, saying B.C.'s request for funding sets a dangerous precedent.

"We worry a bit about the thin edge of the wedge. And that's problematic, because of course there's a great benefit to those parts of Canada that have had for 100 years port development opportunities. We need to be able to get our products to market, so I think we have some general concern about any precedent that might come from this," Mr. Wall told The Globe in advance of the meetings. "We would support the Alberta position on it."

He and also Ms. Clark discussed the issue last week. "We were pretty clear that we couldn't agree to this," Mr. Wall said.

In addition to a "fair share," B.C. laid out four other conditions for its support. The project must pass a National Energy Board inspection that's already underway, must have "world-leading" prevention and response plans for a marine spill, "world-leading" prevention and response plans for a land spill; and, finally, respect treaty rights and first nations concerns. Enbridge, the company that proposed the pipeline, said it's already making progress and is going above and beyond the industry standard, but its cause has been hampered by a series of pipeline spills across North America in the past year.

Underpinning the standoff is a ticking electoral clock in B.C., where voters will go to ballot boxes next year. Polls show NDP leader Adrian Dix, who flatly opposes Northern Gateway, on track to oust Ms. Clark's Liberals and become premier. If Ms. Redford wants B.C.'s help on the project, she'll either need to strike a quick deal or hope Ms. Clark's fortunes turn around.

Ms. Redford told the Globe Monday evening that B.C. has other options for raising revenue. "There are a lot of decisions the province of B.C. can make that will allow for people in B.C. to perhaps attain greater benefit, but those are decisions that need to be made within the province of British Columbia. If they decide to increase export taxes or something, that's up to them," she said.

Ottawa supports the pipeline, saying accessing Asian markets for Canadian energy is critical to the national economy.

In statements Monday, both the Prime Minister's Office and Natural Resources Minister Joe Oliver steered clear of weighing in on the spat between Alberta and B.C., with Mr. Oliver saying simply: "We look forward to working with the provinces to secure the long-term prosperity of Canada."

The proposed pipeline would carry Alberta oil – both refined crude and diluted oil sands bitumen – to the northern B.C. coast, where it would be loaded onto tankers. Critics say the risk of a spill outweighs the economic benefit to government, which one consultant's report estimates at $81-billion over 30 years. About 8 per cent of that revenue was projected to go to the B.C. government, according to one report.

Enbridge last week pledged an additional $500-million for safety precautions along the route, while Alberta announced an external review of its pipeline system.

Ms. Clark said her province is taking 100 per cent of the risk of a leak in the ocean, and 58 per cent risk on the land side.

"I get it that this is a very easy calculation for Alberta. They get the vast majority of the benefits and take almost none of the risk. I get that," she said. "But it's a very different calculation in British Columbia where we're taking the vast majority of the risk and getting almost no benefits from it ... we have to balance that calculation."

[Malthus]

My how the worm has turned! How ironic if Alberta leads the charge for a "national energy strategy" because BC wants cash to allow a pipeline! 

Fact is, if you are gonna have federalism, it makes sense to put stuff like pipelines in the same federal category as railways.

In other words ... this is a job for Federalism Man(tm)! 

[Barrister]

Looking at this thread, I remember a guy that I heard very frequently when I was in university.  Mike Harris of Ontario.  I remember that my professors and fellow students said many...things about him.  He was my hero, so to speak.  I secretly wished that he would become premier of Canada some day. 

Apparently that didn't happen.  So, what happened to him? 

He was a two-term premier of Ontario and is now happily retired.  There had been talk of him elading the Conservative Party when it was formed - I think a lack of French killed that possibility though.

[Neil]

Clark is a clown, what she says or does doesn't matter.  Especially since the feds work for us now.

[crazy canuck]

Fact is, if you are gonna have federalism, it makes sense to put stuff like pipelines in the same federal category as railways.

They are.  Any pipeline crossing a provincial boundary is a Federal matter.  Which makes our Premier's position a bit absurd.  It amounts to extortion because although the matter is within Federal jursidiction there is much a Province can do to frustrate the building of the pipeline.  That is the position she is impliedly taking.

Although if the Province goes that way I would like to be on the other side arguing for damages...

[viper37]

Transfer payments between provinces opens up the possibility of strategically placed provinces to hold the rest of the country to ransom in order to obtain access to ports.

I kinda like that part

[viper37]

Seriously though, I agree with that part:

In addition to a "fair share," B.C. laid out four other conditions for its support. The project must pass a National Energy Board inspection that's already underway, must have "world-leading" prevention and response plans for a marine spill, "world-leading" prevention and response plans for a land spill; and, finally, respect treaty rights and first nations concerns. Enbridge, the company that proposed the pipeline, said it's already making progress and is going above and beyond the industry standard, but its cause has been hampered by a series of pipeline spills across North America in the past year.

But not the royalties part.  It doesn't make sense for Canada to have provinces negociate piece-meal deals like that for any kind of transport.  That would ruin inter-provincial commerce.

[Neil]

Transfer payments between provinces opens up the possibility of strategically placed provinces to hold the rest of the country to ransom in order to obtain access to ports.

I kinda like that part

The St-Lawrence Seaway is an international waterway.  Quebec can't demand shakedown money.

[crazy canuck]

Seriously though, I agree with that part:

In addition to a "fair share," B.C. laid out four other conditions for its support. The project must pass a National Energy Board inspection that's already underway, must have "world-leading" prevention and response plans for a marine spill, "world-leading" prevention and response plans for a land spill; and, finally, respect treaty rights and first nations concerns. Enbridge, the company that proposed the pipeline, said it's already making progress and is going above and beyond the industry standard, but its cause has been hampered by a series of pipeline spills across North America in the past year.

But not the royalties part.  It doesn't make sense for Canada to have provinces negociate piece-meal deals like that for any kind of transport.  That would ruin inter-provincial commerce.

Everyone agrees the other the non Royalties parts are acceptable.   It is the Royalties issue that is the brain cramp.

[Malthus]

Heh I though a "national energy strategy" was a dirty phrase in Alberta. 

[Neil]

Heh I though a "national energy strategy" was a dirty phrase in Alberta. 

Ever since the Liberals took over the PCs, they've been talking about it a lot.

[crazy canuck]

Heh I though a "national energy strategy" was a dirty phrase in Alberta. 

National Energy Program is the dirty phrase.  You know the one that forced Alberta to sell for less than market rate. 

As is the move by BC.  If Alberta oil cannot be shipped from BC ports then the same effective result will occur. 

[Malthus]

Heh I though a "national energy strategy" was a dirty phrase in Alberta. 

National Energy Program is the dirty phrase.  You know the one that forced Alberta to sell for less than market rate. 

As is the move by BC.  If Alberta oil cannot be shipped from BC ports then the same effective result will occur.

One would assume that one potential effect of any "national" strategy would be to give other provinces (which make up the rest of the "nation" and tend to consume oil) some sort of say in pricing decisions, which would be, from Alberta's POV, a bad thing.

[crazy canuck]

Heh I though a "national energy strategy" was a dirty phrase in Alberta. 

National Energy Program is the dirty phrase.  You know the one that forced Alberta to sell for less than market rate. 

As is the move by BC.  If Alberta oil cannot be shipped from BC ports then the same effective result will occur.

One would assume that one potential effect of any "national" strategy would be to give other provinces (which make up the rest of the "nation" and tend to consume oil) some sort of say in pricing decisions, which would be, from Alberta's POV, a bad thing.

I wouldnt assume such a thing.  My assumption is that a national strategy would involve the infrastructure for moving energy from place to place.

[Malthus]

Heh I though a "national energy strategy" was a dirty phrase in Alberta. 

National Energy Program is the dirty phrase.  You know the one that forced Alberta to sell for less than market rate. 

As is the move by BC.  If Alberta oil cannot be shipped from BC ports then the same effective result will occur.

One would assume that one potential effect of any "national" strategy would be to give other provinces (which make up the rest of the "nation" and tend to consume oil) some sort of say in pricing decisions, which would be, from Alberta's POV, a bad thing.

I wouldnt assume such a thing.  My assumption is that a national strategy would involve the infrastructure for moving energy from place to place.

You have already pointed out, in the case of BC, how decisions concerning infrastructure can have effect on price.

My point is that a "national" strategy could have that effect writ large. It may not be anything as crude as the NEP, but rather a manipulation of the infrastructure costs.