Earlier this month, the provincial government of British Columbia announced that it would halt the flow of diluted bitumen through the Trans Mountain pipeline pending the outcome of what amounts to an environmental review. This, in spite of the fact that the project was subject to a 29-month review from the National Energy Board, which concluded that it was in the public interest and recommended federal approval. The British Columbia Environmental Assessment Office has already issued an environmental assessment certificate for the project, and the approval of pipelines and the interprovincial transportation of such resources as oil and bitumen is within federal jurisdiction, not provincial.
This is a serious issue that has ramifications for the economy of Alberta and for Canada. The pipeline expansion itself is worth an estimated $7.4 billion. Over the construction period and the next 20 years it will add combined revenue of $46 billion to the Canadian economy. It means 15,000 construction jobs and an estimated 37,000 direct and indirect jobs per year. Overall, the project should generate more than 800,000 person-years of employment.
This is all being put at risk by a reckless and unnecessary decision by the BC government. It amounts to an end-around the official processes that were put in place to study the environmental impact. Processes that in one instance took nearly two and half years to complete. Processes that worked. Processes that resulted in approval of the pipeline expansion at the federal and provincial levels. This will do nobody any good and will, in fact, do a lot of people a lot of harm, as well as the entire Canadian economy, already in fragile shape due to a ballooning deficit and tax changes to the south that make the U.S. a more attractive place to do business and invest.
Not least affected will be the people of British Columbia. Let’s just look at one statistic. A Conference Board of Canada report reveals that 348 additional Aframax-size tankers will visit Port Metro Vancouver each year as a result of the Trans Mountain Expansion Project. The Conference Board further estimates that each of these tankers will spend on average $366,000 in the Vancouver Metro area. This equates to $127 million per year or $2.5 billion over the first 20 years of operation. This is not chump change. The Conference Board further estimates that the combined impact of the expansion would generate 678,000 person-years of employment and $18.5 billion in fiscal benefits over the first 20 years of the Trans Mountain pipeline’s operations.
The Trans Mountain Expansion Project was proposed in response to requests from oil companies to help them reach new markets by expanding the capacity of North America’s only pipeline with access to the West Coast. These shippers have made significant 15 and 20-year commitments that add up to roughly 80% of the capacity in the expanded Trans Mountain pipeline. Kinder Morgan has jumped through all the regulatory hurdles that were placed in front of it.
Is this how we are going to do business in this country? The prime minister reacted to the news coming out of BC by saying, “Look we’re in a federation.” And that he was not inclined to interfere in “disagreements between provinces.”
More recently, his natural resources minister, Jim Carr, said in an interview on Global News that if BC wants to launch further consultations it can, though it needs to be done in a “timely fashion.” What neither statement inspired was confidence that the federal government was going to do anything to resolve the situation. Which is hardly surprising since it is largely responsible for it.
Why at this late stage would BC be emboldened to move to, effectively, kill the expansion of the Trans Mountain pipeline and put the oilsands into limbo? Because the federal government has been inconsistent in its environmental policies and has sown confusion across the country. In confusion there is chaos. The federal government caved to the west coast environmentalists by banning tanker traffic on the northwest coast. No tankers there means no pipeline there either. Northern Gateway was done. So where can the pipelines go? Through to the heavily populated south, that’s where, providing fodder to the Greens in BC who have no interest in pipelines and want to kill the oilsands.
Meanwhile on the east coast, which would be energy-starved without tankers, there is no such ban. Yet its coastline stands exposed to the same environmental hazards as the northwest coast of BC. There was a solution, of course: the Energy East pipeline. The Energy East pipeline would have decreased our dependence on oil from the Middle East, from countries that lag behind the rest of the world on human rights and women’s rights.
But people like the former mayor of Montreal and former Liberal MP, Denis Coderre, lobbied selfishly and effectively against Energy East and then danced on its grave when the pipeline was cancelled. As progress on Energy East slowly ground to a halt the prime minister stood by and did nothing.
That inaction, that attitude, emboldened the opponents of Trans Mountain. It provided the BC government with the impetus and encouragement to say “we can kill it because the federal government will stand by and do nothing.” And stand by it has.
The federal government would be happy to see this process run on and on. How do I know this? In 2012 in an interview, the man who is now the prime minister’s principal secretary, Gerald Butts, was asked “Why don’t we propose a different route for the Northern Gateway Pipeline?” He replied, and I quote: “Truth be told, we don’t think there ought to be a carbon-based energy industry by the middle of this century. That’s our policy in Canada and it’s our policy all over the world.” He went on to say “the real alternative to the Northern Gateway is not an alternative route. It is an alternative economy.”
In my opinion they are going about achieving their objective by using a strategy of a project delayed is a project denied. This is a threat to our country, as Premier Rachel Notley so ably identified. The energy industry in Canada is missing out on higher energy prices and investors and customers look askance at our policies and our inaction. The government needs to make it very clear that it has the jurisdiction in this area, that getting it done in a “timely fashion” means getting it done before the deadline for completing the expanded pipeline, so it becomes operational on time and on schedule.
Note to readers: The Honourable David Tkachuk retired from the Senate of Canada in February 2020. Learn more about his work in Parliament.
This article appeared in the February 8, 2018 edition of The National Post.
The Senate held an emergency debate last week on the Trans Mountain pipeline, recognizing the issue as a matter of urgent public interest. Find out more.