Alberta Premier Rachel Notley is escalating her attacks on Ottawa’s energy policies, dismissing an aid package unveiled this week as woefully inadequate and warning that a proposed overhaul of environmental approvals would be a serious blow to future pipelines.
After a year of increasing tension with Ottawa, the Premier is becoming more vocal. At the same time, unemployed oil workers have been staging weekly rallies across Alberta, and calls for a renegotiation of the province’s role within confederation have become more widespread and strident.
In her latest critique of Ottawa’s approach to the oil and gas sector, Ms. Notley is warning that federal legislation overhauling the assessment process for big natural-resources projects could spell the end for new private-sector pipelines in Canada.
Ms. Notley told The Globe and Mail in a year-end interview that the federal Impact Assessment Act, Bill C-69, is undermining investor confidence and that Ottawa has disregarded Alberta’s proposed fixes to the bill. She said future pipelines may need to depend on federal support to get built if Bill C-69 passes in its current form.
“If it’s pipelines being built by the private sector, it might well be [the end] because right now there is so much uncertainty with it. We need certainty, we need clarity and we need some fixes," she said.
Ms. Notley has spent much of the past year arguing that the federal government is failing to do enough to address the impact of low oil prices and ensure additional pipelines are built to bring Alberta crude to new markets. This past August, she cancelled planned increases to the province’s carbon tax to protest against the uncertainty facing the Trans Mountain pipeline to the B.C. coast.
She has repeatedly called for federal help to buy railcars to expand oil shipments, but Ottawa has only said it is studying the proposal. And earlier this week, Ms. Notley was quick to condemn a $1.65-billion aid package that consisted mostly of loans.
“If you compare it to the announcements for steel, for aluminum, for forestry, it looks a lot like it," she said.
“It’s a bit of a cut and paste. I frankly think for the size of the industry, its contribution to the rest of the country, the depth and breadth of the problem, it deserved more than cut and paste.”
Ms. Notley has cast herself as an energy-industry champion in recent months while overloaded pipelines have led to Alberta’s oil being sold at a deep discount compared with international benchmark prices. The discount has cost the Alberta economy $80-million daily, according to the Premier, and fuelled fears that the province’s budding economic recovery could turn to recession.
Bill C-69, as well as the federal government’s proposed tanker ban off the northern B.C. coast, have roiled the province.
The resource issue is expected to dominate the spring provincial election, when Ms. Notley will face a challenge from Jason Kenney’s United Conservative Party.
The federal government purchased the Trans Mountain pipeline for $4.5-billion at the end of the summer after Kinder Morgan’s decision to give up on a planned expansion of the pipeline because of mounting political opposition. The proposal to nearly triple the capacity of the Korean War-era pipeline to the Vancouver region is key to getting more of Alberta’s oil to consumers other than the United States.
The Premier said she believes there is a good chance that the expansion of Trans Mountain will be under construction in the second half of 2019.
The Impact Assessment Act would fix a flawed review process and ease investor uncertainty, according to federal Environment Minister Catherine McKenna’s office. Bill C-69, one of the last major pieces of legislation expected to be approved by Prime Minister Justin Trudeau’s government before next year’s federal election, overhauls the timelines and rules for project reviews.
The act replaces the National Energy Board and creates two new federal agencies, enacts new requirements for consultations on large projects and allows more groups to intervene over a longer period of time.
While the proposed legislation has been supported by the mining industry and conservation groups, the energy industry and political leaders in Alberta and Saskatchewan have sounded the alarm about the impacts of the far-ranging bill.
Ms. Notley now says that the proposed legislation is unacceptable without changes. “We’ve been engaging with the federal government for well over a year now, in great detail, about what needs to be changed. They were saying they were prepared to make those changes, they haven’t done it yet. They are now saying wait until regulations, it’ll happen,” Ms. Notley said. “We appreciate it’s hard work, oh well, just get to it.”
Sabrina Kim, an issues manager for Ms. McKenna, said the government would be open to any changes that could be proposed by the Senate, where the bill has passed second reading and has been referred to committee. She also said the Alberta premier’s concerns will also be taken into account when the government drafts regulations to enforce the legislation.
The Alberta government has raised concerns that, under the bill, pipeline approvals could take longer, steam-driven oil sands projects might require lengthy environmental assessments and there could be a greenhouse gas emissions test for new projects. The province has also said that the new rules could extend the federal jurisdiction into pipelines that don’t cross provincial boundaries.
Editor’s note: A previous version of this story incorrectly said the federal government would only consider changes to Bill C-69 through regulations. In fact, the government says it is also open to legislative changes that could be proposed by the Senate.
Justin Giovannetti