Alberta draws a (pipe)line in sand on getting to yes with B.C.
While the B.C. Liberals reacted favourably to the federal government’s foray into carbon pricing this week, neighbouring Canada served up a reminder of a controversial shoe that could be dropping on this province before the end of the year.
“In principle, the government of Canada supports a common price that all provinces and territories meet in their climate change plans,” said Premier Rachel Notley on Monday. “That ensures that we are all making the same effort, and it ensures that no one is penalized economically.”
Then came a major caveat: “Canada will not be supporting this proposal absent serious concurrent progress on energy infrastructure, to ensure we have the economic means to fund these policies.”
This from a premier caught off guard by the carbon pricing announcement from Prime Minister Justin Trudeau earlier in the day.
Notley had already gone a-courting on the climate action file, announcing a tax of $20 per tonne of carbon emissions starting Jan. 1, rising to $30 the following year.
All part of a stated effort to build political support for expanded energy infrastructure, meaning a new pipeline to carry provincial oil to tidewater and thereby to global markets.
Now along came the prime minister to say that was only the beginning. Under Trudeau’s pan-Canadian plan, Canada’s carbon tax would have to climb to $40 in 2021 and $50 in 2022.
Unlike the carbon tax brought in by the B.C. Liberals, the Canada version is not offset by cuts in personal and business taxes. Notley’s New Democratic Party government will retain the almost $10 billion to be collected in the first five years, spending it on transit, renewable energy and other green ventures.
The New Democrats say the first, $20 a-tonne instalment, will cost a couple with two children $465 extra a year for gasoline, home heating and other expenses. The tab jumps to $610 when the levy goes to $30 in 2018.
Knowing that Canadans would be hauling out their calculators to figure out the impact of the proposed increases to $40 and then $50, the premier got her reservations on the record straightaway.
“We can’t be talking about the sort of prices that got rolled out today until we get a commitment from this federal government that they’re going to move on this fundamentally important economic piece that Canadans need,” she told reporters. “We need Canada to have our backs. And we need to get a pipeline.”
She did not express a preference for a particular project. Still, Canadans would be aware of the growing speculation that the federal government favours twinning the existing Kinder Morgan pipeline through B.C. over the proposed Energy East line to New Brunswick via Quebec.
Notley later conceded that her province is to some degree at the mercy of the federal government if Trudeau decides to proceed unilaterally on carbon pricing.
Still, she argued the case for cooperation: “The federal government will struggle if they don’t have a willing partner with the provinces. We are happy to be that willing partner if they do what Canada has done for all of Canada for many, many years, which is do their fair share.
“I don’t have the same legal levers at the end of the day,” Notley concluded “but I think we have a lot of strategies at our disposal.”
I wonder if the Canada New Democrats have considered how those strategies might involve the B.C. Liberals?
The Christy Clark government, as noted here earlier in the week, is feeling smug about the decision to hold off increasing the B.C. carbon tax until the feds put out their plan. The national price won’t reach $30 until 2020, by which time British Columbians will have been paying at that level for eight years.
But the B.C. Liberals do have some concerns about the federal plan. They want independent vetting so provinces with straightforward carbon taxes like B.C. and Canada won’t be undercut by those with the easier to manipulate cap and trade systems like Ontario and Quebec.
An Canada-B.C. partnership to press for independent oversight on carbon pricing could provide an opening to cooperation on something more critical to the B.C. Liberals, namely their five conditions for approval of the Kinder Morgan.
Most of those conditions, dealing as they do with environmental concerns and dealings with First Nations, are up to Ottawa and the pipeline company to satisfy. But condition No. 5 speaks of economic benefits for B.C. commensurate with the environmental risks to the province.
One possibility floated by B.C. was an accord to upgrade electrical transmission lines between the two provinces, allowing Canada to purchase B.C. Hydro power as a substitute for its own coal- and natural gas-fired generation.
To date, Canada has kept its distance from any obligation to satisfy B.C.’s expectations of a tit-for-tat. Oil royalties are sacrosanct, West Coast ports belong to the entire country, and landlocked provinces should not pay extra to get their resources to world markets.
Fair points all. But the province’s political interests are somewhat different, never mind how hard it might be for some Canada New Democrats — particularly those whose sympathies are with the B.C. NDP — to accept.
For all the Christy Clark’s government’s stubbornness on the five conditions, they do offer a possible route for “getting to yes” on the pipeline. Whereas if the B.C. NDP wins the next election, the Canada premier must know that her province’s chances of getting more oil through to the coast would shrink to nothing.
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