Ottawa 'working hard' to settle Alberta-B.C. Trans Mountain spat, Bill Morneau assures Calgary audience

Federal Finance Minster Bill Morneau says Albertans can be assured that the dispute with British Columbia over the Trans Mountain pipeline expansion is a top concern in Ottawa, but that it's more likely to get resolved behind the scenes than through the media.

In January, the B.C. government sparked a skirmish with Alberta when it proposed to restrict any increase in diluted bitumen shipments through the pipeline until it conducts more spill response studies.

Alberta Premier Rachel Notley denounced the B.C. proposal as unconstitutional and pre-emptively retaliated with a block on B.C. wine imports.

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Several federal ministers and the prime minister reiterated Ottawa's position that Kinder Morgan has a green light and its project is considered to be in the national interest.

Morneau repeated that message to his Calgary business audience on Wednesday — and he hinted that there's a lot more happening on the issue than meets the eye.

'Not necessarily on the front page'

 "What I would like people in the room to know is that everything that is going on is not necessarily on the front page of the newspaper," he said.

"And some of the things that are going on are not actually helped in terms of their effectiveness by being on the front page of the paper."

Asked by a reporter after his speech to clarify what discussions are underway, Morneau replied, "If I told you what we're doing behind the scenes, it wouldn't be behind the scenes, would it?"

"The point is that we are working hard," he said.

Morneau was in Calgary to talk about the 2018-19 federal budget, which he released last week.

He said that while the spending plan doesn't contain new tax measures meant to match recent corporate tax cuts south of the border — cuts some analysts say will put more of a dent in the already reduced capital investment in Canada's oil and gas sector — Ottawa is still studying the specifics of the new U.S. tax regime.

"We'll continue to consider the broader competitive market," he said.

But Morneau says he believes Canada's business tax rate remains competitive with the U.S. when provincial and state rates are factored in.

"The headline is that the United States changed its corporate tax rate from 35 per cent to 21 per cent. But it misses things, because, of course, in Canada we have both provincial and federal taxes, in the United States they have state and federal taxes," he said.

So, in fact, the net change in the United States is to about 25.8 per cent."

"And the average large corporation tax rate in Canada is 26.8 per cent."

Morneau argued that, for Alberta's oil and gas sector, the more important factors in attracting capital have been the price of oil and the differential in price between Alberta crude and WTI oil. That reality reinforces the importance of getting projects like Trans Mountain built, he said, so that Alberta's energy resources can get to world markets.

"We clearly know that for the sector to get the kind of investment it needs, we need to find ways to ensure we have access to market," he said.

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