Alberta unveils bill that could wreak havoc on B.C. gas prices in trade war

Alberta's minister of energy will have sweeping discretionary powers to limit exports of crude, natural gas and gasoline to B.C. under much-anticipated legislation introduced Monday.

Bill 12, titled Preserving Canada's Economic Prosperity Act, gives the Alberta government the ability to retaliate against the B.C. government for any delays to the Trans Mountain pipeline expansion, by driving up gas prices or slapping restrictions on shipments of other energy products.

"We are very committed to putting pressure on B.C. to come around and focus on what this pipeline actually means," Alberta Premier Rachel Notley said.

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The majority of gasoline and aviation fuel used in B.C. is shipped from Alberta through the existing Trans Mountain pipeline.

Limiting exports could create shortages in B.C., forcing it to look elsewhere for gasoline. Alberta could also divert crude oil shipments to rail and truck, in order to free up pipeline space for bitumen.

All these measures could amount to driving up prices at the pump, which could create political problems for B.C. Premier John Horgan.

Kinder Morgan has set May 31 as its deadline for deciding whether it will proceed with the Trans Mountain project. ​

If investor certainty isn't there by then, Notley said, then the Alberta government may take action. 

"Then that might be the point at which we're going to have to be a lot more strategic around what products get shipped to what markets by what means," she said. 

B.C. Attorney General David Eby said he is prepared to take Alberta to court over the legislation if it causes gas prices in his province to jump dramatically.

$10M daily fine

The bill will give Alberta's Energy Minister Marg McCuaig-Boyd power to issue licences for the export of crude oil, natural gas and refined products like gasoline and aviation fuel.

The licences can set limits on where product goes and on how much can be exported over a defined period of time. The minister can determine how product is exported, through pipeline, rail or truck.

Corporations that violate terms of a licence face a fine of $10 million a day.

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The government claims it has received a legal opinion indicating the legislation would not violate the Constitution, NAFTA or any internal trade agreements.

If passed, the bill would come into effect upon proclamation.

Jason Kenney, leader of the Official Opposition United Conservative Party, has called on the government to turn off the taps to B.C., but he is reserving opinion on the bill until his caucus can read it more closely. 

"We certainly accept the goal but we have to do our due diligence as the opposition to make sure the bill doesn't go farther than it needs to," he said.

Kenney added the UCP may propose an amendment to put a sunset clause on the bill, so the minister doesn't retain these powers longer than necessary.

The bill was introduced one day after Notley and Horgan met with Prime Minister Justin Trudeau in Ottawa to discuss the dispute between the two provinces over proceeding with the pipeline.

Alberta's proposed law came up in the discussions, and according to Notley, her B.C. counterpart said he hoped that it would not go ahead.

Notley said delays to the proposed pipeline project will cost Canada an estimated $40 million a day in lost revenue.

The Alberta and federal governments are in talks with Kinder Morgan on ways to give the company financial assurances the Trans Mountain pipeline project will go ahead.

The Texas-based company cited resistance from the B.C. government when it announced recently it was halting all non-essential spending on the project.