Pipelines and politics

Following this weekend’s meeting between Prime Minister Justin Trudeau, Premier Rachel Notley of Alberta and Premier John Horgan of British Columbia, questions remain about the effects the Trans-Mountain Pipeline saga will have on Canada, both at home and internationally.

Speaking to the press after the meeting, the Prime Minister stated unequivocally that the pipeline would be built, and that the federal government continues to view this pipeline in the national interest, and as such will be introducing legislation shortly that will contain measures that ensure the pipeline is built. This legislation, while yet to be tabled, is expected to reaffirm the federal government’s jurisdiction and include tools to overrule any attempts by British Columbia to block the pipeline.

While many have been waiting for this kind of tough talk from the Prime Minister, some are hearing something else entirely. International investors have been watching the issue closely and will take note of the government’s reaction while considering their own foreign investment in Canada. The long approval processes, across multiple jurisdictions, with the near-guarantee of a court battle, is weighing on investors’ minds as they consider funding projects in Canada. Will they see this as reassuring, or concerning? We will hear the answer from Kinder Morgan in the coming weeks, as their self-imposed deadline of May 31st nears.

The other issue on the minds of these three leaders is firmly political. The next federal election is 18 months away, and the electoral calculus makes the decision risky. The government could potentially alienate voters in Alberta, or Vancouver, where the pipeline terminates. They could also face a backlash in Quebec, where opposition to Trans-Mountain is highest. The key question is whether the government can repair any damage prior to October 2019.

Provincially, the next Alberta election occurs in just over a year, with Premier Notley trailing in the polls to the new United Conservative Party. The Premier is seeking to use her steadfast support of the pipeline to help restore her fortunes and gain support. In British Columbia, Premier Horgan’s government rests on the support of three Green Party members, who are vehemently anti-pipeline, and whose loss of support could potentially lead to a snap election.

While fraught with risk, the Trans-Mountain pipeline is a battle political leaders are willing to fight, and possibly lose. With so much risk – economically, environmentally, electorally – the issue is far from over.