By Brent Rathgeber
Thanksgiving was a time for family, food, post-season baseball and politics. More than one election has been won (or lost) over holiday table chatter. This year, the table talk in my neighbourhood was all about Energy East
The announcement of the pipeline project’s collapse almost seemed to have been timed for maximum impact in Alberta, with municipal elections happening the next Monday, and the new United Conservative Party (UCP) of Alberta choosing its inaugural leader by month’s end. The tone of the conservation here is easy enough to sum up: anger, bitterness. The “what” of what happened – that’s a more complicated.
Calling it a bad day for the West and calling into question his province’s role in the federation, Saskatchewan Premier Brad Wall pointed the finger at Prime Minister Justin Trudeau, blaming him for regulatory hurdles which frustrated the project’s progress. Federal Resources Minister Jim Carr argued it was a business decision by the proponent, based on low oil prices.
They’re both right. Low oil prices undermined TransCanada’s business case, while President Donald Trump’s revival of the Keystone XL project raised legitimate questions about whether the oilpatch still needs a new east-west pipeline.
However, the goal posts did get moved part way through the game when the National Energy Board (NEB) opted to evaluate both the “upstream” and “downstream” carbon emissions of the project – taking into account not only the emissions footprint of the project itself, but the increase in emissions from harvesting and consuming more oil. And that came after the NEB had to start the process over because the members of the first NEB panel were conflicted-out having been lobbied by TransCanada.
But because this is an East-West conflict over the most political of commodities – oil – it quickly turned into a brawl over that most political of federal transfers – equalization. Wall bemoaned the fact that Saskatchewan and Alberta still send equalization payments to subsidize the governments of the East. He was especially irritated by Montreal Mayor Dennis Coderre’s vocal opposition to the project, pointing out the Quebec receives $11.0 billion in equalization per year.
Wall openly questioned whether “this country really values western Canada” and “the things we do to contribute to the national economy and to the quality of life.” Jason Kenney, the former Harper cabinet minister widely seen as being in the pole position to lead the UCP, suggested Alberta should stop making equalization payments to Quebec (Calgary.ctvnews.ca/transcanada-cancels-plans-for-energy-east-pipeline).
Alberta Premier Rachel Notley was more measured in her response, saying she “was deeply disappointed” and calling it “an unfortunately outcome.” Kenney’s main rival for the UCP leadership, Brian Jean, called the cancellation “an attack on Canada and Alberta.” Talk radio spent the week fielding furious calls and tweets from Albertans calling for the province to secede, or join the United States.
We’ve been here before, of course – and the anger is every bit as real now as it was then. Alberta’s economy is still staggering. Alberta’s long flirtation with separation goes all the way back to the 1930s and the Great Depression; it seems to be an inevitable political symptom of economic pressure.
In the 1980s, in the wake of the National Energy Program (NEP) and a severe recession, the Western Canada Concept Party was born and managed to elect an MLA. The party received 11.8 per cent of the vote in the following general election but elected no more members and lost the one it had.
A splinter group formed the Western Independence Party in 1987. There were other failed experiments – the original Alberta Party, the Heritage Party of Alberta, the Representative Part of Alberta, and the Confederation of Regions. By 1990, the splinters all merged to form the Alliance Party of Alberta – then disappeared again.
Secessionists are “splitters” by definition; inevitably, they cannot get along with each other and end up quarreling over whether Alberta should go it alone, or join some or all of the Western provinces, or become the 51st state. Although most secessionists tend to be “conservative” they also fight amongst themselves over questions of government involvement in the economy and libertarianism vs. traditional social values. Eventually, every Western secessionist movement breaks up and then dies.
The equalization soapbox is a good one for a Prairie politician to stand on right now … except it’s not really an argument you can pursue to its logical end. Provinces don’t pay equalization – people do. Equalization is a federally administered program. Ottawa sends money to provinces to support their capacity to deliver services. These payments come entirely from the federal treasury, which is fed in large part by tax-paying Canadians everywhere.
Yes, corporations and individuals in Alberta and Saskatchewan contribute disproportionately to the federal treasury – but there’s no way for a province to “withhold” equalization payments as punishment, short of encouraging citizens to refuse to pay federal taxes … which is illegal. Wall and Kenney know this, of course.
I supported Energy East. An east-west pipeline is vastly preferable to a north-south route, especially with a nationalist president in office. And Eastern Canada has to get its energy from somewhere; a pipeline is a far safer means of transporting oil than trucks or trains.
But given the current climate of market uncertainty and political gamesmanship, it’s not at all clear if Canada can even build a pipeline these days. That’s bad news for Rachel Notley, who – less than two years out from an election – still doesn’t have her new pipeline despite purchasing the “social licence” for it with a carbon tax, at great political cost.
The only winners in all of this are Mayor Coderre and Quebec; both opposed this project and will continue to import oil from Saudi Arabia.
And the Trudeau Liberals? They can now claim – with a straight face – that it was TransCanada, not them, that killed Energy East. They have 40 seats in Quebec; and just four in Alberta and Saskatchewan. Anyone can do the math.
Brent Rathgeber was the Conservative MP for the riding of Edmonton-St. Alberta from 2008 to 2013 when he resigned from the Conservative caucus to protest the Harper government’s lack of commitment to transparency and open government. He ran and lost in the 2015 federal election to a Conservative candidate. He is the author of Irresponsible Government: The Decline of Parliamentary Democracy in Canada. He is a graduate of the University of Saskatchewan’s law school and a member of the Alberta bar.
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