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Alberta premier threatens economic retaliation against B.C. over bitumen restrictions

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'We will, in fact, be taking them to court as quickly as possible if they don't back down,' Rachel Notley says

Alberta Premier Rachel Notley makes a statement to media during an emergency cabinet meeting Wednesday. (CBC)

Alberta Premier Rachel Notley has threatened to retaliate economically against what she called an "unconstitutional" move by the B.C. government to delay construction of the Trans Mountain pipeline expansion.

Notley has already vowed to take legal action against the B.C. government, which on Tuesday proposed new restrictions on shipments of bitumen that would flow through the expanded pipeline from Alberta to the West Coast.

On Wednesday, Notley called an emergency cabinet meeting to discuss Alberta's options to strike back in what has become a super-heated battle with the NDP government in B.C.

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"The B.C. government took this action with no provocation and almost no warning," Notley said. "The government of Alberta will not, we cannot, let this unconstitutional attack on jobs and working people stand."

The meeting wrapped up after an hour without a decision.

"The Cabinet had a vibrant and productive discussion and have identified some options they'd like to consider further," Cheryl Oates, Notley's communications director, said in an email. "The (government of Alberta) is going to keep working on a path forward in regard to both legal and economic options."

'A range of legal and economic responses'

George Heyman, B.C.'s minister of environment and climate change strategy, said his government is just doing its job and will agree to disagree with Alberta.

He denied his government was sparking a constitutional crisis with the proposed regulations.

"We wouldn't be proceeding if we didn't believe we had the right and the responsibility under the Environmental Management Act to protect B.C.'s coast and our environment against real threats," he said.

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Though Notley said she has "every expectation" that the B.C. government will act within the law, her government has already made preparations for possible legal and economic responses should that not be the case.

"Specifically, last summer, I asked officials to begin work on polishing the tools in our toolbox," Notley said. "And so today, I would like us all to discuss how best to use those tools to stand up for Albertans and for their jobs.

"I've called you all together today at this emergency meeting," she told her cabinet, "to discuss and evaluate the range of economic and legal options that are available to us, including, for example, interprovincial trade in electricity."

B.C. has been talking to Alberta about selling electricity from the Site C hydroelectricity project on the Peace River.

Show more CBC's Terry Reith on Alberta's threat against B.C. over bitumen restrictions 4:01

On Tuesday, B.C. proposed new oil-spill regulations that would restrict shipments of diluted bitumen. If passed, they would essentially block development of any new oilsands pipeline networks to the West Coast.

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The province said it wants to place restrictions on the increased transportation of diluted bitumen — by rail or pipeline — until further studies on the oil can be done.

The federal government has already approved the pipeline project, Notley said, and B.C. has no right to ignore federal law.

Jason Kenney, leader of the Official Opposition United Conservative Party, said he has been advocating for action since the B.C. NDP took office last summer.

"She was mocking the proposed strategy that she is now following," Kenney said of Notley. "I'm glad the NDP has had a change of heart, a change of mind."

Kenney said Alberta could boycott B.C. hydroelectricity, put tolls on B.C. natural gas flowing through Alberta to U.S. markets, or refuse to issue permits for the oil carried by the current Kinder Morgan pipeline.

Kenney wasn't impressed that cabinet didn't come to a decision Wednesday.

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"If you're going to start using the language of retaliation, you better follow through," he said.

Notley received support from an unlikely source, when Saskatchewan, which until last week was embroiled in a trade war with Alberta over licence plates, said it backed Alberta's position.

"We will support the Alberta government in any actions against this political decision," Saskatchewan premier-designate Scott Moe said on Twitter Wednesday morning.

Moe was elected leader of Saskatchewan Party on Saturday, replacing Brad Wall, who is retiring.

'This is not how Canada operates'

"The government of B.C. has acted rashly in a way that threatens jobs and investment, not only in Alberta but in B.C. as well," the premier said. "Just because the B.C. government, in coalition with the Green Party, doesn't like the decision, gives them absolutely no right to ignore the law. Or, put another way, to change the rules at halftime based on a whim.

"This is not how Canada operates."

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Earlier in the day, in an interview with CBC Radio's Edmonton AM, Notley said an attempt to block the pipeline, or what's shipped inside of it, is a direct attack on Alberta's economy. She said the province of Alberta will respond in a proportional way.

"We will, in fact, be taking them to court as quickly as possible if they don't back down. This is just not something they can do. It's creating huge economic insecurity. It puts a chill on investment and it jeopardizes jobs."

B.C.'s move creates another regulatory roadblock for Kinder Morgan's Trans Mountain pipeline expansion, which aims to nearly triple capacity of the current pipeline system to 890,000 barrels a day. The $7.4-billion project was approved by the federal government in 2016.

'This tactic is so offside'

Notley claims the bitumen restrictions are unconstitutional. A decision on the pipeline has already been made and the courts will rule in Alberta's favour, she said.

'This tactic is so offside that it won't be allowed to stand for any length of time' - Rachel Notley

"This tactic is so offside that it won't be allowed to stand for any length of time," Notley said Wednesday.

"This is well beyond any authority that the minister has, and it has implications for economic growth … across the country.

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"This kind of action really does warrant some pretty significant criticism, and I don't think I will be the only one to deliver it."

Notley's talk of legal action comes after Jason Kenney, leader of Alberta's Official Opposition United Conservative Party, described the regulatory tiff as an embarrassment for the premier — and criticized her for failing to threaten it immediately.

Notley suggested the B.C. environment minister is the only one who should be red in the face. She described his announcement as a "ridiculous tactic."

"The people of B.C. have to wonder about an environment minister who is attacking investment and attacking economic growth at the same time their premier is in Asia trying to drum up investment," said Notley.

"This doesn't look like a government that is working together."